When it pays to wait: Optimizing release timing decisions for secondary channels in the film industry

Publication Type:
Journal Article
Journal of Marketing, 2016, 80 (4), pp. 20 - 38
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© 2016, American Marketing Association. This study examines the optimization of interrelease timing decisions, focusing on box office and DVD sales in the U.S.motion picture industry. It aims to improve managerial decision making by jointly modeling the revenue in these twochannels through a copula modeling approach. As in previous studies, the authors find that the time lag from box officerelease to DVD release should be increased to optimize total movie performance, but they conclude that previousstudies have systematically underestimated the optimal time lag. This study is the first to challenge the assumption of anegative decay in DVD performance as a function of time; its results suggest that a delayed DVD release is still optimalfor maximizing revenue in the DVD channel. This study's model suggests that, on average, individual movies areapproximately eight weeks away from their optimal lag and that the net impact of optimizing would be improvements intotal and DVD revenue by 2.5% and 5.6%, respectively. Therefore, this model is expected to enhance managerialdecision making by offering the ability to predict the optimal time lag for individual movies.
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