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Learning about movies: the impact of movie release types on the nationwide box office

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  • Xinlei Chen
  • Yuxin Chen
  • Charles Weinberg

Abstract

Major Hollywood studios typically release new movies in North America in one of the two ways, wide release or platform release. In this paper, we investigate how release form affects the demand of a new movie after it is nationally released. In particular, we focus on movies for which the platform release is pre-planned to make the problem tractable. We estimate our model using a sample of Hollywood movies that eventually received nationwide release from 1999 to 2003. Our results show that platform release shifts consumers’ perception of unobservable movie appeal through its first stage performance, which turns out to be a stronger effect than that of advertising. Meanwhile, we find that the demand for platform movies decays faster than for wide release ones after their national release. Using counterfactual analysis, we find that more than half of the platform movies which later went to national release would have earned higher profits if they had been given a wide release. Copyright Springer Science+Business Media New York 2013

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  • Xinlei Chen & Yuxin Chen & Charles Weinberg, 2013. "Learning about movies: the impact of movie release types on the nationwide box office," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 37(3), pages 359-386, August.
    • Handle: RePEc:kap:jculte:v:37:y:2013:i:3:p:359-386
    DOI: 10.1007/s10824-012-9189-z
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    8. Arici, Cemali & Yucel, Eray, 2019. "An Economic Perspective to Independent Cinema," MPRA Paper 98679, University Library of Munich, Germany, revised 16 Feb 2020.
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