Box‐Office Demand: The Importance of Being #1 | Zendy

Cabral Luís | Zendy; Natividad Gabriel | Zendy

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Box‐Office Demand: The Importance of Being #1

Author(s) -

Cabral Luís,

Natividad Gabriel

Publication year - 2016

Publication title -

the journal of industrial economics

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.93

H-Index - 77

eISSN - 1467-6451

pISSN - 0022-1821

DOI - 10.1111/joie.12095

Subject(s) - box office , shock (circulatory) , channel (broadcasting) , advertising , test (biology) , on demand , business , economics , computer science , telecommunications , commerce , medicine , paleontology , biology

We propose a theoretical framework to understand the effect on a movie's eventual theatrical success of leading the box office during the opening weekend. We consider two possible channels: a positive shock to the utility from watching the movie and a greater awareness of the movie's existence. We derive a series of testable predictions, which we test on U.S. box office data. The results suggest that being #1 in sales during the opening weekend has an economically and statistically significant effect on the movie's total demand; and that the primary channel for this effect is through the greater awareness induced by being #1.

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