Managing the supply of short-life products. A duration analysis approach using the UK film industry

Research output: Contribution to journalArticle

Abstract

Movies are uncertain products. Nobody knows much about them prior to their screening and their attempt to survive in the risky motion picture market week by week. This paper studies short-life products using the example of the UK film industry, including high and low-budget films. Using a clog-log methodology and a sample of 552 films, the empirical results highlight the importance of the distributor's strategy and word-of-mouth for success in experience goods industries. Two strategies, cross-subsidisation and opportunity cost, not previously addressed are considered. The results show these effects to be especially significant for low budget movies.

Original languageEnglish
Pages (from-to)75-89
Number of pages15
JournalBulletin of Economic Research
Volume71
Issue number1
Early online date2 Dec 2018
DOIs
Publication statusPublished - Jan 2019

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Duration analysis
Film industry
Movies
Empirical results
Word-of-mouth
Cross-subsidization
Distributor
Motion pictures
Screening
Industry
Methodology
Opportunity cost

Cite this

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abstract = "Movies are uncertain products. Nobody knows much about them prior to their screening and their attempt to survive in the risky motion picture market week by week. This paper studies short-life products using the example of the UK film industry, including high and low-budget films. Using a clog-log methodology and a sample of 552 films, the empirical results highlight the importance of the distributor's strategy and word-of-mouth for success in experience goods industries. Two strategies, cross-subsidisation and opportunity cost, not previously addressed are considered. The results show these effects to be especially significant for low budget movies.",
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