The Ripple Effect of Firm-Generated Content for New Movie Releases

54 Pages Posted: 11 Mar 2019

See all articles by Shijie Lu

Shijie Lu

University of Houston - C.T. Bauer College of Business

Isaac M. Dinner

Indeed

Rajdeep Grewal

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School

Date Written: February 18, 2019

Abstract

Marketers create social media, in the form of firm-generated content (FGC), to ignite interest in new products such as movies; in turn, there is a clear need to understand whether and how FGC influences demand. With a descriptive study, the authors investigate two potential mechanisms by which FGC may drive box office revenues: (1) a direct mechanism, such that users who see FGC directly drive revenue, and (2) a “ripple effect,” by which FGC increases movie-related user-generated content (UGC), which then drives consumption. The study data include 135,153 firm-generated and 4.9 million user-generated Twitter posts associated with 159 movies released by major studios in 2014 and 2015. Linear panel models reveal a positive, significant effect of FGC on movie sales, which UGC fully mediates, in support of a ripple effect. The model accounts for endogenous firm actions, unobserved movie heterogeneity, competition, and advertising. The evidence in support of ripple effects suggests that movie executives should not focus solely on gaining followers but rather on creating FGC that sparks conversations among users.

Keywords: Firm-Generated Content, Movies, User-Generated Content

JEL Classification: L, M

Suggested Citation

Lu, Shijie and Dinner, Isaac M. and Grewal, Rajdeep, The Ripple Effect of Firm-Generated Content for New Movie Releases (February 18, 2019). Available at SSRN: https://ssrn.com/abstract=3336856 or http://dx.doi.org/10.2139/ssrn.3336856

Shijie Lu

University of Houston - C.T. Bauer College of Business ( email )

Houston, TX 77204-6021
United States

Isaac M. Dinner

Indeed ( email )

721 Domain Drive
Austin, TX 78758
United States

Rajdeep Grewal (Contact Author)

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

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