Blockbusters and market expansion: evidence from the motion picture industry

Jordi McKenzie, Vladimir Smirnov

Research output: Contribution to journalArticlepeer-review

Abstract

Like other cultural industries, the theatrical film industry is subject to the ‘blockbuster effect’, where popular products often dominate their competition by orders of magnitude over relatively short-run time horizons. This paper investigates this particular feature of the industry and the implication for overall market size. Using simple regression analysis, a positive relationship between (product-level) market concentration and market size is established using weekly box office revenue data from the US motion picture industry. This empirical evidence supports a simple theoretical model of heterogeneous consumers who selectively participate in the market.
Original languageEnglish
Pages (from-to)341–352
Number of pages12
JournalJournal of Cultural Economics
Volume42
Issue number2
DOIs
Publication statusPublished - May 2018

Keywords

  • Blockbusters
  • Market expansion
  • Motion pictures

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