The Ripple Effect of Firm-Generated Content on New Movie Releases

Abstract

Marketers frequently create social media content (i.e., firm-generated content; FGC) to ignite interest in new movies. Thus, there is a clear need to understand the magnitude and heterogeneity of the effect of FGC on movie demand and associated user-generated content (UGC). The authors empirically examine the complex interactions among FGC, UGC, and sales using social media (tweet) data that are normally available to firms. They investigate two potential mechanisms by which FGC may drive box office revenues: (1) a direct mechanism, such that users who see FGC directly drive revenue, and (2) an indirect “ripple effect,” by which FGC increases movie-related UGC, which then drives consumption. By analyzing 145,502 firm-generated and 5.9 million user-generated Twitter posts associated with 159 movies, the authors find a positive and significant effect of FGC on movie sales, which UGC fully mediates, which supports the indirect ripple effect reasoning. Impressions of FGC by followers of firm accounts, as opposed to nonfollowers of firm accounts, mainly drive the effect of FGC on UGC. In addition, FGC by movie accounts is more effective than that by actors and studios. Firms’ regular posts with a movie-specific hashtag are more effective than replies, retweets, and posts without the hashtag. The finding of the ripple effect suggests that movie executives should focus on creating FGC that sparks conversations among followers when new movies are released.