Online media coverage, consumer engagement and movie sales: A PVAR approach

Abstract

The advent of new media, such as Google, Twitter, and Facebook, has offered the movie industry new opportunities to market movies and increase sales. In this study, we investigate the relationship between online media activities and movie sales. In particular, this paper examines how media coverage (online news and social media posts) and consumer engagement (information search and reading) affect the sales of original movies and sequels in the opening week. By applying the panel vector auto-regression (PVAR) method, we found that online news, social media posts, and information reading were positively related to future sales of originals and sequels, while information search was not a significant predictor of movie sales for originals. Media coverage had a stronger and more durable marketing effect on the sales of originals, and consumer engagement had a stronger effect on the sales of sequels. Compared with social media posts, online news had a higher promoting effect on consumer engagement for sequels. Further, online media coverage and consumer engagement also had mutual effects on each other. This study suggests that managers of movie studios and theaters should apply different channel strategies and allocate different resources for originals and sequels.