Market Roll-Out and Retailer Adoption for New Brands
Marketing Science
Using Online Conversations to Study Word-of-Mouth Communication
Marketing Science
Modeling Movie Life Cycles and Market Share
Marketing Science
A Dynamic Model of the Effect of Online Communications on Firm Sales
Marketing Science
Designing a social-broadcasting-based business intelligence system
ACM Transactions on Management Information Systems (TMIS)
Structural Workshop Paper---Data Selection and Procurement
Marketing Science
How Does the Variance of Product Ratings Matter?
Management Science
Sequential and Temporal Dynamics of Online Opinion
Marketing Science
The impact of word-of-mouth on book sales: review, blog or tweet?
Proceedings of the 14th Annual International Conference on Electronic Commerce
Whose and what chatter matters? The effect of tweets on movie sales
Decision Support Systems
The influence of online word-of-mouth on long tail formation
Decision Support Systems
Social media, traditional media, and music sales
MIS Quarterly
| Hi-index | 0.00 |
Our objective in this paper is to measure the impact (valence, volume, and variance) of national online user reviews on designated market area (DMA)-level local geographic box office performance of movies. We account for three complications with analyses that use national-level aggregate box office data: (i) aggregation across heterogeneous markets (spatial aggregation), (ii) serial correlation as a result of sequential release of movies (endogenous rollout), and (iii) serial correlation as a result of other unobserved components that could affect inferences regarding the impact of user reviews. We use daily box office ticket sales data for 148 movies released in the United States during a 16-month period (out of the 874 movies released) along with user review data from the Yahoo! Movies website. The analysis also controls for other possible box office drivers. Our identification strategy rests on our ability to identify plausible instruments for user ratings by exploiting the sequential release of movies across markets---because user reviews can only come from markets where the movie has previously been released, exogenous variables from previous markets would be appropriate instruments in subsequent markets. In contrast with previous studies that have found that the main driver of box office performance is the volume of reviews, we find that it is the valence that seems to matter and not the volume. Furthermore, ignoring the endogenous rollout decision does not seem to have a big impact on the results from our DMA-level analysis. When we carry out our analysis with aggregated national data, we obtain the same results as those from previous studies, i.e., that volume matters but not the valence. Using various market-level controls in the national data model, we attempt to identify the source of this difference. By conducting our empirical analysis at the DMA level and accounting for prerelease advertising, we can classify DMAs based on their responsiveness to firm-initiated marketing effort (advertising) and consumer-generated marketing (online word of mouth). A unique feature of our study is that it allows marketing managers to assess a DMA's responsiveness along these two dimensions. The substantive insights can help studios and distributors evaluate their future product rollout strategies. Although our empirical analysis is conducted using motion picture industry data, our approach to addressing the endogeneity of reviews is generalizable to other industry settings where products are sequentially rolled out.