Predicting the Performance of Motion Pictures

Abstract

I examined the performance of motion pictures released in the United States and Canada between October 1987 and October 1989. Performance was measured by two dependent variables: domestic rentals (RENTs) and the length of run (LOR) of each film. In addition, a new independent variable designed to measure the impact of competition on motion picture performance was hypothesized. LOR was found to be a reliable proxy for RENTs in predicting performance and will allow researchers to expand the base of films that can be included in future studies. Further, the independent variable for competition was found to have a significant negative relation with RENTs as a predictor of performance. That is, as the concentration ratio for a specific film increases, the competition that film faces increases; as a result, the RENTs for that specific film decrease.