"Sequel Mania": Why Hollywood is Getting Increasingly Interested in Sequels? Open Access

Abstract

The Paper aims to understand why Hollywood studios choose to make more sequels in recent years. I examine the box office performance of sequels in both nominal terms (revenue) and real terms (moviegoers) based on 9 variables and the interaction terms. A total number of 396 sequels, ranging in a fifty-year period, are analyzed under two OLS regression models. The main findings include that a return of two times of the budget input can be expected from making sequels. The performance of previous films in the movie franchise is positively related with the performance of the sequel. The critics rating, as a proxy of the quality of the sequel, plays a significant role in affecting audience's decision, which indicates that the audience are rational in making decisions. One noteworthy finding is that sequels made after two years of its predecessor cannot attract as many viewers as those made within two years. This is attributed to the momentum of audience's memories. Finally, my work reveals that a sequel rated R can negatively effect the impact of budget on box office.

Table of Contents

I. Introduction. 1

II. Literature Review. 5

III. Dataset. 7

IV. Empirical Strategy and Results. 10

V. Discussion and Extension. 16

VI. Conclusion. 17

VII. Reference. 19

VIII. Appendix. 22

Figure 1: Prevalence of Sequels in Top-ten Grossing Films, 1996-2015. 22

Table 1: Descriptive Statistics of All the Variables. 23

Table 2: Correlation Matrix in Nominal Terms. 24

Table 3: Correlation Matrix in Real Terms. 24

Table 4: Impact on Box Office Performance .25

Table 5: Interaction Effect on Box Office (ROMA). 26

Table 6: Interaction Effect on Box Office (Rfilm). 27

Table 7: Interaction Effect on Box Office (Source). 28

Table 8: Interaction Effect on Box Office (Year). 29

Table 9: Interaction Effect on Box Office (Timespan). 30

About this Honors Thesis

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School	Emory College
Department	Economics
Degree	BA
Submission	Honors Thesis
Language	English
Research Field	Economics, General Cinema
Keyword	Revenue Sequel Star
Committee Chair / Thesis Advisor	Mialon, Sue, Emory University
Committee Members	Kim, Jong H, Emory University Cook, Ryan M, Emory University

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