The grass is not always greener

The movie industry, like any other cultural industry, is often viewed as highly ambiguous, risky and uncertain. As a part of serving customer’s new preferences and searching for novelty, movie producers sometimes choose to switch and explore a new genre.

By examining the sample of 2084 movies (produced in the United States from 2001 – 2004), this paper aims at investigating how switching genre and entering a new market (which is often seen as innovation) relates to the movie performance.

We use two indicators of movie performance in this paper, the market performance, measured by the number of ticket sales, and the artistic performance, measured by the expert’ reviews. We found empirical evidence that the genre similarity has a positive correlation with the movie performance. We also found that the tenure amplify the relationship between genre similarity and movie performance.

These three correlation, further, is moderated by the past performance. However, the relationship between genre similarity and by the tenure of producers involved in a certain genre has a significantly positive correlation with market performance in this genre but negative correlation with the artistic performance.

This finding might explain that the movie audience demands consistency and managed expectation from particular movie, while the expert looks for novelty and innovation.