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Product Life-Cycle: New Products, Quality, Substitutes And Advertising In The Theatrical Movie Markets, Jayendra S. Gokhale, Wesley Wilson

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In the market for US theatrical movies, there are a set of products (movies), and over time, new products appear and existing products disappear. We develop and estimate a model of the product cycle for movies and the decay of products over time to examine the effect of product quality, production cost, advertising and substitutes on the movie life cycle. Intuitively, new products should have a strong negative effect on the probability of survival of existing movies. The effect, however, is heterogeneously present only for the substitutes from some types (genres). While it is expected that good-quality movies tend to …