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The performance of global film franchises: installment effects and extension decisions

Author

Listed:
  • Darren Filson

    (Claremont McKenna College)

  • James H. Havlicek

    (NBCUniversal Media, LLC)

Abstract

An empirical exploration of global film franchises provides insights for managers of film franchises, investors in franchisable products, and scholars interested in motion picture performance. Performance tends to deteriorate as extensions are introduced: production budgets rise, advertising expenditures remain similar, and the number of opening-weekend theaters experiences a jump with the first sequel and then remains similar in subsequent installments. However, revenue, return-on-investment (ROI) and audience and critical reviews fall, and foreign performance becomes increasingly important. Offsetting deteriorating performance, risk falls: revenue and ROI become more predictable. An early change in the lead actor causes reduced performance, but changes in key product characteristics and inputs in later installments help prolong the franchise. ROI of the current installment is the most critical financial determinant of whether a further extension will occur, but high-budget films and those with higher domestic share of revenue are also more likely to yield further extensions.

Suggested Citation

  • Darren Filson & James H. Havlicek, 2018. "The performance of global film franchises: installment effects and extension decisions," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(3), pages 447-467, August.
    • Handle: RePEc:kap:jculte:v:42:y:2018:i:3:d:10.1007_s10824-018-9316-6
    DOI: 10.1007/s10824-018-9316-6
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    Cited by:

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    2. Jordi McKenzie, 2023. "The economics of movies (revisited): A survey of recent literature," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 480-525, April.
    3. Wu, Chunhua & Weinberg, Charles B. & Wang, Qiyuan & Ho, Jason Y.C., 2022. "Administrative trade barrier: An empirical analysis of exporting Hollywood movies to China," International Journal of Research in Marketing, Elsevier, vol. 39(4), pages 1253-1274.
    4. Shu Han & S. Abraham Ravid, 2020. "Star Turnover and the Value of Human Capital—Evidence from Broadway Shows," Management Science, INFORMS, vol. 66(2), pages 958-978, February.
    5. Thorsten Hennig-Thurau & S. Abraham Ravid & Olav Sorenson, 2021. "The Economics of Filmed Entertainment in the Digital Era," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(2), pages 157-170, June.
    6. Belvaux, Bertrand & Mencarelli, Rémi, 2021. "Prevision model and empirical test of box office results for sequels," Journal of Business Research, Elsevier, vol. 130(C), pages 38-48.

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    More about this item

    Keywords

    Film franchise; Sequel; Motion picture; Movie; Globalization; Brand extension;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts

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