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Impact of Underlying Demand and Agglomeration of Supply on Seasonality: the Case of the Hollywood Film Industry

Author

Listed:
  • Manuel Cartier

    (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique)

  • Sébastien Liarte

    (CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine)

Abstract

The authors argue that it is possible to break the demand for films into two types: the underlying demand accounted for by audiences' behaviours owing to events outside the film industry (vacations, climate, etc.); and demand due to the agglomeration of supply by studios due to release dates selected close to each other. To ensure the success of their films, movie studios exploit peaks in demand. Such agglomeration increases seasonality and could lead studios to overestimate the true level of underlying demand at particular times. The aim of this article is to isolate the underlying demand in order to assess studios' choices in terms of release dates. The authors show that two periods – the beginning of the year and summer – are underutilized, with the release of fewer films than the market is able to absorb, while two other periods – spring and year's end – are overexploited. The choice of release date based on this criterion is a good predictor of a film's performance.

Suggested Citation

  • Manuel Cartier & Sébastien Liarte, 2012. "Impact of Underlying Demand and Agglomeration of Supply on Seasonality: the Case of the Hollywood Film Industry," Post-Print hal-01490655, HAL.
    • Handle: RePEc:hal:journl:hal-01490655
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    Citations

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    Cited by:

    1. Jordi McKenzie, 2023. "The economics of movies (revisited): A survey of recent literature," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 480-525, April.
    2. Paul Belleflamme & Dimitri Paolini, 2019. "Strategic attractiveness and release decisions for cultural goods," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(2), pages 198-224, April.
    3. Belleflamme, P. & Paolini, D., 2015. "Strategic Promotion and Release Decisions for Cultural Goods," LIDAM Discussion Papers CORE 2015037, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Elisa Salvador & Jean-Paul Simon & Pierre-Jean Benghozi, 2019. "Facing disruption: the cinema value chain in the digital age," Post-Print hal-02300929, HAL.

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