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

Abstract

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.