Distribution strategy and movie performance: an empirical note

Abstract

This paper examines the Italian movie industry and documents a significant role of distribution strategy affecting film success. While the evidence is consistent with the positive “rent capture” effect of star artists (Ravid in J Bus 72:463–492, 1999), the crucial role of famous directors (John et al. in Working Paper, New York University, 2004), their experience (John et al. in Working Paper, New York University, 2004), the significant impact of critics (Basuroy et al. in J Market 67: 103–117 2003), financing strategies (Palia et al. in Rev Financ Stud 21(2):483–511, 2008), and stock market reactions (Einav and Ravid in J Cultural Econ 33, 311–319, 2009), this paper adds the crucial role of distribution power, such as the alliance with reputable foreign distributer and the choice of theatre location, in revenue success and endurance in the market. Additionally, we find evidence of success for specialization in comics but not in R-rated action movies (Ravid and Basuroy in J Bus 77:155–192, 2004).