Abstract for: Modeling Movie Release Strategies

This research examines the impact of release strategies on the diffusion of motion-picture movies at the US domestic box-office. A model is developed that captures consumer choice as a behavioral process accounting for the movie’s intrinsic attributes, seasonality, word-of-mouth, network effects, consumer heterogeneity, marketplace competition, and managerial inputs. The model estimates weekly box-office receipts for 137 movies and achieves a median r-squared of 0.98 and fits 91 percent of the movies with an r-squared greater than 0.75. The study demonstrates that accounting for this full range of factors not only improves the model’s fit, but also leads to a parameter set that depicts a richer description of the movie industry. Managerial decisions regarding the selection of a movie’s release date and its distribution strategy are found to significantly impact box-office performance.