Does bad word of mouth hurt a movie at the box office?
Not really. Looks like P.T. Barnum had it right: “I don’t care what the newspapers say about me as long as they spell my name right.”
This article uses actual word-of-mouth (WOM) information to examine the dynamic patterns of WOM and how it helps explain box office revenue. The WOM data were collected from the Yahoo Movies Web site. The results show that WOM activities are the most active during a movie’s prerelease and opening week and that movie audiences tend to hold relatively high expectations before release but become more critical in the opening week. More important, WOM information offers significant explanatory power for both aggregate and weekly box office revenue, especially in the early weeks after a movie opens. However, most of this explanatory power comes from the volume of WOM and not from its valence, as measured by the percentages of positive and negative messages.
Source: “Word of Mouth for Movies: Its Dynamics and Impact on Box Office Revenue” from Journal of Marketing 70(3): 74-89
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