How the competitors’ online reviews affect product performance in the dynamic competitive market: an empirical analysis of the movie industry

Yingwei Xu, Haibo Wu and Rui Li

Applied Economics Letters, 2024, vol. 31, issue 1, 75-80

Abstract: Online consumer reviews have been shown to have a significant impact on the market performance of products. Yet little is known about the role of competing products’ online reviews in a dynamic competitive environment. Using field data, we investigate the impacts of online reviews of contemporaneous competing movies on the box office and attendance of a focal movie. The empirical results suggest that the competitor’s review rating, which displayed on the same ticketing page with a focal movie, has a negative impact on the economic performance of the focal movie. Interestingly, the competitor’s review volume has a negative impact only if its review rating is high. We further examine the heterogeneous effect in focal movies (sequels vs. non-sequels), and find the impacts of competitors’ reviews are stronger for non-sequels. Our research can help movie stakeholders optimize their market entry strategies, and provides theoretical implications for the research on online reviews.

Date: 2024
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DOI: 10.1080/13504851.2022.2128162

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