Movie stars don’t necessarily ensure that a movie makes more money, but they do decrease risk of lower early earnings, finds a study by Amit Joshi at the University of Central Florida. Analyzing a dataset spanning 26 years and nearly 800 wide-release movies, Joshi found that movies with big-name stars have significantly lower variances of revenue — i.e., a more predictable pattern of revenue — in the first three weeks after the film’s launch than movies without stars. This suggests that star power is the leading indicator of box office revenue in the first phase of a movie’s lifecycle. In weeks four and five, the variances of star movies and average movies are not significantly different from each other, which suggests that other factors, like quality, become more important in determining box office revenue. The research addresses numerous calls to find the economic value of high-priced stars, the paper says.
Source: Movie Stars and the Volatility of Movie Revenues
