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

Author

Listed:
  • Yijuan Chen
  • Xiaojing Ma
  • Qiang Pan

    ()

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.

Suggested Citation

  • Yijuan Chen & Xiaojing Ma & Qiang Pan, 2013. "Word-of-Mouth in Movies with Platform Release: Theory and Evidence," ANU Working Papers in Economics and Econometrics 2013-608, Australian National University, College of Business and Economics, School of Economics.
  • Handle: RePEc:acb:cbeeco:2013-608
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    File URL: https://www.cbe.anu.edu.au/researchpapers/econ/wp608.pdf
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    More about this item

    Keywords

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

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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