Abstract:

Whereas the traditional focus in Word-of-Mouth (WOM) literature has been on understanding how WOM of a movie influence the box office of its own, this research investigates the impact of WOM on box office in a dynamic competitive view. We propose that movies released in the same schedule compete with each other dynamically, thus the box office of a movie not only depends on the WOM of its own, but also relates to the WOM of peer movies’ in the same schedule. Using box office and WOM data of 780 movies during 2011-2014 in mainland china, we found that the gap between a focal movie’s WOM valence and the highest WOM valence in the same schedule has a negative impact on the box office of the focal movie. Moreover, this effect is moderated by the number of movies in the schedule and the season the movie is released (whether it’s high season or not). The marketing strategy is discussed as well based on these findings.

Key words: Word-of Mouth, Box office, Dynamic competition