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Risky Business: Does recognition reduce uncertainty of the movie industry global box office revenue? * of the movie as a one-liner to reflect the characteristics of the movie industry. notifies that Risky Business (1983) is a comedy-drama movie starring Tom Cruise. The writer intentionally uses the name Master Thesis
Jönköping University, Jönköping International Business School, JIBS, Economics.
2010 (English)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Introduction

Movies are considered entertainment goods. Entertainment is one of the experience industries. Intangibility, perishability and heterogeneity are the most significant characteristics of the movie industry. An emotional reaction of consumers cannot be calculated in the same sense that most other physical goods can. If the movie succeeded in meeting the expectations, ticket price decreases will not necessarily indicate further purchases in the future. There are high risks and uncertainty in the movie industry.

Purpose

The purpose of this paper is to define through a hedonic price theory establishing whether the recognition is a significant factor to the global success of movies. The global success of the movies is determined by the global box office revenue. There are eight independent variables tested in this paper: global movie popularity, global popularity of the directors, global popularity of the authors, fame (determined by wining Academy Award), major studios, sequel, family genre and animation genre. Only one control variable, which is year of release, is included.

Method

The paper uses empirical model and the data set along with the results of the empirical analysis to achieve the purpose. Only secondary data were collected for the paper.

Conclusion

To reduce uncertainty in movie industry box office revenue, according to the data collected, recognition is significant to the consumers’ willingness to pay. The willingness to pay is determined by the global box office revenue. Only four independent variables, namely: sequels, Academy Award, the global popularity of the directors and the global popularity of the authors of the original script, are significant recognition factors to the global box office revenue. Movie producers shall be aware that consumers have to make sure utility gained from the consumption exceeds the costs in order to make purchases. Based on the sample collected, it can be summarized that consumers of the movie industry in general rely on previous consumption and recognition to reduce risks and uncertainty in terms of making purchases.

Place, publisher, year, edition, pages
2010. , 37 p.
Series
JIBS Working Paper Series, ISSN 1403-0454JIBS Research Reports, ISSN 1403-0462
Keyword [en]
Movie industry, recognition, risks and uncertainty, utility, willingness to pay, Hollywood, global box office revenue
National Category
Economics
Identifiers
URN: urn:nbn:se:hj:diva-12795OAI: oai:DiVA.org:hj-12795DiVA: diva2:330561
Presentation
2010-05-28, B4042, 08:44 (English)
Uppsok
Fine Art
Supervisors
Examiners
Available from: 2011-02-02 Created: 2010-07-16 Last updated: 2011-02-02Bibliographically approved

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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
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  • text
  • asciidoc
  • rtf