Empirical Generalizations on the Impact of Stars on the Economic Success of Movies
Movie industry experts continuously debate whether the industry’s enormous investments in stars pay off. To derive empirical generalizations, the authors (1) provide a meta-analysis of the relationship between star power and movie success and (2) analyze a comprehensive dataset from that industry with n=1,545 movies. Based on these two studies, four empirical generalizations emerge. First, when ignoring selection effects of stars, the impact of star power on box office revenues is strongly upwards biased. Second, artistic star power (cf. commercial) is associated with significantly lower box office revenues. Third, on average, movies with a commercially successful star (cf. without a commercially successful star) generate 12.46 million US$ additional box office revenues. In contrast, artistic star power does not result in a statistically significant revenue premium. Fourth, commercially (artistically) successful stars have a statistically significant “multiplier effect” of 1.127 (1.083) on other characteristics that influence a movie’s box office revenues.