The Impact of Attention and Word-of-Mouth on Box-Office Revenues

As it’s commonly known that the movie industry is very innovative. Because the diffuse characteristic of popular products is with exponential pattern, it’s more important to do the sales forecast at initial stage and analyze the diffusing speed. If the marketers have a statistical model to do the sales forecast well, then they can make right decisions based on the forecasts. Since the product life cycle of movies is very short, it is easy to observe the whole diffusion process in three or four months. Therefore, this study takes the American movies as empirical research and the main analytical method for this research is Bass Diffusion Model.

In general, past scholar’s articles of which studied on word-of-mouth were focus on the variance and volume of reviews; however, if consumers could know the evaluation of the products and how many people paid attention to the products, then the degree of attentions which the products attract can be taken as a kind of word-of-mouth effect. By comparing different factors, it is hoped to find an efficient forecasting model with greater forecasting ability and help companies in making more effective marketing strategies.