Movie Blockbusters Predicted By Online WOM?
We all know that many music, games and movie companies have been trying to deny the internet revolution for years. After a period of denial, they tried to battle the disruptive force internet by putting their lawyers in action, but this was mission impossible too. Now it seems that many entertainment companies are embracing the internet…
Word of mouth campaigns have occasionally played an important role in the marketing of new entertainment and media (movies, music, books and games), but research to establish the major drivers of success has produced mixed results.
As a result, social media spend and monitoring is still a relatively small portion of the overall entertainment media spend.
However, a recent research paper by Dellarocas, Zhang and Awad, has used different analytical techniques to demonstrate that – among other factors like box office revenue, marketing budget and star power – a movie’s early word of mouth (quantified as volume of online movie reviews, tone of review and the gender mix of online reviewers over the first few days of a movie’s release) has a significant impact on forecast movie revenues.
As you might expect, more positive reviews are associated with higher revenues. In addition, however, a greater total volume of reviews (regardless of tone) and a greater diversity of reviewer genders are also associated with higher predicted revenues. Without this online metric data, the accuracy of projections declines by over 1/3.
