Oscar Buzz and the Influence of Word of Mouth on Movie Success by Owen Eagan

Author:Owen Eagan
Language: eng
Format: epub
ISBN: 9783030411800
Publisher: Springer International Publishing

New ideas, products or services were typically introduced by innovators, who are described as venturesome and risk takers. They also tend to be cosmopolites with networks outside of their social systems. The early adopters are a more integrated part of the local system and tend to be localites. This category usually consists of the highest degree of opinion leadership (Rogers 2003).

The early majority frequently interact with their peers but are seldom opinion leaders. They may deliberate for some time before adopting a new idea and their innovation-decision period is relatively longer. The late majority are generally skeptical and cautious of new ideas. They are strongly influenced by peers but their relatively limited resources mean that most of the uncertainty about the new idea must be eliminated before adoption. Laggards are the most localite and many are near isolates in their social system. Their resistance to new ideas may be rational from their perspective given their limited resources (Rogers 2003).

Rogers characterized innovators and early adopters as opinion leaders due to their ability to influence others. That is, the early majority and subsequent groups were unlikely to adopt a new idea unless it was first adopted by the opinion leaders. It is important to note that opinion leaders can serve as an expert on a single subject or a variety of subjects and that we are all opinion leaders on one subject or another. Even children can serve as opinion leaders on topics such as toys and video games. It is for this reason that we can find ourselves at different points on this curve at different times depending on the topic (Rogers 2003).

As we mentioned earlier, there’s as an adage in Hollywood that “Nobody knows anything.” That is, even though big data can inform investment decisions, research has found that there is no formula studios can use to guarantee a movie’s success. This is because of the influence of word of mouth and whether viewers recommend a film or not.

Goldman’s contention was subsequently confirmed in a study by Arthur DeVany of the University of California at Irvine and David Walls of the University of Hong Kong. In their analysis of 300 movies released between May 1985 and January 1986, they found that 20 percent of the films generated 80 percent of the revenue. However, they were unable to identify any characteristics such as the genre, cast or the budget that distinctly distinguished these movies from others. The best predictor they found was the movie’s performance the previous week (Cassidy 1997).

Therefore, in the fall of 2015, my students and I conducted a study to evaluate the effects of word of mouth on movies. We hypothesized that if word of mouth was a primary indicator of movie success then it should be evident in the difference in revenue from week to week for high-performing and low-performing films (Eagan 2016).

To test this hypothesis, we attempted to assess the impact of word of mouth on successful and unsuccessful movies over the previous 20 years. We

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