Information Discovery and the Long Tail of Motion Picture Content

Abstract:     
Recent papers have shown that, in contrast to “the Long Tail” theory, movie sales remain concentrated in a small number of hits. These papers have argued that concentrated sales can be explained, in part, by heterogeneity in quality and increasing returns from social effects. Our research analyzes an additional explanation: how incomplete information may skew sales patterns. We use the movie broadcast on pay-cable channels as an exogenous shock to the availability of information, and analyze how this shock changes the resulting sales distribution.

Our data show that the pay-cable broadcast shifts the distribution of DVD sales toward “Long Tail” movies, suggesting an information spillover from the broadcast. We further develop a learning-based model of DVD demand to precisely quantify the lost DVD sales due to incomplete information. Our study contributes to the academic literature on information provision and market outcomes, and the dynamics of long tail markets.

Number of Pages in PDF File: 34

Keywords: Incomplete information, product discovery, multichannel distribution, movie industry, cannibalization, movie broadcast, DVD sales and rental, Long Tail, sales distribution

working papers series