deman and supply dynamic for sequential release products --> Elbergse & Eliashberg, 2003 Flashcards
article in a nutshell
movie industry
demand and supply interrelated within and across markets
longer time-lag between releases = weaker relationship between domestic + foreign market performances
- buzz generated in home market wears out
two determinants affecting behaviour of movie exhibitors - screen allocations and revenues - within country dynamics
playability - legs, longevity, WoM
marketability - movie attributes
experience effect, initial market performance influence on subsequent market - across country dynamics
strengthens with longer time lags
- herd behavior, cascades, success breeds success
weaken with longer time lags
- buzz has short life span
–> supported
national movie performance
supply: screen share / availability
- making product available
interrelated
demand: box office revenues
- adopting product
international movie performance
performance of initial market
- domestic
time lag between initial & subsequent
- domestic and foreign
other influences on movie performance
movie attributes
advertising
distributor characteristics
3rd party evaluators
WoM
competitive environment
seasonality
Q: explain relationship between critics’ reviews and the number of opening screens
critical acclaim has a (+) effect on box office revenues
- opening weeks
exhibitors use reviews as a proxy for WoM effect
main driver of long-term demand for a movie
(+) reviews reduce to the need for exhibitors to allocate more screen
- after opening weeks
aniticipate movies longer life cycle
generate more revenues in subsequent weeks
critically acclaimed films can gain
of screens later
platform release
week 1 mediators/moderaters?
movie attributes
advertising
critical acclaim
competition
seasonality
week 2 mediators/moderators
WoM
competition
seasonality
week 3 mediators/moderators
WoM
competition
seasonality
demand = sales revenues - findings
expected revenue key determinant of # of screens
supply = availability - findings
of screens is a key determinant of revenues
time lag - findings
longer between releases - weaker relationship between market performance
domestic & foreign
short life-span of buzz
(-) influence on exhibitors and their screen allocations
movie attributes - findings
indirect influence on exhibitors and their screen allocations
advertising - findings
indirect influence on exhibitors and their screen allocation
predictos of opening weeks revenues and screens
- affect movie marketability
3rd party evaluations - findings
reviews (+) revenues - opening weeks - quality sign
reviews (-) # screens - after opening 0 anticipate long legs
WoM - findings
predictor of subsequent weeks of revenues and screens
- affects movie playability/legs
main predictos of revenues
screen space
controlled by exhibitors
distributors need to secure large audiences by marketing for both
audiences = pull
exhibitors/cinemas = push
pull strategy example
casting stars
(-) expensive, increased exposure for distributors
solution: focus on movie characteristics relative to other movies on release
push strategy example
advertising
important for foreign markets
- shows financial commitment to the movie
main hypothesis on delay in foreign markets
longer delay - less buzz and momentum or movie in domestic market
buzz = short life span
need optimal planning of release date
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