IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Research Note—Prerelease Demand Forecasting for Motion Pictures Using Functional Shape Analysis of Virtual Stock Markets

  • Natasha Zhang Foutz

    ()

    (McIntire School of Commerce, University of Virginia, Charlottesville, Virginia 22904)

  • Wolfgang Jank

    ()

    (Robert H. Smith School of Business, University of Maryland, College Park, Maryland 20742)

Registered author(s):

    Prerelease demand forecasting is one of the most crucial yet difficult tasks facing marketers in the $60 billion motion picture industry. We propose functional shape analysis (FSA) of virtual stock markets (VSMs) to address this long-standing challenge. In VSMs, prices of a movie's stock reflect the dynamic demand expectations prior to the movie's release. Using FSA, we identify a small number of distinguishing shapes, e.g., the last-moment velocity spurt, that carry information about a movie's future demand and produce early and accurate prerelease forecasts. We find that although forecasting errors from the existing methods, e.g., those that rely on movie features, can be as high as 90.87%, our approach results in an error of only 4.73%. Because demand forecasting is especially useful for managerial decision making when provided a movie's release, we further demonstrate how our method can be used for early forecasting and compare its power against alternative approaches. We also discuss the theoretical implications of the discovered shapes that may help managers identify indicators of a potentially successful movie early and dynamically.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://dx.doi.org/10.1287/mksc.1090.0542
    Download Restriction: no

    Article provided by INFORMS in its journal Marketing Science.

    Volume (Year): 29 (2010)
    Issue (Month): 3 (05-06)
    Pages: 568-579

    as
    in new window

    Handle: RePEc:inm:ormksc:v:29:y:2010:i:3:p:568-579
    Contact details of provider: Postal: 7240 Parkway Drive, Suite 300, Hanover, MD 21076 USA
    Phone: +1-443-757-3500
    Fax: 443-757-3515
    Web page: http://www.informs.org/Email:


    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:inm:ormksc:v:29:y:2010:i:3:p:568-579. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.