Abstract
This study examines the role of word-of-mouth in the movie theatre industry. Word-of-mouth is tested as a mediator between pre-release studio actions (stars, production budget, and number of screens) and box office revenue. The results suggest that word-of-mouth fully mediates the relationship between stars and box office revenue. A partial mediation of word-of-mouth occurs in case of production budget and number of screens as pre-release actions leading to box office revenue. This study emphasizes the importance of word-of-mouth in contributing and maintaining movie revenue, and also helps movie makers to take decisions on investing on word-of-mouth after releasing a movie. Key words: Word-of-mouth, pre-release, post-release, movie theatre industry, stars, box office revenue, product budget, number of screens.
Highlights
Word-of-mouth (WOM), which is a form of exchange between two or more customers regarding information about different products or services, has become an issue of interest for marketers and researchers as potential substitute for traditional commercial advertisements, which are no longer that attractive and appealing because of the rising competition.WOM is different from the traditional advertising due to the reason that it imparts more credibility to customers as customers trust other customers more than any other sources of information
Prior research has studied the factors leading to box office revenue, and WOM has been studied as an independent variable impacting the revenue; it remains unclear which pre-release variables have an impact on the post-release variables (WOM here), and what is the sequence that is followed
Taking a step toward closing the gap, WOM was tested as a mediator between pre-release actions and box office revenue
Summary
Word-of-mouth (WOM), which is a form of exchange between two or more customers regarding information about different products or services, has become an issue of interest for marketers and researchers as potential substitute for traditional commercial advertisements, which are no longer that attractive and appealing because of the rising competition.WOM is different from the traditional advertising due to the reason that it imparts more credibility to customers as customers trust other customers more than any other sources of information. Word-of-mouth (WOM), which is a form of exchange between two or more customers regarding information about different products or services, has become an issue of interest for marketers and researchers as potential substitute for traditional commercial advertisements, which are no longer that attractive and appealing because of the rising competition. Researchers in the past (Mahajan et al.,1984) have found WOM to be mainly powerful when customers are making buying decisions about the products/services that are new in the marketplace and customers are only aware of those products/services but do not know well about them. A newly released product/service is campaigned by ads so that the customers have some set expectations about the product/service performance before using them, but they do not know how those products/services are going to perform in reality after using/experiencing them
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
