The adoption of social networking technologies in cinema releases

Film marketing plays a growing role in movie release due to the high cost and financial risk of film production, with studios investing in expensive marketing campaigns to maximize revenue early in the release cycle. Marketing for films is a significant part of the budget, with Hollywood spending about $4 billion a year to buy TV and print advertising. Product cycles have accelerated, and studios are increasingly sensitive to criticism and market positioning. Because of its immediacy and ubiquity, Internet social networking is seen as a cost‐effective alternative to traditional promotion. The current research investigates the effectiveness of Internet social networking in film success through a novel application of event study methods based on Internet search engine datasets. I find that release directed Internet social networking activities increase film revenues 64% and increase search activity 48%. I also report that increased revenue and search continue after the release period during the time that films appear on DVD, streaming and subscription TV, with revenue 14% higher than it would have been without the social networking campaign. In addition, I observe increased viewer search of around 41% over what it would have been without the Internet social networking campaign. A marginal increase of Internet social networking activity is predicted to result in a threefold increase in search intensity related to a film. The analysis shows that both budgets and the level of Internet search activity are important factors in the revenue generation of films, and Internet social networking campaigns lead to higher revenues.