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What’s a Movie Worth? Determining the Monetary Value of Motion Pictures’ TV Rights

51 Pages Posted: 5 Mar 2012  

Thorsten Hennig-Thurau

University of Muenster; Cass Business School, City University London

Mark B. Houston

Texas Christian University

Stefan Fuchs

Unity Media Group

Date Written: March 5, 2012

Abstract

Motion pictures remain among the most valuable products for broadcast by television (TV) stations around the globe. As a result, TV broadcast rights generate more revenues than the theater box office for the movie studios that own these assets and are often a crucial element in a film’s financing. A key managerial challenge for studios and for TV broadcasters is to determine the monetary value of the TV rights for a movie. This research develops a multi-equation model of a movie’s monetary TV rights value that accounts both for the differences in value-related information over time and for the differences in project-related risk associated with the varying information availability. Drawing on a large data set of U.S.-produced movies that aired on German TV, the authors estimate the model parameters simultaneously through partial least squares modeling as a prediction tool. This approach allows them to separate direct and indirect effects among value drivers and to estimate the monetary value of the German TV rights for individual movies for different points in time. Sellers and buyers can use the model to increase the efficiency and reduce the riskiness of price negotiations for the right to broadcast a particular film on TV.

Keywords: television, motion pictures, value calculation, Hollywood

JEL Classification: M31, L82

Suggested Citation

Hennig-Thurau, Thorsten and Houston, Mark B. and Fuchs, Stefan, What’s a Movie Worth? Determining the Monetary Value of Motion Pictures’ TV Rights (March 5, 2012). Available at SSRN: https://ssrn.com/abstract=2016536 or http://dx.doi.org/10.2139/ssrn.2016536

Thorsten Hennig-Thurau (Contact Author)

University of Muenster ( email )

Am Stadtgraben 13-15
Muenster, D-48143
Germany

HOME PAGE: http://www.marketingcenter.de/mm/en/index.php

Cass Business School, City University London ( email )

106 Bunhill Row
London, EC1Y 8TZ
United Kingdom

Mark B. Houston

Texas Christian University ( email )

Fort Worth, TX 76129
United States

Stefan Fuchs

Unity Media Group ( email )

Aachener Str. 746-750
Koeln, 50933
Germany

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