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How the competitors’ online reviews affect product performance in the dynamic competitive market: an empirical analysis of the movie industry

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  • Yingwei Xu
  • Haibo Wu
  • Rui Li

Abstract

Online consumer reviews have been shown to have a significant impact on the market performance of products. Yet little is known about the role of competing products’ online reviews in a dynamic competitive environment. Using field data, we investigate the impacts of online reviews of contemporaneous competing movies on the box office and attendance of a focal movie. The empirical results suggest that the competitor’s review rating, which displayed on the same ticketing page with a focal movie, has a negative impact on the economic performance of the focal movie. Interestingly, the competitor’s review volume has a negative impact only if its review rating is high. We further examine the heterogeneous effect in focal movies (sequels vs. non-sequels), and find the impacts of competitors’ reviews are stronger for non-sequels. Our research can help movie stakeholders optimize their market entry strategies, and provides theoretical implications for the research on online reviews.

Suggested Citation

  • Yingwei Xu & Haibo Wu & Rui Li, 2024. "How the competitors’ online reviews affect product performance in the dynamic competitive market: an empirical analysis of the movie industry," Applied Economics Letters, Taylor & Francis Journals, vol. 31(1), pages 75-80, January.
    • Handle: RePEc:taf:apeclt:v:31:y:2024:i:1:p:75-80
    DOI: 10.1080/13504851.2022.2128162
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