How the competitors’ online reviews affect product performance in the dynamic competitive market: an empirical analysis of the movie industry

ABSTRACT

Online consumer reviews have been shown to have a significant impact on the market performance of products. Yet little is known about the role of competing products’ online reviews in a dynamic competitive environment. Using field data, we investigate the impacts of online reviews of contemporaneous competing movies on the box office and attendance of a focal movie. The empirical results suggest that the competitor’s review rating, which displayed on the same ticketing page with a focal movie, has a negative impact on the economic performance of the focal movie. Interestingly, the competitor’s review volume has a negative impact only if its review rating is high. We further examine the heterogeneous effect in focal movies (sequels vs. non-sequels), and find the impacts of competitors’ reviews are stronger for non-sequels. Our research can help movie stakeholders optimize their market entry strategies, and provides theoretical implications for the research on online reviews.

KEYWORDS:

• Online consumer reviews
• competition
• movie industry
• spillover effects

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This research was supported by National Natural Science Foundation of China (72001169)