The Park Place Economist


This paper focuses on the effects of several variables on the domestic box-office demand for the 189 widely-released movies of 2007. I will examine if there are factors that ultimately lead to movie success at the box-office or if there are factors that are believed to be important, but in all actuality have very little impact on revenues. Box-office receipts, however, are not the ultimate determinant of success in the industry. Some companies may use theaters as extended advertising medias and capitalize on the relatively cheap cost of producing DVDs and digital copies of films, but success typically has to occur in the theaters in order for other forms of the film to sell. Nevertheless, examining box-office revenue is the best way to determine the success of a film at this time because the information is readily available and movie theaters are still accepted as the major source of revenue for a particular movie.