THE MARKET FOR MOTION PICTURES: RANK, REVENUE, AND SURVIVAL |
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| Authors: | ARTHUR S DE VANY W DAVID WALLS |
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| Institution: | *We would like to thank Morten Hviid, Boyan Jovanovic, Steve Lippman, Walter Oi, Sherwin Rosen, participants of the National Bureau of Economic Research Conference on New Products, and two anonymous referees for comments that have helped to improve the paper. We are also indebted to David Brownstone for discussions on statistical modeling. None of these individuals is responsible for any errors in the paper.;Department of Economics and Institute for Mathematical Behavioral Sciences, University of California, Irvine Phone 1–714-824-5269, Fax 1–714-824-2182, E-mail;School of Economics and Finance, The University of Hong Kong Phone 852–2859-1049, Fax 852–2548-1152, E-mail |
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| Abstract: | Every motion picture is an innovation that competes for theater screens and audiences during its brief life against a changing array of imperfect substitutes. We analyze a large sample of motion pictures as an evolving rank tournament of survival and death. The results indicate that the failure rate of motion pictures is time-dependent and survival time is strongly related to the number of initial bookings. Weekly box office revenue is highly convex in rank, which is consistent with Rosen's superstar phenomenon. Our results have implications for motion picture licensing arrangements, which have been severely restricted by U.S. court decisions. |
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