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Modeling Movie Life Cycles and Market Share

Author

Listed:
  • Andrew Ainslie

    () (UCLA Anderson School of Management, 110 Westwood Plaza, Room B412, University of California, Los Angeles, Los Angeles, California 90095)

  • Xavier Drèze

    () (Wharton School, University of Pennsylvania, 3730 Walnut Street, Suite 700, Philadelphia, Pennsylvania 19104)

  • Fred Zufryden

    () (Marshall School of Business, Marketing Department, Accounting Building 301G, University of Southern California, Los Angeles, California 90089-0443)

Abstract

We examine box-office sales in the context of a market share model. This is accomplished by developing a combination of a sliding-window logit model and a gamma diffusion pattern in a hierarchical Bayes framework. We show that accounting for the full choice set available every week not only increases the fit of weekly movie sales but also leads to parameter estimates that depict a richer picture of the movie industry. We show that movie studios appear to have a good understanding of the products they produce, knowing when to support them and when not to. We also show that the effect of the number of opening week screens is overestimated in traditional models. Our research indicates that actors have a direct and directors an indirect effect on consumers’ movie choice. Releasing a movie contemporaneously with other movies of the same genre adversely affects box-office performance all around. Releasing a movie against movies of the same Motion Picture Association of America (MPAA) rating hurts its sales in the beginning, but there is a displacement effect, which leads to a less severe sales loss in the long run.

Suggested Citation

  • Andrew Ainslie & Xavier Drèze & Fred Zufryden, 2005. "Modeling Movie Life Cycles and Market Share," Marketing Science, INFORMS, vol. 24(3), pages 508-517, November.
  • Handle: RePEc:inm:ormksc:v:24:y:2005:i:3:p:508-517
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    File URL: http://dx.doi.org/10.1287/mksc.1040.0106
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    References listed on IDEAS

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    1. Anita Elberse & Jehoshua Eliashberg, 2003. "Demand and Supply Dynamics for Sequentially Released Products in International Markets: The Case of Motion Pictures," Marketing Science, INFORMS, vol. 22(3), pages 329-354.
    2. Nelson, Phillip J, 1975. "The Economic Consequences of Advertising," The Journal of Business, University of Chicago Press, vol. 48(2), pages 213-241, April.
    3. Ramya Neelamegham & Pradeep Chintagunta, 1999. "A Bayesian Model to Forecast New Product Performance in Domestic and International Markets," Marketing Science, INFORMS, vol. 18(2), pages 115-136.
    4. Sanjeev Swami & Jehoshua Eliashberg & Charles B. Weinberg, 1999. "SilverScreener: A Modeling Approach to Movie Screens Management," Marketing Science, INFORMS, vol. 18(3), pages 352-372.
    5. Thomas J. Steenburgh & Andrew Ainslie & Peder Hans Engebretson, 2003. "Massively Categorical Variables: Revealing the Information in Zip Codes," Marketing Science, INFORMS, vol. 22(1), pages 40-57, August.
    6. Mohanbir S. Sawhney & Jehoshua Eliashberg, 1996. "A Parsimonious Model for Forecasting Gross Box-Office Revenues of Motion Pictures," Marketing Science, INFORMS, vol. 15(2), pages 113-131.
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