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What makes a blockbuster? Economic analysis of film success in the United Kingdom

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  • Alan Collins

    (Department of Economics, University of Portsmouth, Milton, Southsea, Hants, UK)

  • Chris Hand

    (Department of Economics, University of Portsmouth, Milton, Southsea, Hants, UK)

  • Martin C. Snell

    (Department of Economics, University of Portsmouth, Milton, Southsea, Hants, UK)

Abstract

In this paper, we attempt to evaluate whether a film's commercial performance can be forecast. The statistical distribution of film revenues in the UK is examined and found to have unbounded variance. This undermines much of the existing work relating a film's performance to its identifiable attributes within an OLS model. We adopt De Vany and Walls' approach and transform the revenue data into a binary variable and estimate the probability that a film's revenue will exceed a given threshold value; in other words, the probability of a blockbuster. Furthermore, we provide a sensitivity analysis around these threshold values. Copyright © 2002 John Wiley & Sons, Ltd.

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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 23 (2002)
Issue (Month): 6 ()
Pages: 343-354

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Handle: RePEc:wly:mgtdec:v:23:y:2002:i:6:p:343-354

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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  1. Olivier V. Pictet & Michel M. Dacorogna & Ulrich A. Muller, 1996. "Heavy tails in high-frequency financial data," Working Papers 1996-12-11, Olsen and Associates.
  2. De Vany, Arthur & Walls, W David, 1996. "Bose-Einstein Dynamics and Adaptive Contracting in the Motion Picture Industry," Economic Journal, Royal Economic Society, vol. 106(439), pages 1493-1514, November.
  3. De Vany, Arthur S. & Walls, W. David, 2004. "Motion picture profit, the stable Paretian hypothesis, and the curse of the superstar," Journal of Economic Dynamics and Control, Elsevier, vol. 28(6), pages 1035-1057, March.
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Cited by:
  1. C F Elliott & R Simmons, 2007. "Determinants of UK box office success: the impact of quality signals," Working Papers 584026, Lancaster University Management School, Economics Department.
  2. Jordi McKenzie, 2010. "Do 'African American' films perform better or worse at the box office? An empirical analysis of motion picture revenues and profits," Applied Economics Letters, Taylor & Francis Journals, vol. 17(16), pages 1559-1564.
  3. Binken, J.L.G. & Stremersch, S., 2008. "The Effect of Superstar Software on Hardware Sales in System Markets," ERIM Report Series Research in Management ERS-2008-025-MKT, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
  4. Ana Suárez-Vázquez, 2011. "Critic power or star power? The influence of hallmarks of quality of motion pictures: an experimental approach," Journal of Cultural Economics, Springer, vol. 35(2), pages 119-135, May.
  5. Frederick Derrick & Nancy Williams & Charles Scott, 2014. "A two-stage proxy variable approach to estimating movie box office receipts," Journal of Cultural Economics, Springer, vol. 38(2), pages 173-189, May.
  6. Jordi McKenzie, 2009. "Revealed word-of-mouth demand and adaptive supply: survival of motion pictures at the Australian box office," Journal of Cultural Economics, Springer, vol. 33(4), pages 279-299, November.
  7. Alan Collins & Chris Hand, 2005. "Analyzing moviegoing demand: an individual-level cross-sectional approach," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 26(5), pages 319-330.
  8. Randy Nelson & Robert Glotfelty, 2012. "Movie stars and box office revenues: an empirical analysis," Journal of Cultural Economics, Springer, vol. 36(2), pages 141-166, May.
  9. Christoph Engel & Michael Kurschilgen, 2010. "Fairness Ex Ante & Ex Post – An Experimental Test of the German “Bestseller Paragraph”," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2010_29, Max Planck Institute for Research on Collective Goods, revised Nov 2010.
  10. Jordi McKenzie, 2010. "How do theatrical box office revenues affect DVD retail sales? Australian empirical evidence," Journal of Cultural Economics, Springer, vol. 34(3), pages 159-179, August.
  11. Allègre Hadida, 2010. "Commercial success and artistic recognition of motion picture projects," Journal of Cultural Economics, Springer, vol. 34(1), pages 45-80, February.
  12. Caroline Elliott & Rob Simmons, 2008. "Determinants of UK Box Office Success: The Impact of Quality Signals," Review of Industrial Organization, Springer, vol. 33(2), pages 93-111, September.
  13. Thorsten Hennig-Thurau & André Marchand & Barbara Hiller, 2012. "The relationship between reviewer judgments and motion picture success: re-analysis and extension," Journal of Cultural Economics, Springer, vol. 36(3), pages 249-283, August.

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