Management of Revenue Streams of Intellectual Properties in Sequential Markets

34 Pages Posted: 12 Aug 2011

See all articles by James Jianxin Gong

James Jianxin Gong

California State University at Fullerton

S. Mark Young

University of Southern California - Leventhal School of Accounting

Date Written: August 11, 2011

Abstract

We study life cycle revenues of a particular category of intellectual property (IP), motion pictures, which sell in different formats in two sequential markets: the theatrical market and the home video market. We combine data collected from numerous public and proprietary sources and form a final sample of 654 motion pictures. Then we perform ordinary least square (OLS) analysis on the relationship between measures of the upstream market performance and downstream revenues. We document the positive impact of financial and nonfinancial measures of performance in the upstream theatrical market on subsequent revenues in the downstream home video market. We next examine the relevance of the nonfinancial measures in the managerial decisions regarding the product life in the upstream market. We find that the same set of performance measures influence the managerial decision regarding the motion picture’s theatrical life span. Finally, we study the relationship between the quality of managerial decisions and return on investment. We find that the quality of this decision is positively associated with total returns on investment in production and advertising of the motion picture. This study suggests that a set of financial and nonfinancial measures of performance in one market of IP can predict future performance in subsequent markets of the IP. These measures are also relevant in managerial decisions. This study differs from prior research in that it focuses on product level rather than firm level analysis.

Keywords: product life cycle, sequential markets, nonfinancial performance measures, revenue driver

Suggested Citation

Gong, Jianxin and Young, S. Mark, Management of Revenue Streams of Intellectual Properties in Sequential Markets (August 11, 2011). AAA 2012 Management Accounting Section (MAS) Meeting Paper, Available at SSRN: https://ssrn.com/abstract=1908439 or http://dx.doi.org/10.2139/ssrn.1908439

Jianxin Gong (Contact Author)

California State University at Fullerton ( email )

Department of Accounting
Mihaylo College of Business and Economics
Fullerton, CA 92831
United States
(657)278-3897 (Phone)
(657)278-4518 (Fax)

S. Mark Young

University of Southern California - Leventhal School of Accounting ( email )

Los Angeles, CA 90089-0441
United States
213-740-4848 (Phone)
213-747-2815 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
95
Abstract Views
1,205
rank
296,843
PlumX Metrics