Revealed word-of-mouth demand and adaptive supply: Survival of motion pictures at the Australian box office

This study considers a frailty duration approach to modelling the life-length of a sample of 360 films that went into wide release at the Australian box office from 1 January 2000 to 31 December 2005. The analysis extends previous research by considering a range of film-specific covariates relating to distribution, production, consumer signals, and weekly performance. In particular, it is shown that film success (defined in a duration context) responds to previewing, advertising, critical reviews, and US box office-but not to production budget, star power or opening-week screens. The study also reveals that it is appropriate to account for unobservable heterogeneity between films in the choice of empirical methodology.