Product survival at the cinema: evidence from Hong Kong

Abstract

The lifetime of a motion picture is the margin through which supply adjusts to market demand due to demand-invariant admission prices and fixed seating capacity. The lifetimes of a sample of 493 motion pictures that were exhibited at cinemas in Hong Kong during 1994–1996 are examined. It is found that the hazard rate is an increasing function of time, and that the type of movie and the initial box office revenue are economically and statistically significant determinants of a movie's life length.