【Topic】Sources and Impact of Star Power

【Speaker】LIU Xia, Doctoral Student of Syracuse University

【Time】2009-11-12 13:30-15:00

【Venue】Room 101, Shunde Building, Tsinghua SEM

【Language】English

【organizer】Department of Marketing

Abstract

The phenomenon of stardom is ubiquitous across industry boundaries. Although involving stars in products such as music, sports, and movies is highly expensive, the conventional wisdom has been that stars are a critical element of new product success. Yet, the extreme earnings by the stars have caused on-going debate on whether such earnings are deserved. Even if getting the stars involved helps launching the new product, as illustrated by the Hollywood belief that star power is opening power, a question remains as to how long the impact of starts can last during the product lifecycle. Focusing on the phenomenon of star power in the motion picture industry, this paper unpacks the general concept of stardom into various components. We examine what sources of stardom are more influential on a spectrum of key stakeholders, and study the dynamics of star power throughout a movie’s theatrical run. In doing so, we adopt a more holistic view of stars and take a first step to develop an integrated framework of star power. Based on a sample of recent movies, we first examine the sensitivities of different market participants including investors, movie theatres, the media, and the audience, to different star power components, and how the decisions of those market participants, together with the star power sources, influences the box office revenue. Then, utilizing a fixed-effect vector decomposition (FEVD) model on a set of panel data, we empirically investigate whether the star power effects decay during a movie’s theatrical life, the pattern of this decay for different sources of star power, and how word-of-mouth(i.e.,buzz) moderates this decay. Findings of this research shed light on the mysteries and controversies about stardom in Hollywood, and provide theoretical and practical insights for both scholars and industry practitioners.