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.
- Market expansion
- Motion pictures
McKenzie, J., & Smirnov, V. (2018). Blockbusters and market expansion: evidence from the motion picture industry. Journal of Cultural Economics, 42(2), 341–352. https://doi.org/10.1007/s10824-017-9308-y