Does 3D Make Sense for Hollywood? The Economic Implications of Adding a Third Dimension to Hedonic Media Products

Abstract

This article examines the economic effect of the 3D feature on movie success by using secondary data from all movies released in digital 3D between 2004 and 2011, and a 2D control sample. Using propensity score matching, the authors provide evidence for a sample selection bias that leads to an overestimation of the 3D effect if not accounted for. Matching results show that 3D movies are, on average, not economically advantageous when compared with 2D “twins.” However, subsequent weighted least squares regression analyses find that the impact of 3D on movie success varies in a non-linear, inverted U-shaped way with a “trend” variable that measures the point in time of a movie release and with a number of movie genres. A post-hoc analysis shows that a consumer's decision to attend a 3D screening of a 3D movie (instead of a 2D screening) is influenced by several factors, including whether the film is originally shot in 3D or the 3D element is added during postproduction.