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Word-of-Mouth in Movies with Platform Release: Theory and Evidence

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  • Yijuan Chen
  • Xiaojing Ma
  • Qiang Pan

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Abstract

We study the word-of mouth effect on movies with platform release, a common marketing strategy in the motion picture industry. We construct a theoretical model which shows that the word-of-mouth effect together with a sliding-percentage contract between the movie distributor and exhibitors gives rise to the usage of platform release. Using the data in the U.S. motion picture industry from 2000 to 2005, we quantify the word-of mouth sales and estimate the information transmission process in the movies featuring platform release.

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Bibliographic Info

Paper provided by Australian National University, College of Business and Economics, School of Economics in its series ANU Working Papers in Economics and Econometrics with number 2013-608.

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Length: 28 Pages
Date of creation: Apr 2013
Date of revision:
Handle: RePEc:acb:cbeeco:2013-608

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Keywords: Word-of-Mouth; Platform Release; U.S.Motion Picture Industry;

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