Munich Personal RePEc Archive

Managing the supply of short-life products. A duration analysis approach using the UK film industry

Izquierdo Sanchez, Sofia (2014): Managing the supply of short-life products. A duration analysis approach using the UK film industry.

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Abstract

Movies are uncertain products. Nobody knows much about them prior to their screening and their attempt to survive in the risky motion picture market week by week. This paper studies short-life products using the UK film industry as an example, with a larger database than employed previously, including high and low-budget films. Two effects not previously taken into account in the empirical literature are considered: cross-subsidisation and opportunity cost. Using a clog-log methodology and a sample of 552 films released in the UK, the empirical results highlight the importance of the distributor’s strategy and word-of-mouth for success in experience goods industries.

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