Article

Success Drivers of Fiction Books: An Empirical Analysis of Hardcover and Paperback Editions in Germany

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Abstract

Despite consumer's widespread interest in reading, enjoying, and buying books, very little research has considered the critical success factors of books. This article focuses on similarities and differences between success factors when selling fiction books sequentially in hardcover and paperback form. Using a large dataset gathered in cooperation with a leading German market research institute, this work estimates a seemingly unrelated regression model and finds that key marketing considerations—such as popular authors (stars), special genres, publisher strengths, and book cover designs—have different (and sometimes conflicting) influences on sales of the same book title depending on the edition format.

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... Visible in nearly every ad, prominently placed as a sticker on the book cover, and also mentioned verbatim in the TV commercial is Rossmann's status as a 'Spiegel bestselling author'. This leads us to the "star power" of an author which represents an important driver of sales success for hardcover fiction titles ( [14], 90-91, 96, [40], [39][40][41][42]. Star power of an author can be present for two reasons. ...
... Visible in nearly every ad, prominently placed as a sticker on the book cover, and also mentioned verbatim in the TV commercial is Rossmann's status as a 'Spiegel bestselling author'. This leads us to the "star power" of an author which represents an important driver of sales success for hardcover fiction titles ( [14], 90-91, 96, [40], [39][40][41][42]. Star power of an author can be present for two reasons. ...
... The high media presence of Dirk Rossmann (and his new book) will have provided an additional important information and promotion effect for Der neunte Arm des Oktopus among potential book buyers. Another form of promotion activity that can be crucial for the first release of a book and positively influences their sales, are professional reviews on TV (see, e.g., [20] or [40]). Reviews such as Denis Scheck's on his own TV show "Hot off the press" (transl. of "Druckfrisch") will have further pushed the book's popularity and, therefore, sales (particularly if it has not only an 'information effect' but also a 'persuasion effect' on viewers). ...
Article
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This paper considers the success of the thriller Der neunte Arm des Oktopus (transl.: The Ninth Arm of the Octopus, Cologne: Bastei Lübbe, November 2020) by German drugstore magnate Dirk Rossmann. Certain elements of brand-name authorship are applicable here, but the market power of Rossmann goes far beyond name recognition. Beyond the typical marketing for a ‘big book’ in the sense of contemporary trade publishing, Rossmann flooded the campaign with his own funds. This contribution approaches an unlikely case study through a trilateral interdisciplinary perspective (book studies, economics, law), underlining the unequal footing on which books enter the market.
... While, for example, Wübben and Wangenheim (2008) highlight the simple application of heuristics and show that it delivers more accurate predictions, Ainslie, Drèze, and Zufryden (2005) achieve better predictions for movies with the support of quantitative models. The prior research in the book industry has focused on the drivers of commercial success (Schmidt-Stölting, Blömeke, & Clement, 2011) and on timing and pricing decisions (Burmester, Eggers, Clement, & Prostka, 2016). However, sales response models have not been tested with respect to their prediction performance; consequently, the managerial relevance remains limited. ...
... We categorize the constructs from the firm activities and consumer reactions to be product-, price-, distribution-, or award-related. The inclusion of variables from the empirical research in the book industry by Caliendo, Clement, and Shehu (2015), Clement, Proppe, and Rott (2007), Clerides (2002), Hofmann-Stölting et al. (2017), andSchmidt-Stölting et al. (2011) facilitates the comparison of our results with the published findings. Moreover, we consider suggestions from the managers whom we interviewed to identify potential blind spots. ...
... This approach follows from the intuition that prior success generates satisfaction with consumers, which in turn increases the purchasing probability of later publications (e.g. Schmidt-Stölting et al., 2011). We operationalize author power as the mean total sales of the last three books by the respective author. ...
Article
Estimating the demand of books is an important business-planning task for publishing companies. This study identifies, quantifies, and generalizes the sales drivers of children’s and young adult literature books and investigates whether quantitative prediction models improve prerelease sales predictions. We compare the model-based predictions with prerelease management sales predictions of a subsample provided by a large German publisher. Based on a sample of 542 titles that were published in Germany, we examine (a) the relevant drivers (elasticities) for economic success and (b) analyze the prediction performance of the models using two specifications of multiplicative market response models for this highly relevant market. The quantitative model approach outperforms management heuristics, reducing the prediction error by up to 45%. We further highlight the practical feasibility of simple market response models.
... В такой ситуации розничные сети заинтересованы в том, чтобы иметь представление о структуре спроса на разные книги и выстраивать эффективную ассортиментную и рекламную политику. Однако опираться на результаты опубликованных зарубежных работ, посвященных исследованию книжного рынка других стран (см., напр.: [Canoy, Van Ours, Van der Ploeg, 2006;Clerides, 2002;Schmidt-Stölting, Blömeke, Clement, 2011]), и предлагать на их основе рекомендации российским книжным сетям не представляется возможным в силу больших межстрановых различий в предпочтениях потребителей относительно того, какие книги покупать. Отсюда вытекает необходимость изучения российского книжного рынка. ...
... Среди «физических» факторов, определяющих спрос на книги, выделяются: а) тип обложки (мягкая, твердая); б) количество страниц [Clerides, 2002;Barrot et al., 2015]; в) дизайн обложки [D' Astous, Colbert, Mbarek, 2006;Bowers, 2015]. В исследованиях [Clerides, 2002;Schmidt-Stölting, Blömeke, Clement, 2011;Barrot et al., 2015] от-мечается, что покупатели приобретают книги в мягкой и твердой обложке для разных целей. Поэтому спрос на книги в разных обложках изучался по отдельности. ...
... Обычно одним из сигналов качества товара служит его цена, однако для культурных благ это не так. В соответствии с классификацией, представленной в работе [Karpic, 2010], в книжной индустрии к сигналам качества можно отнести, во-первых, репутацию авторов и издательств [D' Astous, Colbert, Mbarek, 2006;Schmidt-Stölting, Blömeke, Clement, 2011;Barrot et al., 2015]; во-вторых, экспертные оценки книг, в том числе литературные премии [Ashworth, Heyndels, Werck, 2010;Schmidt-Stölting, Blömeke, Clement, 2011;Barrot et al., 2015]; в-третьих, общественное мнение, которое может быть отражено с помощью листа бестселлера [Sorrenson, 2007] и рейтинговсреднего числа звезд книги. Рейтинги книг на веб-сайтах влияют как на магазинные, так и на онлайн-продажи. ...
... This research is important considering that not much has been done in addressing the critical success factor of books and how people choose them (Schmidt-Stölting et al., 2011;d'Astous et al., 2006). The few studies that do exist do not focus on the real factors that influence the purchasing of fiction books, nor do they discuss management measures and marketing strategies capable of developing mechanisms inherent to the commercial dynamics of the book business. ...
... After the modifications, sales went up to 21 books after 3 days (The Book Design House, n.d.). The cover and the title are even more important features in the case of impulsive buying (Schmidt-Stölting et al., 2011). Book titles should arouse emotion, along with the cover art of the book in order to attract consumers (Eisler, 2005). ...
... One of the main aims of this study was to identify the key factors that influence the purchase of fiction books and examine if these factors differ when the book is for personal use or for gift giving. This research is important considering that not much has been done in addressing the critical success factor of books and how people choose them (Schmidt-Stölting et. al., 2011;d'Astous et al., 2006). ...
Research addressing the critical success factor of books and how people choose them is scarce. This study examines the factors that influence consumers when purchasing fictional books and explores whether there are differences between purchasing books for personal use or as gifts. Furthermore, it also studies impulsiveness regarding the purchase. A quantitative empirical analysis was conducted based on 487 valid responses obtained through an online questionnaire. The results of this study show that approximately one third of books are purchased as gifts, women buy and read more books than men and higher educated and older consumers tend to read and buy more books. The purchase is less impulsive when the book is a gift and women are more impulsive, when buying for themselves. In the decision-making process, the features most valued in a book are: the "Title”, "Synopsis”, “Subject covered in book”, “Recommendation of family and friends” and “Books with discount/on sale”. Twenty-four items were considered based on these features and the same factor structure was found for both buying books for personal use and as gifts. Consumers tend to value more the “Recommendation of family and friends” when buying a book for themselves rather than as a gift. However, “Author and book recognition” is more important to the consumer when the book is purchased as a gift. The findings of this study provide important insights regarding consumer preferences, which will be useful for marketers to define strategies. Moreover, by comparing the factors that influence people to buy books for themselves as opposed to buying them as gifts, bookstores can strive to satisfy consumer demands, by conceiving and implementing new ideas in order to increase their book sales.
... Within the same media type, a comparison of studies shows that success factors are contextsensitive-the same factor influences success in one context and fails to do so in another, as is shown for print products (Sommer & Krebs, 2015) and books (Schmidt-Stölting et al., (2011). Even more so, the absence of particular factors can be shown to influence success. ...
... The integrated and confirmed factors are qualities of the staff involved in the media product brand. They are competence, motivation, experience and reputation, in addition to coherence of the team and team-internal brand workings (Basuroy, Chatterjee, & Ravid, 2003;Clement, Proppe, & Rott, 2007;Desai & Basuroy, 2005;Elberse, 2007;Elliott & Simmons, 2008;Henkel & Huber, 2005; Schmidt-Stölting, Blömeke, & Clement, 2011;Simonton, 2009). ...
... Henkel and Huber (2005) find stardom and prominence driving success in media. For books, Clement et al. (2007) and Schmidt-Stölting et al. (2011) see bestselling authors and competence of staff as success factor. Basuroy et al. (2003), Desai and Basuroy (2005), Elberse (2007), Elliott and Simmons (2008), and Simonton (2009) discuss among others the relevance of stars for the box office revenue of films. ...
Article
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In a literature review and an explorative pre-study ten building blocks of audience success of media product brands were distilled, and confirmed, respectively. The causally remote conditions (building blocks of success) are organizational facets, human resources, leadership, internal processes, environmental orientation, and external evaluation. Causally proximate are the conditions form, content, marketing and distribution. The research questions of this paper are: which conditions are necessary, and which (combinations of) conditions are sufficient for audience success? An online survey of 255 media decision makers in DACH countries was carried out, to assess a) to which extent the factors (items) belonging to the building blocks of success (concepts) were achieved, and b) to which extent success was achieved by the media product brand the respondents are involved with. A two-step fsQCA with ‘Enhanced Standard Analysis’ was deployed to find necessary and sufficient building blocks of audience success. Four conditions were qualified as necessary for audience success: form, distribution, human resources and environmental orientation. In addition, four sufficient combinations of building blocks for success emerged in the analysis. Published December 2017 on Compasss.org, WP Series
... A media product can thus benefit from staff suiting the product brand. HR decisions for a media product concerning the (production of) content influence success (Basuroy, Chatterjee, & Ravid, 2003;Clement, Proppe, & Rott, 2007;Desai & Basuroy, 2005;Elberse, 2007;Elliott & Simmons, 2008;Henkel & Huber, 2005;Schmidt-Stölting, Blömeke, & Clement, 2011;Simonton, 2009). ...
... Different success factors have been found for daily and weekly newspapers: for the former, it is constructive to accentuate reader orientation and responsiveness to competition; for the latter, it is not (Sommer & von Rimscha, 2013). Schmidt-Stölting et al. (2011) state that marketing cues like writer, topic, publishing house, and book cover show different effects on success when comparing paperbacks and hardcover books. It follows, that media success has to be regarded as a complexly causal phenomenon: success factors are context-dependent, influence each other, combinations can be equifinal, and factors can be asymmetric. ...
... Henkel and Huber (2005) see stars (or prominent people) as success drivers across the media industry. Clement et al. (2007) and Schmidt-Stölting et al. (2011) point to star authors and high-quality staff regarding books. ...
Article
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Research on media success factors is a fragmented field. Definitions, measures, and methods vary, and findings are often inconsistent. In an attempt to fill this perceived research gap, we distilled generic success factors of media products from the literature. Guided by theory and empirical findings, these factors were aggregated to complex concepts, building blocks of success that we further investigated in an exploratory qualitative study. We found that the building blocks are applicable to all types of media, independent of seriality and content types of media products. Subsequently the research question of this article is: Which building blocks of success are most important for media products? To answer this question, we conducted an online survey of 255 media professionals in print, audio-visual, and online media in Austria, Germany and Switzerland. To analyze our data, we deployed qualitative comparative analysis, a method based on set theory that is suitable to investigate complex causality. We conclude that four building blocks are necessary for success: “good” distribution, environmental orientation, form/design, and human resources are preconditions for achieving success in terms of audience market share. In addition, three patterns emerge in the sufficient paths (combinations of building blocks) to success. Which route to success a media product shows can be related to the width of its topical scope and the corresponding projected audience size.
... The actual number of copies sold is rarely known, as publishing houses shy away from making their numbers official. Accordingly, it is not surprising that there are only a handful of studies, which were based on the number of sold copies (Beck, 2006;Clerides, 2002;Form, 2017;Schmidt-Stölting, Blömeke, & Clement, 2011;Sorensen, 2007). ...
... Using published bestseller lists, as an alternative indicator, has the disadvantage that they offer only relative rankings. This does not reflect the substantial disparity in the success of books, that is, success of books is right-skewed (Schmidt-Stölting et al., 2011), like the fame of poets (Martindale, 1995). Furthermore, the criteria for inclusion on such lists are sometimes surprisingly arbitrary, leading, for example, to the exclusion of the Harry Potter series from the Publishers Weekly list. ...
... This approach was justified as this differentiation made it possible to determine that different factors lead to either popularity or critical acclaim (Simonton, 2005). Although critical acclaim had a positive effect on the economic success of movies (Plucker, Holden, & Neustadter, 2008;Simonton, 2009a) [which is another parallel to the domain of books (Clement, Proppe, & Sambeth, 2006;Keuschnigg, 2012;Schmidt-Stölting et al., 2011)], success was even negatively correlated with critical acclaim (Simonton, 2005). ...
Article
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Researchers that wish to evaluate the aesthetic success or functional creativity of books in the real world need a method to measure the outcome variable. However, sales figures are rarely published. Bestseller lists and expert judgments may not adequately reflect the aesthetic success in the general public. Data available on the platform Goodreads may serve as an alternative for measuring the popularity of books. In the present study, the ratings and number of ratings from Goodreads, as well as the number of literary prizes awarded are compared with the actual number of copies sold for a significant sample, the 98 most bestselling books in the UK from 1998 to 2012. Results indicated that literary prizes can not serve as a gauge for the popularity of a book. While ratings were associated with copies sold, the number of ratings was a significantly better indicator of the sales figures of a book.
... They instead assumed that bestsellers were "made" by literary critics, publishers, media, conformity and other social influences. Nevertheless, an elaborated model examining over 15 external variables potentially influencing book sales could only explain less than 40% of variance (Schmidt-Stölting, Blömeke, & Clement, 2011). In comparison, the present model explains comparatively much variance with fewer variables. ...
... The same principle of intensifying differences could also apply to other social influences like recommendations by other readers, which are known to increase knowledge of a book and finally buying decisions (Kamphuis, 1991;Schmidt-Stölting et al., 2011). Opinion leaders like critics, however, are a more critical point as their influence could have biased the present results. ...
... But their influence does not seem to be that big after all. Only 5% of a sample of 603 hardcover books from the top 50 bestseller lists had been discussed in advance by critics (Schmidt-Stölting et al., 2011). The most popular was not a critics' favorite: The Shell Seekers by Pilcher. ...
Article
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The judgment and ultimately the success of creative products should be determined by their properties. However, it has not been considered so far whether the same applies to books. Earlier research has found an inverted u-relationship between originality of stimuli and their success. Linguistic originality as a text feature could influence the success of books as creative products in a natural experiment. The present historiometric study investigated whether originality predicts the popularity in a significant sample, the most best-selling English books from 200 years. Originality was calculated based on word frequency using a commercial service. Popularity was assessed with a composite measure including indicators like the number of sold copies. Regression analysis indicated originality had a direct linear effect on popularity, partially moderated by the time of first publishing. That is, while originality was generally beneficial for the success of a bestseller, the same originality was more appreciated at a later point in time. This is the first quantitative study supporting the long-held assumption that the evaluation of creative narratives is influenced by temporal context. The fact that some works like The Great Gatsby got more appreciation when they were re-discovered may reflect a general principle rather than mere exceptions.
... D'Astous et al. [7] find that the reputations of authors and the attractiveness of book covers positively impact book sales. Schmidt-Stölting et al. [17] estimate demand for fiction books released in both hardcover and paperback, and report the factors affecting their demand. ...
... Schmidt-Stölting et al. [17] estimate the demand functions of novels released in both hardcover and paperback with the same title. However, hardcovers with low sales might not be followed by paperback editions from the viewpoint of profitability, and thus, their estimation might have potential bias, as Schmidt-Stölting et al. [17] recognize. ...
... Schmidt-Stölting et al. [17] estimate the demand functions of novels released in both hardcover and paperback with the same title. However, hardcovers with low sales might not be followed by paperback editions from the viewpoint of profitability, and thus, their estimation might have potential bias, as Schmidt-Stölting et al. [17] recognize. Furthermore, in Japan, many novels recently have been released in pocket-sized paperback format without B6-sized books. ...
Article
Full-text available
The present study estimates demand functions for novels released as books and pocket-sized paperbacks to examine factors affecting demand by format. The results show that the effects on the number of copies sold of an author’s celebrity, tie-in with a movie or television program, and literary awards differ statistically between the two formats. In addition, the findings show that demand for book and pocket-sized paperback novels is price elastic, imply that there is room for reviewing the Japanese fixed-price system. Furthermore, electronic publishing reduces printed novel sales, although the ratio of novels accessible as e-books to printed novels is relatively low in Japan.
... Although book success analysis remains of interest to many researchers [9,16], there is still little systematic research involving Portuguese-language literature. As Portuguese has its own literary peculiarities, the evaluation of specific data is of fundamental importance for literature in Brazil. ...
... Book success may be defined from different viewpoints, including official bestseller lists [16], the number of online reviews [2], download counts [1] and representative sales data [9]. Such diversity is a result of the success' subjective and abstract nature. ...
Conference Paper
Analyzing the success of books is a matter of interest among publishers, professional book reviewers, expert writers, and even curious readers. Such a task has many influencing factors concerning the intrinsic content and quality of the book (e.g., interest, novelty, writing style, and engaging plot) and others regarding external factors such as social context, author relationships, and luck for publication. Faced with so many variables, recognizing a successful literary work is a challenging endeavor even for specialists in the publishing market. Our objective is: to explore a dataset of books in the Portuguese language created to obtain more knowledge about the different variables of success in the literary context; to understand and evaluate the metrics collected that indicate new perceptions about books using graphical views.
... In addition, success is supported by genres and topics already established, as sequels illustrate (Chang & Ki, 2005;Elliott & Simmons, 2008;Hennig-Thurau, Houston, & Heitjans, 2009;Joshi & Mao, 2012;Simonton, 2009). Star power, that is, the celebrity of actors or authors, also has a positive impact (Basuroy, Chatterjee, & Ravid, 2003;Clement, Proppe, & Rott, 2007;Desai & Basuroy, 2005;Elberse, 2007;Elliott & Simmons, 2008;Schmidt-Stölting, Blömeke, & Clement, 2011;Simonton, 2009). Unsurprisingly, exclusivity is particularly important. ...
... Distribution: By whom, how, and where the content is distributed influences success in the media (Blömeke et al., 2007;Boatwright et al., 2007;Chang & Ki, 2005;Feddersen & Rott, 2011;Hennig-Thurau et al., 2012;Lampel & Shamsie, 2000;Liu, 2006;Meiseberg & Ehrmann, 2008;Simonton, 2009). Getting the timing and (sequential) release date correct is also crucial (Frank, 1994;Hennig-Thurau, Henning, Sattler, Eggers, & Houston, 2007; Success factors of media product brands 7 Schmidt-Stölting et al., 2011;Shamsie et al., 2006;Tschörtner, 2008). In recent times, multiand cross-media distribution is ascribed a growing influence on success (Habann, 2010;Wolf, 2006). ...
Article
Full-text available
Media companies and their managers have to develop and adapt products and services as well as processes and business models to exploit opportunities in the digital era. In doing so, knowledge of success factors is crucial. Success factor research in the media is a fairly broad and fragmented field. Studies till date have focused on single types of media; however, this technology-based distinction is no longer valid. It has been shown that products and services converge as well as their development and production processes. Therefore, the present study aims to synthesize the findings from different media contexts. On the basis of a comprehensive literature review and semi-structured, in-depth interviews with media professionals from Austria, Germany and Switzerland, ten building blocks of media success are suggested: content, design, environmental orientation, internal processes, organizational aspects, leadership, human resources, marketing, distribution, and external evaluation. The findings support the transferability of success factors on an abstract level and their adaptability for different contexts. They function as hygiene factors representing industry standards and constraints to failure. This study concludes with presenting the implications for media management research and media practice.
... In addition, success is supported by genres and topics already established, as sequels illustrate (Chang & Ki, 2005;Elliott & Simmons, 2008;Hennig-Thurau, Houston, & Heitjans, 2009;Joshi & Mao, 2012;Simonton, 2009). Star power, that is, the celebrity of actors or authors, also has a positive impact (Basuroy, Chatterjee, & Ravid, 2003;Clement, Proppe, & Rott, 2007;Desai & Basuroy, 2005;Elberse, 2007;Elliott & Simmons, 2008;Schmidt-Stölting, Blömeke, & Clement, 2011;Simonton, 2009). Unsurprisingly, exclusivity is particularly important. ...
... Distribution: By whom, how, and where the content is distributed influences success in the media (Blömeke et al., 2007;Boatwright et al., 2007;Chang & Ki, 2005;Feddersen & Rott, 2011;Hennig-Thurau et al., 2012;Lampel & Shamsie, 2000;Liu, 2006;Meiseberg & Ehrmann, 2008;Simonton, 2009). Getting the timing and (sequential) release date correct is also crucial (Frank, 1994;Hennig-Thurau, Henning, Sattler, Eggers, & Houston, 2007; Success factors of media product brands 7 Schmidt-Stölting et al., 2011;Shamsie et al., 2006;Tschörtner, 2008). In recent times, multiand cross-media distribution is ascribed a growing influence on success (Habann, 2010;Wolf, 2006). ...
... However, these two types of books have fundamentally different properties, and their sales are highly interrelated. As noted above, the success of the hardcover edition has long-term spillover effects on the paperback's success (Schmidt-Stölting et al. (2011)). Consequently, pricing both book types requires special managerial attention from publishers to cater to consumers' adoption patterns that are specific to hedonic goods. ...
... Our data cover the German book market with titles published in the years 2003-2005. We rely on an extended data set used by Shehu, Prostka, Schmidt-Stölting, Clement, and Blömeke (2013), Schmidt-Stölting et al. (2011), andClement, Hille, Lucke, Schmidt-Stölting, andSambeth (2008). Because of the large number of new releases (more than 80,000 initial releases per year, Börsenverein (2012)), we restrict our data collection to a sample of books. ...
Article
Book pricing is problematic for two main reasons. First, because legal restrictions make pricing decisions irreversible. Second, because publishers must set prices for many books every year. Therefore, a sound knowledge of consumer reaction to price is essential for good pricing decisions. Our research examines consumer reactions to prices, provides price elasticities based on a large sample of fiction books, and creates a comprehensive set of quality measures and control variables. Our results show that once price endogeneity is considered, consumers are price elastic. Moreover, we find that the price elasticity for hardcover books is substantially smaller than for paperbacks.
... The author suggests that the difference in price between the two formats cannot be attributed to solely to production costs, making this a case of quality discrimination. Schmidt-Stölting et al. (2011) investigate the different drivers of success for German editions of hardback and paperback books using seemingly unrelated regressions. Genre, author popularity and film adaptations are found to be significant indicators of success for both formats, while hardback sales benefit from a shorter release time between its paperback equivalent. ...
Chapter
This paper uses a market segmentation approach to examine the effects of digital disruption in the book industry. A Bayesian efficient experimental design is employed in order to develop a stated preference discrete choice experiment that incorporates an array of book formats and attributes. The experiment was conducted on a panel of Australian readers. The results were analysed using a latent class model, leading to the identification of three distinct classes of book readers. The largest class of readers is comprised of ‘technological adopters’ who demonstrate a similar willingness to read on both traditional printed book formats and newer digital ones. Members of this class rely on critical review scores to make purchasing decisions and are the youngest of the three classes. Second is a class of ‘popular readers.’ This group consists of price-sensitive readers who clearly favour reading popular fiction on traditional paper-based book formats only. The third group are ‘avid readers’ who exhibit the highest willingness to pay for books and show a desire to read books of all genres. The identification of discrete segments of readers, along with their associated price elasticities and willingness to pay figures, can assist book industry stakeholders (such as book publishers and sellers) with the development of effective strategies to guide them through the various stages of digital book formats technology adoption life cycle. Such results can also be used to help steer cultural policy makers during a period of rapid technological change and uncertainty.
... Some because they simply take for granted that success is necessarily measured in terms of revenue or profit (e.g. Chang & Chan-Olmsted, 2010;Schmidt-Stölting, Blömeke, & Clement, 2011), others, because it is notoriously hard to reliably measure success in terms of creative, artistic or societal value (for a discusson see also von Rimscha, . For instance, the nomination of a film for a certain award is often but a weak proxy for non-monetary measures of success. ...
... The articles focused on the mechanics of publishing industry frame the book as a product, rather than a cultural artifact, subject to theoretical or aesthetic reflection. Authors prioritized marketing issues: brand phenomenona such as Harry Potter (Brown & Patterson, 2010), purchase habits of individual and institutional consumers (e.g., academic libraries), the methods of sales measurement (Andrews & Napoli, 2006;Gallagher & Bohme, 2009), market, and the influence of various factors on sales: the form and formats of the book (Asai, 2015;Li et al., 2015;Schmidt-Stölting et al., 2011), its type (literary and popular fiction), genre, price, and distribution model (wholesale model or agency model), the time it entered the circulation, sales channels, presence on the bestseller lists (Feather & Woodbridge, 2007;Sorensen, 2007), publicity (Zhang, 2008), the type of contract signed by the author (royalty or buy out arrangements) (Hao & Fan, 2014), library loans (Burleigh, 2017). The researchers also tested the reality of the long-tail effect phenomenon, referring to the indicators of presence in media (Peltier et al., 2016). ...
Article
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Purpose/Thesis: The article characterizes the research on the global book publishing market to determine the extent of its interdisciplinarity. Approach/Methods: This article uses quantitative and qualitative analysis of selected academic pa­pers, discipline profiles of their authors and of the journals to investigate which subject area dominate in scientific output of researchers and to establish the relationship between publishing studies and other disciplines on the field of the global book market. In order to prove the relatedness of journals bibliometric methods (co-citation, bibliographic coupling analysis of sources) and knowledge visu­alization technologies will be used. Results and conclusions: The selected papers focused on book history and book culture, economics and technological aspects of book publishing, and users’ attitudes and preferences. The authors published in journals associated with disciplines such as media & communication studies and edu­cation (Publishing Research Quarterly, Journal of Scholarly Publishing, Learned Publishing), book studies (Logos) and information studies (Electronic Library, Journal of Documentation). In Corpus 1 (C1) there were co-cited trade magazines and academic journals on library and information science, in Corpus 2 (C2) – academic journals mostly focused on marketing and economics. Co-authored publications constituted 42% of C1 and 63% of C2. The study showed that the research of the global book publishing market is led by interdisciplinary researchers, but rarely by international teams. Research limitations: The initial corpus of academic papers was narrowed down to 230 articles published in English between 2001 and 2018. The study did not include articles focusing on book markets in the countries that make only slight contributions to the global book publishing industry. The discipline classification adopted in the study follow that of the Scopus database. Originality/Value: This study provides insight into the research on the global publishing market and proves that it is interdisciplinary.
... Several researchers have recently studied the factors impacting the success of books by focusing on the role of writing styles, book reviews, ads, and even social networks [15]. More recently, researchers have employed multi-factor analysis, like a simple linear model centered around book sales in the German market with limited accuracy [20]. A computational intelligence approach was applied by Castillo et al. to predict sales of books in an editorial management environment [6]. ...
... However, predicting book success from multiple factors has received much less attention. The only published study in this area focused on book sales in the German market, applying a linear model [9] and reported limited accuracy. ...
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Abstract Reading remains a preferred leisure activity fueling an exceptionally competitive publishing market: among more than three million books published each year, only a tiny fraction are read widely. It is largely unpredictable, however, which book will that be, and how many copies it will sell. Here we aim to unveil the features that affect the success of books by predicting a book’s sales prior to its publication. We do so by employing the Learning to Place machine learning approach, that can predicts sales for both fiction and nonfiction books as well as explaining the predictions by comparing and contrasting each book with similar ones. We analyze features contributing to the success of a book by feature importance analysis, finding that a strong driving factor of book sales across all genres is the publishing house. We also uncover differences between genres: for thrillers and mystery, the publishing history of an author (as measured by previous book sales) is highly important, while in literary fiction and religion, the author’s visibility plays a more central role. These observations provide insights into the driving forces behind success within the current publishing industry, as well as how individuals choose what books to read.
... The author suggests that the difference in price between the two formats cannot be attributed to solely to production costs, making this a case of quality discrimination. Schmidt-Stölting et al. (2011) investigate the different drivers of success for German editions of hardback and paperback books using seemingly unrelated regressions. Genre, author popularity and film adaptations are found to be significant indicators of success for both formats, while hardback sales benefit from a shorter release time between its paperback equivalent. ...
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This paper uses a market segmentation approach to examine the effects of digital disruption in the book industry. A Bayesian efficient experimental design is employed in order to develop a stated preference discrete choice experiment that incorporates an array of book formats and attributes. The experiment was conducted on a panel of Australian readers. The results were analysed using a latent class model, leading to the identification of three distinct classes of book readers. The largest class of readers is comprised of ‘technological adopters’ who demonstrate a similar willingness to read on both traditional printed book formats and newer digital ones. Members of this class rely on critical review scores to make purchasing decisions and are the youngest of the three classes. Second is a class of ‘popular readers.’ This group consists of price-sensitive readers who clearly favour reading popular fiction on traditional paper-based book formats only. The third group are ‘avid readers’ who exhibit the highest willingness to pay for books and show a desire to read books of all genres. The identification of discrete segments of readers, along with their associated price elasticities and willingness to pay figures, can assist book industry stakeholders (such as book publishers and sellers) with the development of effective strategies to guide them through the various stages of digital book formats technology adoption life cycle. Such results can also be used to help steer cultural policy makers during a period of rapid technological change and uncertainty.
... As in Germany the aver-Form, S., Aue, J., Kaernbach Ch. Judging Popular Novels as Creative Products: ... age retail price is about 20€ for hardcover books and 9€ for paperbacks (Schmidt-Stölting et al., 2011), this is a relatively high price. It was chosen to reduce expected ceiling effects in recommendations especially in the case of the Harry Potter novel. ...
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The purpose of the present study was threefold. First, to explore whether a German version of the Creative Product Semantic Scale can be applied to novels, a hitherto poorly investigated creative product. Second, to determine which of the emerging attributes might affect the potential for success of a novel. Third, to check whether the novels judged are distinguishable in terms of their creative attributes. In an online study, participants judged four popular novels from recollection: Harry Potter and the Philosopher’s Stone , The Hobbit , Twilight , and Inkheart . A factor analysis of items based on the Harry Potter subsample indicated four major dimensions: Resolution, Novelty, Style and Complexity. Among the dimensions, Resolution was the only dimension predicting potential for commercial success in a multiple regression. Novels were not distinguishable on the basis of the dimensions judged, indicating that the present CPSS did not have enough discriminatory power to detect differences among novels from the same genre. Additional measures indicated judgments had been relatively stable since the reading experience. Furthermore, a large proportion of participants was presumably biased in their memory, due to having watched the respective movie adaptation. This was suggested by a false memory check. Surprisingly however, there were no detectable differences in judgment between those who passed and those who failed the false memory check.
... Leurs résultats indiquent que les ventes d'un titre augmentent de 62% la semaine suivante si ce dernier a fait l'objet d'une critique positive dans le New York Times, mais elles augmententégalement lorsque la critique est négative (à hauteur de 34%), bénéficiant d'une meilleure visibilité. Enfin, certainesétudes empiriques se sont intéresséesà l'impact de la publicité (Shehu et al., 2014), des moyens marketing mis en oeuvre (Schmidt-Stölting et al., 2011) ou encore du bouche-à-oreille (Beck, 2012 ;Beck, 2007) sur la demande de livres. Autrement, Chevalier et Mayzlin (2006) ontétudié,à partir de données collectées sur le site internet d'Amazon et de Barne and Nobles, l'impact des ratings fournis volontairement par les internautes. ...
Thesis
Structurée autour de trois chapitres, cette thèse contribue à enrichir la perception et la compréhension des modes de consommation et des modes d'accès au livre a l'ère numérique. Nous abordons trois principales questions que sont les effets de longue traîne dans la demande de livres, la substituabilité e entre les modes d'accès au livre et l'articulation des prix des livres papier et numériques. Notre démarche est de considérer la multiplicité du marché e du livre, en tenant compte de sa sphère marchande et non marchande, et de la dualité de format du livre, papier et numérique. Nous avons dans un premier chapitre analysé la distribution des emprunts en bibliothèques publiques et étudié de la sorte des modes de consommation différents du star système. Pour expliquer cette diversité consommée en bibliothèques, le deuxième chapitre questionne l'articulation des modes d'accès au livre. Nos résultats montrent une complémentarité des pratiques d'emprunt et d'achat de livres et une indépendance des pratiques de téléchargement de livres numériques. La question du prix des livres numériques pouvant en partie expliquer cette indépendance, le troisième chapitre analyse la tarification des livres numériques. Nous avons montré qu'elle se structure principalement en miroir des prix des livres papier. Notre analyse se fonde sur trois bases de données originales, a savoir : les emprunts de fiction en bibliothèques parisiennes réalisés entre janvier et avril 2012 ; une large enquête réalisée auprès des usagers des bibliothèques parisiennes en 2014 ; et une étude des prix des meilleures ventes de 2011 de livres numériques en France et aux Etats-Unis. A partir de ces données empiriques, ce travail de recherche montre des modes de consommation et une offre du marché du livre papier et numérique qui s'articulent davantage qu'ils ne s'opposent.
... Last, our findings add to the research on media products. Extant research has analyzed the effects of firm-and consumerinduced communication, as well as other success drivers such as star power, in the context of movies (Hofmann, Clement, Völckner, & Hennig-Thurau, 2017), video games ( Burmester et al., 2015) or books (Schmidt-Stölting, Blömeke, & Clement, 2011). We add to this body of research by providing insights from the field of news consumption. ...
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The news industry is being massively disrupted by the digital distribution of news. Consequently, publishers have revised their business models and integrated pay-per-article options. To reduce pre-purchase uncertainty, consumers can use information from firm-induced (e.g., newsletters), or consumer-induced communication (e.g., likes). These communication activities avoid purchases with poor fit but also increase customer expectations. Consequently, their effect on sales, returns, and profitability is unclear. For digital products, these effects are even less clear because product quality is difficult to evaluate pre-purchase, and products can be returned at almost no cost, even after consumption. In this study, we investigate the effects of firm- and consumer-induced communication on digital returns in the context of news articles on a major online platform (Blendle). We rely on a multi-equation model to quantify the effect of firm- and consumer-induced communication activities (i.e., newsletter promotions sent out by the platform and consumer likes from readers) on sales and returns and calculate their profitability impact. Our results show that newsletters decrease returns but do not significantly affect sales. In contrast, consumer likes have a twofold effect by increasing sales and decreasing returns. A simulation shows that both newsletters and likes increase profitability and that likes have a higher potential. Our results offer much needed guidance for online aggregators of digital products (e.g., audiobooks, e-books or news articles), as well as for online publishers based on pay-per-unit business models.
... For books, we relied on a dataset of fiction literature (first editions in German) titles from Media Control. The data covers all books released between Calendar Week 1 in 2003 and Calendar Week 52 in 2005 (see also Caliendo et al., 2015;Schmidt-Stölting, Blömeke, & Clement, 2011). We focused only on hardcover editions that were followed by a paperback version within the time period. ...
Article
Managers predict the sales of new entertainment products prior to their release using comparables, such as similar books from the same author or movies with the same actors. In this study, the authors analyze whether diffusion models for media products provide helpful support in the management task of predicting prelaunch sales of the first distribution channel for three different product categories. They compare the performance of predictions based on (a) simple success factor regressions (OLS) and (b) diffusion models against real management predictions. Based on samples covering the German music, film, and the literary market, we show that model-based forecasts outperform the forecasts of management teams for the majority of the products. In contrast, management is superior in forecasting top sellers. This is due to unobserved factors arising from more management attention attached towards super stars. The authors do not find substantial prediction differences between simple success factor regressions and more complex diffusion models. Thus, managers interested in total sales estimates can easily rely on OLS based success factor predictions. Advertising and product differentiation factors with respect to quality (e.g., star power, critics, or country of origin) are across all 3 industries highly relevant for sales predictions, whereas others variables (e.g., price, distribution power, season, or competition) differ across industries.
... These near impossible odds reflect the challenges of capturing an audience in today's highly competitive world. Consequently, the success drivers of books remains of interest to many researchers [2]. Some of these drivers were explored in the literature [3,4]: they are book critics [5], the author's and fans' circle of friends [6,7], celebrities [8], online reviews [9,10] and word of mouth [11]. ...
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Reading remains the preferred leisure activity for most individuals, continuing to offer a unique path to knowledge and learning. As such, books remain an important cultural product, consumed widely. Yet, while over 3 million books are published each year, very few are read widely and less than 500 make it to the New York Times bestseller lists. And once there, only a handful of authors can command the lists for more than a few weeks. Here we bring a big data approach to book success by investigating the properties and sales trajectories of bestsellers. We find that there are seasonal patterns to book sales with more books being sold during holidays, and even among bestsellers, fiction books sell more copies than nonfiction books. General fiction and biographies make the list more often than any other genre books, and the higher a book’s initial place in the rankings, the longer the book stays on the list as well. Looking at patterns characterizing authors, we find that fiction writers are more productive than nonfiction writers, commonly achieving bestseller status with multiple books. Additionally, there is no gender disparity among bestselling fiction authors but nonfiction, most bestsellers are written by male authors. Finally we find that there is a universal pattern to book sales. Using this universality we introduce a statistical model to explain the time evolution of sales. This model not only reproduces the entire sales trajectory of a book but also predicts the total number of copies it will sell in its lifetime, based on its early sales numbers. The analysis of the bestseller characteristics and the discovery of the universal nature of sales patterns with its driving forces are crucial for our understanding of the book industry, and more generally, of how we as a society interact with cultural products.
... Little academic attention has been devoted to the book publishing market, particularly the selection of book formats. Regarding the printed book format, Schmidt-Stölting et al. [9] estimate the demand functions for fiction books in hardcover and paperback editions in Germany and find that a short period of time between the release dates of the two formats drives success in the secondary distribution stage. Clerides [1] empirically investigates the determinants of whether a publisher releases hardcovers prior to releasing paperbacks, or releases hardcovers and paperbacks simultaneously. ...
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In Japan, comic plays a leading role in electronic publishing, whereas e-book sales generated from novels are small. This study investigates format choice, such as pocket-sized paperbacks and e-books for popular novels on bestseller lists in 2010. The results show that almost half of novels are not released as e-books and Japanese authors who already have strong sales performances are not positive about releasing e-books, whereas all foreign novels are released as e-books. One reason that electronic publishing other than comics has not developed in Japan may be that many novels written by popular authors are not provided as e-books.
... The findings preponderantly suggest that the use of celebrity endorsements can substantially enhance advertising effectiveness and financial success. A second major stream of literature addresses the effect of stars on the performance of entertainment products (e.g., De Vany & Walls, 2004;Hamlen, 1991;Schmidt-Stölting, Blömeke, & Clement, 2011). As summarized by Hennig-Thurau et al. (2013), the results of such studies predominantly attest to a positive relationship between star power and the success of entertainment products. ...
Article
The economic value of celebrity brands is heavily influenced by their ability to generate large-scale consumer interest. We develop a comprehensive framework for the drivers of celebrities' market popularity (in terms of consumer interest generated by celebrities) including variables related to actors, movies, and actor-movie fit. To test the framework, Internet search histories are examined for 161 film stars over the course of more than 6 years (January 2004-June 2010). In particular, we test three hypotheses. First, with regard to actor-related variables, we do not find support for the postulated inverted U-shaped effect from the frequency of movie appearances on the market popularity of film stars (H1). Rather, the results indicate a monotone and positive relationship between a film star's frequency of movie appearances and consumer interest in the film star. Second, with respect to movie-related factors, the findings indicate that both positive and negative abnormal movie revenues increase the popularity of film stars (H2). Third, concerning variables related to actor-movie fit, the results support the hypothesized U-shaped effect from actor-movie fit on the market popularity of film stars (H3). On a managerial level, this study provides insights for film stars on how to enhance their market popularity by increasing the frequency of their movie appearances and by selecting films that are likely to generate abnormal revenues and have a certain fit with their image.
... Im audiovisuellen Bereich sind es Produzent und Distributor (Clement 2004;Reinstein/Snyder 2005;Meiseberg/Ehrmann 2008). Der Projektcharakter wird durch die Ergebnisse zur Bedeutung des Markteintrittszeitpunkts bei Büchern und Filmen verdeutlicht (Blömeke et al. 2007;Schmidt-Stölting et al. 2011;Frank 1994;Krider/Weinberg 1998;Radas/Shugan 1998;Prasad et al. 2004;Hennig-Thurau et al. 2007). ...
... 1 In Germany, Schmidt-Stölting et al. (2011) found, likewise, that publishing a book in hardcover has a positive impact on sales of books in the genre of, for instance, biography, but not on sales of books in other genres. They conclude 'Thrillers are less likely to serve as symbols for consumers and are, therefore, more likely to be bought in paperback than novels.' (Schmidt-Stölting et al., 2011, p. 40). ...
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This article analyzes determinants of prices in the Dutch fiction book market between 1980 and 2009. It does so on the basis of interviews with editors of large publishing houses and regression analysis of a dataset that contains prices and their determinants of over 80 000 fiction books. We show that material properties such as the size, binding and number of pages of a book are the strongest predictors of price. This is surprising, because the actual paper and printing costs constitute only a small fraction of the sales price. Publishers, we argue, set prices as if material properties matter. The advantage of relying on these material properties is that publishers can manipulate them through their main pricing device, the profit and loss statement. Moreover, relying on materiality instead of quality when pricing goods allows publishers to create market order and to make their prices seem fair to consumers. In one respect, quality is factored into price as well: publishers use genre as a judgement device when setting prices. As a result, the dominant status hierarchy is reproduced through prices.
... Damit steht die Auseinandersetzung mit der Konkurrenzsituation (Clement 2004: 258;Shamsie et al. 2006: 132;Meiseberg/Ehrmann 2008;Kim 2009;Simonton 2009: 414) und die Laufzeit (Simonton 2009: 410) im Zusammenhang. Ähnliches gilt auch für den Buchmarkt (Blömeke et al. 2007;Schmidt-Stölting et al. 2011). Als Besonderheit kommt hinzu, dass entlang der Auswertungskette mehrere Veröffentlichungszeitpunkte koordiniert werden müssen (Frank 1994: 130;Hennig-Thurau et al. 2007). ...
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In Zeiten des Wandels und großer Unsicherheit ist es für Medienunternehmen von existenzieller Bedeutung, sich über die Erfolgsfaktoren ihrer Angebote im Klaren zu sein. Obschon eine Vielzahl an Studien zu Erfolgsfaktoren von unterschiedlichen Medien vorliegt, sind diese in ihrer Anlage meist so fokussiert oder selektiv, dass sie nur bedingt als handlungsleitend für das Medienmanagement gelten können. Der Beitrag liefert einen gattungsübergreifenden Literaturüberblick, diskutiert Möglichkeiten der Verallgemeinerung von Detailergebnissen und zeigt auf, wie die vorliegende Forschung noch besser nutzbar gemacht werden könnte.
... The results reveal several significant effects (see Table 3). As expected, and in line with prior research, for example, Schmidt-Stölting et al. (2011), variables such as the reputation of the author (''Critics,'' ''Celebrity,'' ''Fame,'' and ''Bestseller'') as well as a higher content quality (''Quality'') and distribution reach (''Publisher strength'') encourage the decision to advertise. The effect of a book's price on the probability of being advertised is positive, as publishers can set higher prices for books written by bestselling authors that are also selected for advertising. ...
Article
Driven by the pressure to permanently release a large number of books, publishers have to allocate limited advertising budgets across the wide range of newly released books. As in many creative industries, publishers often focus their advertising activities on potential top sellers written by recent bestselling authors. Considering potential selection effects in choosing the “right” books for advertising, this paper investigates (1) whether selection effects exist and to what extent potential selection effects influence the relation between book advertising and book sales and (2) the boundary conditions under which book advertising leads to higher sales by focusing on the “star power” effects of authors. By applying propensity score matching to a dataset of 598 fiction books from the German book market, we identify substantial selection effects that lead to a serious overestimation of advertising effectiveness by up to 41 % (10,000 copies sold). Using group analyses, we find that sales of books written by recent bestselling authors are not significantly influenced by advertising activities of publishers; however, the sales of books written by lesser-known authors can be increased significantly if they are advertised. Our findings are highly relevant for publishers, indicating that a shift in the allocation of advertising budgets toward promising books by lesser-known authors is recommended to improve the overall advertising effectiveness.
Article
Most stylistic analyses of literary texts begin with the text proper, largely ignoring the paratextual elements that precede it. The extent of this lacuna within stylistics is so great that a search through the back catalogue of Language and Literature, stylistics’ flagship journal, returns no results for contributions whose titles contain the terms ‘title’ or ‘paratext’. In what follows we underline the implications of this neglect through findings which point to the import of titles for readers’ interpretive processes. Drawing on our analysis of a 58-million-word corpus of book reviews from the online retailer Amazon.com, the research reported on here provides evidence for what many theorists have claimed but for which they have often provided no empirical support, namely, that titles contribute to the establishment of reader expectations about a text.
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Content Design is advocated as one of the key factors influencing consumers' attitude and buying behavior. However, its real effects on sales performance remain largely unknown. We propose a research framework to evaluate the effect of content design on sales and empirically test its employability within the German magazine retail sector. To develop the research framework , we first derive a set of related success factors from several literature streams. We then conduct a content analysis of over 500 magazine covers and relate this data to real-life retail sales figures via linear mixed model analysis to investigate which aspects of content design affect sales. The findings point toward the usefulness of our proposed framework. They further indicate that in hedonic media consumption, the colors purple and blue, text-image congruence, wording that leads to ease of cognitive processing and promotional activities are pivotal in sales.
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Previous studies found that linguistic features can be used to predict the success of novels. However, which specific linguistic features better contribute to a novel’s popularity is unclear. This study addressed this issue by investigating the linguistic features of 2,008 online Chinese fantasy novels with different popularity (indicated by the Baidu Index). Specifically, word part-of-speech, personal pronouns, word complexity, and local/overall sentence semantic coherence were analyzed using a word segmentation tool (Jieba) and a latent semantic analysis software (Chinese version of Coh-Metrix). Results showed significant differences between popular and non-popular (high and low popularity) novels in the distribution of parts-of-speech, use of the second person pronoun, word complexity, and sentence semantic coherence. Moreover, the presence of the second person pronoun (“you”), local sentence semantic coherence, auxiliary words, word complexity, overall sentence semantic coherence, and adjectives better predicted the popularity of a Chinese online fantasy novel. The theoretical background and the implications of these results are detailed in the study discussion.
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In 2019, after a decade of work, the Anthropocene Working Group of the International Commission on Stratigraphy voted to accept the Anthropocene as a new "slice" of the geological record, beginning around the mid-twentieth century and marked by the radiogenic signal left by nuclear weapons. Although there is considerable debate amongst researchers around the timing, labelling and ultimate outcomes of the Anthropocene, there is general agreement that the scale and nature of recent human activity has created fundamental shifts in the state and functioning of the Earth's system, including climate change, sea-level rise, ocean acidification, changes in the biosphere, habitat loss, and the proliferation and global dispersal of vast quantities of enduring new materials, notably plastics (Anthropocene Working Group 2019).Whe archaeological signature of such a shift is marked in part by the disposable objects of mass consumption that constitute the detritus of modern society - the garbage that first captured the attention of archaeologists such as Michael Schiffer (Gould and Schiffer 1981) and William Rathje (1979) in the 1970s and that continues to challenge us with its scale, ubiquity and consequences today. What we throw away and why, how we deal with it, and what this tells us about our lifestyles and the consequences of our waste for the future are fundamental concerns for understanding the effects of our own species on the planet.The entries in "Recycle(d)" derive from the 2020 iteration of the Flinders University archaeology topic, 'The Archaeology of Modern Society'. For their major assignment students are asked to choose an item of modern material culture, describe and interpret it, focusing on the seemingly innocuous artefacts of the everyday that infiltrate our lives. While the entries in "Recycle(d)" are in many ways similar to those in its predecessor volumes-and some, like the glass bottle and the pneumatic tyre, are directly connected-the over-riding concern in this book is with the ecological footprint of the modern world and the environmental consequences of the production, consumption and discard of these mass-produced objects.
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Technology has massively disrupted the news media, and the limited intention to pay for digital products is still an economic challenge. Other industries, such as film, politics, and sports, have heavily relied on human stars to increase success. Digitisation and the rise of social media have enabled formerly “hidden” journalists to engage in human branding. Against this backdrop, research has neglected the potential of frontline employees such as journalists to drive digital product success. While research has found that strategic brand management can foster human brands, this study is the first to investigate and empirically validate how star power and the exclusiveness of content affect behaviour intentions such as reading, sharing and paying intentions in the specific case of digital news media. The study is based on an online survey and includes an experiment (n=375), ANCOVA and regression analysis. The results suggest interaction effects of exclusiveness of content and star power on reading and sharing intention and an increasing influence of exclusiveness of content on paying intention. The results offer much needed guidance for media companies in searching for sustainable digital business success. Furthermore, this research provides a basis for implementing strategic human brand management in the news industry.
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High-achieving employees, the "stars" of an organization, are widely credited with producing indispensable, irreplaceable, value-enhancing contributions. From the recruitment of celebrity CEOs to the fierce competition for star scientists, and from lucrative contracts for sports icons to out-sized bonuses for top salespeople, human capital strategies have long promoted the importance of star performers. Sixty years of research on stars has witnessed a wide array of contexts, levels of analysis, and sub-dimensions, much of which is focused on the accomplishments of these alpha-tail individuals. More recently, however, scholars have begun to draw varied conclusions regarding both the favorable and unfavorable impacts of star performers, leading to a balkanization of the perspectives comprising the stream. Our review of the multidisciplinary work on stars synthesizes disparate studies, settles definitional problems, and integrates complementary factors into a coherent formative construct. Through this, we foster the development of a research agenda concerning the manner in which star performers are, by their very nature, simultaneously red giants and black holes, the precise balance of which is fertile soil for future inquiry.
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Content Design is advocated as one of the key factors influencing consumers' attitude and buying behaviour. However, its real effects on sales performance remain largely unknown. This study is one of the first empirical studies to evaluate content design quantitatively and inclusively using textual and pictoral information alike. We employ content analysis as well as OLS regression and analyse real-life transaction data from the German publishing industry to investigate which aspects of content design can increase sales. The findings point to a model that allows uniting the concepts of management and editorial design literature. The findings further indicate that in media consumption, especially the colours purple and blue, text-image congruence, wording that leads to ease of cognitive processing and promotional activities are pivotal in sales. Implications for marketing theory and design are discussed.
Conference Paper
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Finnish citizens are heavy users of public libraries. In 2017, the total number of loans per inhabitant from municipal libraries was 15.57. Most loans were books (12.17 per inhabitant) but also loans of visual and music recordings have been common. The municipal libraries constantly increase the stock of books, recordings and periodicals. The purpose of this study is to investigate the determinants of book loans from the Helmet (Helsinki region) public libraries. The top 100 novels in each quarter of the years 2014-2017 have been listed and used in this study. Since we have no data concerning the borrowers, the analysis is based on the book and its characteristics. The public library behaviour is modeled using Martin's (1993) idea. The model proposes that that we should observe a negative relationship between retail price and the number of loans of each book since the library would purchase less highly-prices books. The quality of the novel is not modeled but we have a reason to assume that author characteristics have an impact on borrowings. The model, especially the condition above is tested with Helmet (Helsinki area library) data. The estimation results show that the borrowing demand is price inelastic with approximately-0.1 price elasticity. The estimated value of the quarters is negative showing that the borrowings on average decline as time goes on.
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Weil sich Käufer in Buchmärkten wechselseitig beeinflussen, gilt die Entstehung von Bestsellern als schwer vorherzusagen. Dies resultiert in einer erheblichen Planungsunsicherheit im Verlagswesen. Vorgestellt wird ein Verfahren zur Prognose von Bucherfolg, welches die starke Pfadabhängigkeit von Verkaufszahlen in Kulturmärkten für belastbare Erfolgsvorhersagen nutzt. Die Methode ermöglicht eine frühzeitige Einschätzung des Marktpotenzials von Ersterscheinungen und erlaubt Verlagen eine datenbasierte Planung von Auflagenzahlen und Werbemaßnahmen.
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This study examines the cover designs of popular works of eco-dystopian speculative fiction, documenting how graphic designers and commercial illustrators have conceptualized the impact of human behaviors on the near-future environment. The sample includes one hundred and five covers for ten high-impact, mass-market novels written between 1962 and 2013. Coded for thematic similarities, the sample reveals visual strategies and narrative tropes that have recurred since the advent of contemporary eco-dystopian fiction in the 1960s. Yet evolving social and environmental conditions render the specific visual motifs more journalistic than anticipatory. Reconceptualizing eco-dystopia through the meta-language of design failure, however, can be a way to suggest both genre-specific continuity and emergent concerns. © 2018
Chapter
With digitalization having dramatically reshaped entertainment distribution, this chapter sheds light on three fundamental distribution-related issues that entertainment managers are dealing with today. Regarding the timing of a new product’s initial release, we show that descriptive statistics on the commercial potential of certain release periods are misleading, as they combine demand-sided influences with supply-sided effects caused by managers themselves. Furthermore, managers must thoroughly orchestrate the plethora of distribution channels that exist today. We introduce a framework of the macro- and micro-level factors that need to be considered when valuing alternative distribution models and report results from empirical scholarly experiments on sequential distribution. Finally, we study the piracy threat: its importance, its determinants, and the effectiveness of anti-piracy measures.
Chapter
Consumers have to decide whether to spend money or time for an entertainment product without knowing whether it is of high (experience) quality. They have to determine the quality of an experience product in advance using search qualities or “pseudo-search” ones—signals that help consumers to infer whether they will enjoy a product or not. We explore the signals that consumers use to aid in their search for which entertainment products to buy. In this chapter, we explore technology as a major search quality of entertainment, followed by a discussion of several signals, namely the product’s genre or theme, any age restrictions and the critical content that underlies them, and the country of origin.
Chapter
Entertainment firms communicate with consumers through some channels in which the firm can tightly control the message, both its content and delivery. “Paid” channels refer to traditional advertising in all of its forms; the firm crafts a message and then pays a channel for delivering that message to consumers. Key questions we address in this chapter include what messages to emphasize and how much to reveal of an exciting storyline, how much to spend, and when to advertise (pre- versus post-release). In today’s digital times, firms also communicate with consumers via “owned” channels such as websites, social media pages, as well as their products’ packaging. We argue that for managing such owned channels, a “pinball” approach to marketing is essential: the firm puts a message (like a pinball) into play, but the message is alive and is batted about by bumpers and spinners by consumers and traditional media. We discuss the main challenges for successfully playing pinball marketing for entertainment products.
Chapter
In addition to paid and owned communication, “earned” communications channels are essential for success in entertainment. We analyze the role of word of mouth and distinguish between three types of such consumer communication: traditional, social media, and other electronic word of mouth, which are more than substitutes for each other when it comes to influencing an entertainment product’s performance. While word of mouth triggers “informed cascades” of information, we show that uninformed information cascades can also be quite influential. We discuss high chart rankings and pre-release buzz as powerful signals, both of which drive the success of new entertainment products, though at different points in time. We further portray automated recommender systems that process information about consumers’ liking of certain products into an information source that is considered to be valuable by others. The cultural nature of entertainment assigns further importance to judgments by professional reviewers and industry peers, as reflected in reviews and awards, such as the Oscar.
Chapter
In this chapter, we study branded signals or “quasi-search” characteristics. We define entertainment brands and distinguish the various kinds of brands that exist in this context. We show the strategic options that branding offers entertainment managers and discuss key branding strategies such as brand extensions, category extensions, and the use of stars as branded ingredients or para-social interaction partners of consumers. Taking a franchise perspective requires a unique perspective of brand management; we discuss it and link it with recent meta-franchises such as Marvel’s Cinematic Universe. We conclude the chapter with a look at how the financial value of entertainment brands can be calculated, based on existing data.
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Using sales data from 30,008 books from Amazon.de, this article studies the effects of four distinct online communication practices that e-tailers increasingly use: presenting product networks (recommender systems), social features (electronic word of mouth and various types of user-generated content), free trials, and vivid content. These practices vary greatly in their effectiveness in influencing consumers’ purchase decisions. The author also provides insights into the sales frequencies of popular versus niche products, in response to the selective use of these communication practices. Long-tail theory argues that consumers are particularly attracted to buying niche products, because these products match their personal preferences better than mainstream products do. In contrast, superstar theory predicts increased sales frequencies for popular goods. However, the results from this large sample reveal that both popular and niche products gain sales. The findings specify how different communication practices relatively and differentially affect sales of popular and niche products, which has notable implications for managers’ selective uses of these tools.
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Weekly box office revenues for approximately 100 successful motion pictures are analyzed by use of a finite mixture regression technique to determine if regular sales patterns emerge. Based on an exponential decay model applied to market share data, four clusters of movies, varying in opening strength and decay rate, are found. Characteristics of the clusters and implications for future research are discussed.
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Movie studios often have to choose among thousands of scripts to decide which ones to turn into movies. Despite the huge amount of money at stake, this process--known as green-lighting in the movie industry--is largely a guesswork based on experts' experience and intuitions. In this paper, we propose a new approach to help studios evaluate scripts that will then lead to more profitable green-lighting decisions. Our approach combines screenwriting domain knowledge, natural-language processing techniques, and statistical learning methods to forecast a movie's return on investment (ROI) based only on textual information available in movie scripts. We test our model in a holdout decision task to show that our model is able to significantly improve a studio's gross ROI.
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Recent technological and market forces have profoundly impacted the music industry. Emphasizing threats from peer-to-peer (P2P) technologies, the industry continues to seek sanctions against individuals who offer a significant number of songs for others to copy. Combining data on the performance of music albums on the Billboard charts with file sharing data from a popular network, we assess the impact of recent developments related to the music industry on survival of music albums on the charts and evaluate the specific impact of P2P sharing on an album’s survival on the charts. In the post-P2P era, we find significantly reduced chart survival except for those albums that debut high on the charts. In addition, superstars and female artists continue to exhibit enhanced survival. Finally, we observe a narrowing of the advantage held by major labels. The second phase of our study isolates the impact of file sharing on album survival. We find that, although sharing does not hurt the survival of top-ranked albums, it does have a negative impact on low-ranked albums.
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In many durable goods industries, firms continuously offer new products to customers and market them in different versions through different channel of distribution. This paper examines the issue of when to introduce the product into the different channels. The determinants of entry time include the discounting of future profits, the foresight of the firm, customers' expectations, and the possibility of cannibalization. Of special interest is the effect of customers' expectations about the timing of sequential entries. Specifically, it is shown here that profits decline if firms ignore the role of customer expectations. We discuss how our results can be used to get insights into the workings of the US motion picture industry, which is characterized by sequential introduction of movies first into theaters followed by home video. Finally, a closed form solution for an optimal sequential timing policy is provided.
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Widely different accounts of how people categorize new instances have been advanced in recent years. This article reviews these alternative formulations with a particular focus on the use of concrete category exemplars (from prior experience) as an alternative to category-defining rules and prototypes. It advances a contingent processing formulation that emphasizes the flexibility of the information processing system in its response to important contextual factors, and describes empirical procedures useful in identifying categorization processes.
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Virtually every product is seasonal; seasonality often dictates business strategy. In this article, the authors (1) show how to add known seasonal patterns to any dynamic model parsimoniously and without changing the fundamental model assumptions, (2) illustrate how their method provides strategic implications for timing new product introductions, and (3) provide an empirical application. The authors transform time so that, during high seasons, time is moving faster than normal time. Traditional methods only adjust sales, independent of the underlying sales model. The authors’ method also changes the product's growth along its life cycle and suggests that timing introduction decisions are dependent on the shape of the product's life cycle. The authors’ empirical work compares their theoretical results with empirical observations. With data for all major films released between July 1993 and 1995 (673 films), the authors estimate the seasonal pattern for the motion picture industry and compare their theory with studio behavior.
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In this paper a method of estimating the parameters of a set of regression equations is reported which involves application of Aitken's generalized least-squares [1] to the whole system of equations. Under conditions generally encountered in practice, it is found that the regression coefficient estimators so obtained are at least asymptotically more efficient than those obtained by an equation-by-equation application of least squares. This gain in efficiency can be quite large if “independent” variables in different equations are not highly correlated and if disturbance terms in different equations are highly correlated. Further, tests of the hypothesis that all regression equation coefficient vectors are equal, based on “micro” and “macro” data, are described. If this hypothesis is accepted, there will be no aggregation bias. Finally, the estimation procedure and the “micro-test” for aggregation bias are applied in the analysis of annual investment data, 1935–1954, for two firms.
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Americans love videos. Last year, consumers spent $17.4 billion on videos, renting 3 billion and buying 700 million (VSDA, 2000). Predicting video revenue is critical, because it accounts for 55 percent of gross studio revenue, more than box-office, pay-per-view, and television revenue combined (VSDA, 1998). How early can video revenue be accurately predicted? Several early indicators are tested: first and second weeks' theatrical revenues, fall-off, opening screens, advertising, genre, and critics' ratings. Two models are developed to predict rental and sell-through video revenue with 86 percent accuracy on average by the second week of a movie's release.
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Publishers produce books in hardcover and paperback versions with different prices and time of market introduction. Analysis of detailed book-level data reveals that (i) price-cost differentials cannot be explained by cost differences, making this an example of quality discrimination; (ii) market introduction time strongly affects sales, suggesting that time is the crucial dimension of discrimination; and (iii) there is substantial price rigidity across books and over time: prices depend on cost shifters but not on demand shifters. I discuss an explanation for this last finding in terms of the nature of demand in this market.
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In the domain of cultural products, sets of products categorized together on the basis of perceived similarities constitute a genre. When studying the process of genre categorization, any item can be viewed as the prototype of a genre plus a list of variations. The more an item resembles the prototype, the more this item is viewed as typical of the genre. The present study focuses on the extent to which the categorization of a fiction book cover by genre helps to single out the most preferred book. It is hypothesized that the typicality of a specific genre, identified by a book's front cover, affects the preference for that book. In an experimental setting, frequent and infrequent readers (N = 32) were asked to judge the typicality and to state their preference for thirteen book covers from two different genres (literature and mystery). The results show that 77 percent of all covers were classified correctly as to genre. Furthermore, the more representative a book was for a particular genre, the greater the preference for the book.
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Readers are exposed to an enormous number of new book releases each year of all genres and subgenres (fiction, reference, technical, art, religious, children, etc.). In this context, getting their attention while they are wandering in a library and stimulating their interest for a new release are issues of great importance for publishers. The study presented in this article used an experimental approach to examine the impact of five variables on readers’ interest in a new book release: the reputation of the author, that of the publisher, the attractiveness of the book cover, the degree to which the cover represents the content of the book, and the type of book (a novel or a technical book). The results showed that the first three variables had a statistically significant impact on readers’ interest. However, the effect of the author's reputation was observed only in the case of books with a technical content. These findings are discussed and their implications for the marketing of new books are addressed.
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This study tries to identify the perceived attributes used in the elimination and comparison phase of the decision-making process regarding the purchase of literary and non-literary fiction written for adults. In order to ascertain which attributes were used, the respondents were asked to work through an elimination and a comparison phase in that order. For each phase, the respondents were asked to indicate which attributes they used. To this end, open questions and subsequently 50 attributes specified by the researcher were submitted to the respondents. The results indicated that most of the frequently used attributes expressed a degree of knowledge regarding the product class. Contrary to what was expected, respondents used more attributes in the elimination phase (on average 29) than in the comparison phase (on average 12). This can be better understood by taking into account that a heterogeneous set of books was used in the assigned task. Consequently, a given attribute is only significant for a small number of books and therefore only useful in eliminating those books.
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Whenever literary books and their buyers are examined from the point of view of consumer research, the question arises whether currently used concepts can also applied to behavior concerning cultural products that contain no or only few tangible performance dimensions. In light of this question and in order to ascertain variables playing a role in establishing consumer satisfaction with literary books, a study was designed pertaining to the fulfillment of expectations concerning a book recently bought. In former consumer satisfaction research, expectations have proved to serve as a reference level against which consumers' experiences are set off in assessing the degree of satisfaction. Other variables which are deemed valuable in explaining satisfaction with books, are the social rewards gained by the possession of a book and various socio-demographic variables. These variables were also included in this study. Results indicated that knowledge about the author and experience with earlier work of an author contributes most to the expectations expressed beforehand and the subsequent level of satisfaction. The application of a general consumer research paradigm in srudying satisfaction with books is complicated by the absence of clearly circumscribed performance dimensions found in literary books.
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Marketers have long struggled with developing forecasts for new products before their launch. We focus on one data source-advance purchase orders-that has been available to retailers for many years but has rarely been tied together with postlaunch sales data. We put forth a duration model that incorporates the basic concepts of new product diffusion, using a mixture of two distributions: one representing the behavior of innovators (i.e., those who place advance orders) and one representing the behavior of followers (i.e., those who wait for the mass market to emerge). The resulting mixed-Weibull model specification can accommodate a wide variety of possible sales patterns. This flexibility is what makes the model well-suited for an experiential product category (e.g., movies, music, etc.) in which we frequently observe very different sales diffusion patterns, ranging from a rapid exponential decline (which is most typical) to a gradual buildup characteristic of "sleeper" products. We incorporate product-specific covariates and use hierarchical Bayes methods to link the two customer segments together while accommodating heterogeneity across products. We find that this model fits a variety of sales patterns far better than do a pair of benchmark models. More importantly, we demonstrate the ability to forecast new album sales before the actual launch of the album, based only on the pattern of advance orders.
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This article focuses on the sale of a product across channels that are entered sequentially. Using a two-channel model, the authors derive the optimal time to enter the second channel and then obtain a specific parametric solution for movie distributors regarding theater attendance and subsequent sales to video stores. Using data from 35 movies, the authors estimate exponential sales curves for both theater attendance and video rentals and demonstrate how knowledge of the sales parameters in the first channel (theaters) helps predict sales in the second channel (video rentals). Finally, from the movie distributor's perspective, the authors calculate optimal release times based on the model and its estimated parameters. The results suggest that profits would increase if movies were released to video sooner than is the current practice.
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This paper uses detailed weekly data on sales of hardcover fiction books to evaluate the impact of New York Times book reviews on sales. In order to weigh the relative propensity of reviews to inform and to persuade, the analysis utilizes a measure of review opinion obtained through a systematic reading of each review. The estimates indicate that in the case of book reviews, any publicity is good publicity: even negative reviews lead to increases in sales. We interpret this finding as evidence that book reviews serve largely to inform consumers about books' content and characteristics (including the books' existence). However, positive reviews have a larger impact on sales than negative reviews, suggesting that reviews also have a persuasive effect.
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In this paper a method of estimating the parameters of a set of regression equations is reported which involves application of Aitken's generalized least-squares [1] to the whole system of equations. Under conditions generally encountered in practice, it is found that the regression coefficient estimators so obtained are at least asymptotically more efficient than those obtained by an equation-by-equation application of least squares. This gain in efficiency can be quite large if “independent” variables in different equations are not highly correlated and if disturbance terms in different equations are highly correlated. Further, tests of the hypothesis that all regression equation coefficient vectors are equal, based on “micro” and “macro” data, are described. If this hypothesis is accepted, there will be no aggregation bias. Finally, the estimation procedure and the “micro-test” for aggregation bias are applied in the analysis of annual investment data, 1935–1954, for two firms.
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This paper defines hedonic consumption as those facets of consumer behavior that relate to the multisensory, fantasy and emotive aspects of product usage experience. After delineating these concepts, their theoretical antecedents are traced, followed by a discussion of differences between the traditional and hedonic views, methodological implications of the latter approach, and behavioral propositions in four substantive areas relevant to hedonic consumption-mental constructs, product classes, product usage and individual differences. Conclusions concern the usefulness of the hedonic perspective in supplementing and extending marketing research on consumer behavior.
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The consumption of hedonic goods, such as movies or books, involves multisensory, fantasy, and emotive aspects. Hedonic products are often consumed because of symbolic motives. As experience products, hedonic goods involve a high consumption risk for consumers; furthermore, suppliers of hedonic goods face significant competition. Because of these characteristics, hedonic goods have unique diffusion patterns. To provide an overview of these patterns, this article summarizes the current state of research regarding the diffusion of hedonic goods, assesses existing proposed models, and provides guidelines regarding estimating diffusion models. Furthermore, this article explains the influences of special product characteristics on diffusion processes. Results show that flexible diffusion models outperform the well-known Bass model, although the optimal modeling approach differs according to the product. Whereas the diffusion of movies nicely fits Gamma models, the diffusion of music requires more flexible models, such as logistic hazard or mixed Weibull.
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Marketing controllers traditionally analyze the profit contribution variance between actual and plan by decomposing it into a quantity and a price variance. This, however, enables them only to identify areas where problems exist rather than to diagnose their causes. In order to get more insights, this paper proposes making the planning assumptions for achieving a certain profit contribution explicit beforehand by specifying appropriate response functions. This information can be used after the fact to calculate the amount of profit contribution variance associated with different sources. In particular, the paper offers a novel decomposition principle of total variance into partial variances associated with possible sources such as incorrect market response assumptions (planning variance), deviations of actual marketing actions from planned ones (execution variance) and misanticipation of competitive reactions (reaction variance). Each of these variances can be decomposed further into the separate effects of single marketing instruments. By distinguishing between a response function for market share and one for market size, controllers can also estimate for which part of the variance the product manager may be responsible.
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Is the involvement of stars critical to the success of motion pictures? Film studios, which regularly pay multimilliondollar fees to stars, seem to be driven by that belief. This article sheds light on the returns on this investment using an event study that considers the impact of more than 1200 casting announcements on trading behavior in a simulated and real stock market setting. The author finds evidence that the involvement of stars affects movies' expected theatrical revenues and provides insight into the magnitude of this effect. For example, the estimates suggest that, on average, stars are worth approximately $3 million in theatrical revenues. In a cross-sectional analysis grounded in the literature on group dynamics, the author also examines the determinants of the magnitude of stars' impact on expected revenues. Among other things, the author shows that the stronger a cast already is, the greater is the impact of a newly recruited star with a track record of box office successes or with a strong artistic reputation. Finally, in an extension to the study, the author does not find that the involvement of stars in movies increases the valuation of film companies that release the movies, thus providing insufficient grounds to conclude that stars add more value than they capture. The author discusses implications for managers in the motion picture industry.
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We report an empirical study of determinants of the "video window" (the interval between a movie's theatrical release and its video release), primarily based on a sample of 1429 theatrical feature films released on video in the United States between 1988 and 1997. Results support our primary hypothesis that U.S. motion picture distributors resolved a time-consistency problem by coordinating their behavior to maintain longer windows than would result from a competitive industry in which distributors set windows without regard to their effect on consumer expectations. Results suggest a loosely coordinated window benchmark, slightly declining over the period, of approximately 6 months.
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Because hedonic aspects of products are difficult to evaluate prior to consumption, consumers seek signals to reduce their uncertainty. Opinion leaders, such as critics, may serve as key informants to consumers. This study considers the different roles and incentives of literary critics and how they influence the success of books. Furthermore, it empirically investigates the impact of 4 book critics featured on Germany's most popular literary television show, Das Literarische Quartett, on reviewed books' success. The variety of control variables included in the mixed regression models provide results pertaining to not only the critics, but also the success factors of books in general. Book success does not depend primarily on the mere appearance of a book on a television show or a favorable review of it; rather, awareness and word-of-mouth effects seem crucial, and books are more likely to succeed if critics disagree about the quality and express extreme judgments, even if those judgments are negative.
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This article presents a case study of the transition to a new market information regime, via an analysis of the transition to the BookScan system of measuring book sales and the potential impact of this new measurement system on how publishing industry decision makers perceive—and respond to—their competitive environment. This study critically examines the traditional systems of audience measurement—and their uses—in book publishing, as well as the diffusion process for the BookScan system. This study finds many similarities between the introduction and potential impact of BookScan and the introduction and impact of new audience measurement systems in other media, such as stronger resistance from content producers (e.g., publishers) than from other stakeholders (e.g., agents, retailers), as well as a likelihood that widespread usage of the new measurement system will contribute to greater fragmentation and greater volatility of the measured industry.
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This study considers how the trend toward media conglomeratization affected the little-studied industry that provided books to millions of children between 1992 and 1995. Two hypotheses are proposed that test different aspects of competitive market theory. The first predicts that the size of the publisher' s ultimate parent company will influence sales, and the second predicts that children's books that have ties with other media products will sell more copies than books that have no such ties. The second hypothesis is supported and the implications for the concentration of this segment of the publishing industry are discussed. In particular, this question is asked: In an environment of continuing media concentration, where are the measurable effects of that concentration in this market?
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We examine box-office sales in the context of a market share model. This is accomplished by developing a combination of a sliding-window logit model and a gamma diffusion pattern in a hierarchical Bayes framework. We show that accounting for the full choice set available every week not only increases the fit of weekly movie sales but also leads to parameter estimates that depict a richer picture of the movie industry. We show that movie studios appear to have a good understanding of the products they produce, knowing when to support them and when not to. We also show that the effect of the number of opening week screens is overestimated in traditional models. Our research indicates that actors have a direct and directors an indirect effect on consumers’ movie choice. Releasing a movie contemporaneously with other movies of the same genre adversely affects box-office performance all around. Releasing a movie against movies of the same Motion Picture Association of America (MPAA) rating hurts its sales in the beginning, but there is a displacement effect, which leads to a less severe sales loss in the long run.
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There are now available a number of new subscription services that comprise a dual pricing system of a monthly access fee (rental) and a per-minute usage charge. Examples include cellular phones, the Internet, and pay TV. The usage and retention of such services depend on the absolute and relative prices of this dual system. For instance, a moderate access fee but a low-usage charge might initially appeal to customers, but later a low-usage customer might find the monthly fee unjustified and thereby relinquish the service. Providers of such services, therefore, usually offer several pricing packages to cater to differing customer needs. The purpose of this study is to derive a revenue-maximizing strategy for subscription services, that is, the combination of access and usage price that maximizes revenue over a specified time period. An additional objective is to determine access and usage price elasticities because they have historically played an important role in theoretical pricing models. The application area is the cellular phone market, but for a new rather than an existing product. To help gauge the likely usage rates and customer retention, a field experiment is conducted in which several alternative price combinations are used. Specifically, a sample of potential residential customers (most of whom did not have an existing cell phone) were divided into four treatment groups. The first group were not charged an access fee but did have to pay a small per-minute usage charge. The second group also paid a small usage charge but in addition had three access price increases over the duration of the trial. The third group paid no access fee but had usage charge increases, while the fourth group had both access fee and usage charge increases. Usage levels for each respondent are recorded, as is their month of dropout if they discontinue the service. An initial examination of the data shows that higher access fees result in higher customer attrition, and higher usage cost results in lower usage. Furthermore, usage and retention are related in that declining usage levels over time often signal impending customer attrition. Hence, two phenomena need to be modeled: usage of the service and customer retention conditional on usage. Some seasonal effects are also observed and are allowed for in the model. Modeling customer attrition simultaneously with usage is important because ignoring customer attrition will likely result in an underestimate of price sensitivity. This results from a censoring effect, whereby respondents who remain in the trial tend to be wealthier, and hence, less price sensitive. Given the known problems of ignoring customer attrition, we develop a theoretical model of usage, which explicitly incorporates attrition by extending a time-series model introduced by Hausman and Wise (1979). We make two extensions of the Hausman and Wise model. The first is to generalize it from two to many time periods and the second is to allow for respondent heterogeneity by incorporating latent classes. We fit the model by maximum likelihood and find that a two-segment model is best. In addition, we examine the predictive validity of our model and find it to be reasonably good. In general, the results show that access and usage prices have different relative effects on demand and retention. There are five key results. First, access price has some effect on usage but a much stronger effect on retention. Second, usage price has a strong effect on usage and a moderate effect on retention, in that if usage price increases so much that usage declines, then lower usage levels results in higher attrition. Third, access price elasticity is about half that of usage price, with both elasticities generally being much smaller than 1, indicating relative inelasticity for this particular service. Fourth, customer attrition rate (churn) is much more sensitive to access than usage price and, last, if just observed usage is examined and customer attrition is ignored, then price sensitivity is very likely to be substantially underestimated (on the order of 45% in our case). Finally, when developing the revenue-maximizing price combination we allow for the cost of customer acquisition by using some typical advertising-to-sales ratios for the telecommunications industry. We find that the revenue maximizing price is $27.70 per month for the access fee and $0.81 per minute for the airtime charge. These values are in line with current access fees and usage costs in the given market.
Article
We study the determinants of the 'video window' (the interval between a movie's theatrical and video releases), based on a sample of 1,157 films released on video between 1988 and 1997. For subsets of films having shorter theater run lengths (1 to 17 weeks), windows were generally longer than, and largely invariant to, measures of the time required to exhaust the theater market. One interpretation of our results is that U.S. movie distributors resolved a time consistency problem by coordinating their behavior to maintain longer windows than would have otherwise resulted, but different explanations are also plausible. Copyright 2010 The Authors. The Journal of Industrial Economics 2010 Blackwell Publishing Ltd. and the Editorial Board of The Journal of Industrial Economics.
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Despite the interest in measuring price sensitivity of online consumers, most academic work on Internet commerce is hindered by a lack of data on quantity. In this paper we use publicly available data on the sales ranks of about 20,000 books to derive quantity proxies at the two leading online booksellers. Matching this information to prices, we can directly estimate the elasticities of demand facing both merchants as well as create a price index for online books. The results show significant price sensitivity at both merchants but demand at BarnesandNoble.com is much more price-elastic than is demand at Amazon.com. The data also allow us to estimate the magnitude of bias in the CPI due to the rise of Internet sales.
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Information systems and the Internet have facilitated the creation of used-product markets that feature a dramatically wider selection, lower search costs, and lower prices than their brick-and-mortar counterparts do. The increased viability of these used-product markets has caused concern among content creators and distributors, notably the Association of American Publishers and Author’s Guild, who believe that used-product markets will significantly cannibalize new product sales. This proposition, while theoretically possible, is based on speculation as opposed to empirical evidence. In this paper, we empirically analyze the degree to which used products cannibalize new-product sales for books—one of the most prominent used-product categories sold online. To do this, we use a unique data set collected from Amazon.com’s new and used book marketplaces to measure the degree to which used products cannibalize new-product sales. We then use these estimates to measure the resulting first-order changes in publisher welfare and consumer surplus. Our analysis suggests that used books are poor substitutes for new books for most of Amazon’s customers. The cross-price elasticity of new-book demand with respect to used-book prices is only 0.088. As a result, only 16% of used-book sales at Amazon cannibalize new-book purchases. The remaining 84% of used-book sales apparently would not have occurred at Amazon’s new-book prices. Further, our estimates suggest that this increase in book readership from Amazon’s used-book marketplace increases consumer surplus by approximately $67.21 million annually. This increase in consumer surplus, together with an estimated $45.05 million loss in publisher welfare and a $65.76 million increase in Amazon’s profits, leads to an increase in total welfare to society of approximately $87.92 million annually from the introduction of used-book markets at Amazon.com.