Star Power in the Eye of the Beholder: A Study of the Influence of Stars in the Movie Industry

Marketing Letters, August 2013, pp. 1-12

17 Pages Posted: 5 Sep 2015

See all articles by Angela Xia Liu

Angela Xia Liu

Tsinghua University - School of Economics & Management

Yong Liu

University of Arizona

Tridib Mazumdar

Syracuse University - Whitman School of Management

Date Written: 2013

Abstract

Organizations employ various risk-mitigation strategies to cope with the uncertainty in marketing new products. In the motion picture industry, an important strategy is to cast star actors and actresses in movies. The ultimate box office success, however, depends on multiple stakeholders involved with financing, making, distributing and watching the movie. In pursuing different goals and interests, the stakeholders may look for different aspects of star power to mitigate their own risk. This paper examines how the influence of stars varies across key stakeholders in the movie market. The results show that, in general, stars have a greater impact on the stakeholders involved in the earlier stages of movie development and exhibition (where the risks are greater) than on those in later stages. Movie project financiers and exhibitors are strongly and directly influenced by star power, but news media and movie audiences are influenced less and only indirectly. Situated at the early stage of the movie “value chain,” the financiers are most concerned with stars’ past box-office performance. Exhibitors, however, are influenced by the “match” between a star’s genre participation history and the genre of a specific movie. In contrast, news media and movie audiences are influenced indirectly through the stars’ impact on earlier stakeholders and their decisions. The findings shed light on the value of employing star elements in new products, the marketing of stars, and movie promotion strategies.

Keywords: Entertainment Marketing, Movies, Movie Financing, New Product Strategies, Risk Mitigation, Stars, Star Power

Suggested Citation

Liu, Angela Xia and Liu, Yong and Mazumdar, Tridib, Star Power in the Eye of the Beholder: A Study of the Influence of Stars in the Movie Industry (2013). Marketing Letters, August 2013, pp. 1-12. Available at SSRN: https://ssrn.com/abstract=2655797

Angela Xia Liu

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China

Yong Liu (Contact Author)

University of Arizona ( email )

1130 E Helen Street
Tucson, AZ 85721
United States

HOME PAGE: http://www.u.arizona.edu/~yoliu/

Tridib Mazumdar

Syracuse University - Whitman School of Management ( email )

721 University Avenue
Syracuse, NY 13244-2130
United States

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