Do online searches influence sales or merely predict them? The case of motion pictures

Abstract

Purpose

This paper aims to examine whether a film’s search volume causes its ticket sales in different stages of its lifecycle.

Design/methodology/approach

This study tests the causality between searches and sales by using an instrumental variable approach. This study exploits the ideas that consumers’ perception of a product’s consumption risk is correlated with their search efforts and consumers use multiple information sources to infer a product’s consumption risk. As an instrument for a focal film’s search volume, this paper uses review disagreement for past movies related to the focal film. This paper incorporates the ideas in a model of weekly online search volume and revenues and apply it to a movie data set.

Findings

Films’ search volume influences their revenues only until the opening week. A 10% increase in opening-week search volume generates a 7.4% increase in opening-week revenue, while the same increase in pre-launch search volume generates a 4.1% increase. Although searches are not an influencer of sales from the second week on, the random forest models and cross-validation studies find that weekly search volume is a strong predictor of weekly revenues in this period.

Research limitations/implications

Testing the findings in other product categories is important for generalizing the findings.

Practical implications

This study suggests different usage values for online searches, depending on a film’s lifecycle stages. Furthermore, given that review disagreement has a positive influence on opening-week revenue through searches, managers should encourage diverse opinions about their films until the opening week to increase sales through searches.

Originality/value

Regarding the role of online search, previous studies have maintained the perspective that online search is a predictor of sales. This is the first study that finds causality between searches and sales for films.

Citation

Kim, H. (2021), "Do online searches influence sales or merely predict them? The case of motion pictures", European Journal of Marketing, Vol. 55 No. 2, pp. 337-362. https://doi.org/10.1108/EJM-08-2019-0655