Seasonality in the U.S. motion picture industry

TLDR

Box‑office seasonality arises from both demand fluctuations and the timing and quality of movie releases. The author estimates weekly movie demand using fixed‑effects models on a long panel of weekly revenues and imposes decay restrictions to separate demand and supply seasonality. The estimated demand seasonality is smaller and slightly different from observed sales seasonality; blockbuster releases coincide with peak demand, amplifying seasonality, and price rigidities may facilitate this amplification.

Abstract

The observed seasonality of box‐office revenues reflects both seasonality in underlying demand for movies and seasonality in the number and quality of available movies. I separately identify these aspects by estimating weekly demand for movies, using movie fixed effects, a long panel of movies' weekly revenues, and restrictions on their decay pattern. I find that the estimated seasonality in underlying demand is much smaller and slightly different from the observed seasonality of sales. The biggest movies are released at times when demand is highest, amplifying the underlying seasonality. Price rigidities in the industry may facilitate this amplification effect.