The theatrical film industry can structurally be divided in three stages: production, distribution and exhibition. In each stage companies face strategic decisions that help determine the success of a given film. This thesis aims to optimize these strategic decisions on two issues: the sequel-making process, concerning producers, and the timing of release in international markets, decided by distributors.
Following from these issues, two research questions are established. First, if it’s (still) worth it for a producer to make a sequel film. Second, if the time lag between releases in North America and Portugal affects a film’s revenues in the latter market. To pursue these objectives, the approach established by Basuroy & Chatterjee (2008) was followed: a Generalized Estimating Equations (GEE) method, under a Gaussian family, with an identity link and exchangeable correlation structure.
For the producer’s problem, data was obtained for 208 films released in 2011 in North America. The results show that sequel films consistently outperform non-sequels at the box office. Furthermore, this effect is moderated by longer time gaps between parent and target and producers should expect faster decaying weekly revenues from sequels.
For the distributor’s problem, Portuguese data consists of 139 of those films covered in the producer’s problem, which, due to release lags, were released in Portugal between 2009 and 2013. The results show that longer release lags have a significant and negative effect on revenues and that this effect is largely concentrated in the first few weeks of a films’ release
