Talent and publicity as determinants of superstar incomes: empirical evidence from the motion picture industry

ABSTRACT

By drawing on the two prevailing economic stardom theories, the paper investigates the sources of superstardom in the US movie industry. For the econometric analysis, we use income and popularity data of screen actresses and actors from the annual Celebrity 100 lists as published by Forbes Magazine. The empirical findings indicate that Hollywood, in contrast to other professional settings, supports two different types of stars. While ‘talent stars’ exploit acting merit, it is media exposure that drives the income of ‘publicity stars’. Apparently, in the motion picture industry both underlying resources are equally important and equally valued. Based on these insights we develop concrete recommendations for the career management of artists and the management of film projects.

KEYWORDS:

• Superstars
• rosen stars
• adler stars
• talent
• publicity
• movie industry

JEL CLASSIFICATION:

• Z10
• L82
• J31
• J44
• D31

Acknowledgments

The authors would like to thank the editor and the anonymous reviewers for insightful and valuable comments on previous drafts of the article. Additionally, they thank Frederic Hugo Gruninger for excellent research assistance and helpful suggestions that further improved the manuscript. Responsibility for any remaining errors resides with the authors.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ For a comprehensive review of the existing literature and a summary of the research agenda, please refer to Hadida (2009) and Eliashberg, Elberse, and Leenders (2006). Recent studies on star power in the movie industry are reported in Hofmann et al. (2017), Joshi (2015) and Treme and Craig (2013).

² Frey (1998) points out that this may even hold true if the superior service is offered at a higher price.

³ Opitz and Hofmann (2016) apply this view to motion picture franchises.

⁴ For analyzing the economics of ‘celebrities’, defined as ‘persons who are known for their well-knowness’ (Boorstin 1961), Nüesch (2007) specifies the primary value of celebrities as the direct utility received from gossiping about the person with other informed peers (i.e. interaction benefit).

⁵ Film specific information was retrieved from four different websites: www.the-numbers.com, www.imdb.com, www.metacritic.com and www.boxofficemojo.com. These sources provide complimentary information on movies and film stars and have been widely used in previous studies.

⁶ Please note that a higher fraction of actresses and actors that were wrongfully assigned to a particular star category would weaken our results, because it would make it more difficult to detect differences between the two groups in the empirical models.”

⁷ In order to address this latter point and to further check the robustness of our results (as suggested by an anonymous reviewer), we divided the sample by drawing on two other highly recognized industry awards, i.e. Golden Globe and Screen Actors Guild Award wins. The results are stable across the three different measures.

⁸ We decided to use RE versus fixed-effects (FE) here for two main reasons. From a technical point of view, the FE model needs significant variation ‘within’ the individual star to estimate coefficients consistently. In our case, this variation is less than 10 percent. The second reason follows a substantive argument. Prior studies suggest that the pay of actresses and actors may be influenced by time-invariant factors such as gender, which cannot be investigated by using fixed-effects models.