Does Advertising Spending Influence Media Coverage of the Advertiser?

Recent studies have shown that consumers’ product choices are significantly influenced by media coverage and recommendations in various media outlets. Unlike advertising, consumers perceive these sources as neutral and more credible because they usually presume that editorial content and product coverage in newspapers and magazines are independent and free from advertisers’ influence. In this article, the authors show how advertising activities of firms may influence media coverage to the advertiser’s advantage. They analyze a recent (2002–2003) large data set comprising 291 fashion companies based in Italy and their advertising and product coverage data published in newspapers and magazines of 123 publishers from Italy, France, Germany, the United Kingdom, and the United States. Controlling for firm heterogeneity, endogeneity, and the simultaneity of advertising and coverage, the authors find that, overall, (1) there is evidence of a strong positive influence of advertising on coverage, (2) publishers that depend more on a specific industry for their advertising revenues are prone to a higher degree of influence from their corporate advertisers than others, (3) peer pressures from competing publishers affect coverage decisions, (4) larger and more innovative companies are at an advantage for obtaining coverage for their products, and (5) the effects of corporate advertising influence exist in both Europe and the United States. These findings raise concerns about the independence of editorial content and coverage of magazines

Managerial Objectives, the R-Rating Puzzle and the Production of Violent Films

We analyze project choice in the motion pictures industry and find evidence consistent with revenue maximization and excessive hedging. We focus on the production of violent films and films that feature sex and violence. We find that such movies do not provide excess returns, but they increase revenues, particularly in the international market. Further, they tend to lose money

Fast and frequent: Investigating box office revenues of motion picture sequels

This paper conceptualizes film sequels as brand extensions of a hedonic product and tests (1) how their box office revenues compare to that of their parent films, and (2) if the time interval between the sequel and the parent, and the number of intervening sequels, affect the revenues earned by the sequels at the box office. Using a random sample of 167 films released between 1991 and 1993, we find that sequels do not match the box office revenues of the parent films. However, they do better than their contemporaneous non-sequels, more so when they are released sooner (rather than later) after their parents, and when more (rather than fewer) intervening sequels come before them. Like other extensions of hedonic products, sequels exhibit satiation to the extent that their weekly box office collections fall faster over time relative to contemporaneous non-sequels. Managerial implications of the results are discussed.

Reviewing the reviewers: The impact of individual film critics on box office performance

Entertainment marketing, Motion picture distribution and exhibition, Movie choice, Predictors, Influencers, Wide-release, Platform-release, Movie critics, Stochastic variable selection, Bayesian models, New product research, C01, C11, C52, M31,