SOCIAL MEDIA BUZZ AND NEW PRODUCT ADOPTION

Abstract

In this thesis, I analyze the interplay between social media buzz on Twitter and the adoption of new movies. Firstly, I find that, over the years, the returns to movie quality-as measured through the correlation between box office revenues and IMDB Rating-have improved and this is notwithstanding the fact that overall movie watching has shown a reduction. Secondly, my results suggest that box office revenues are positively influenced by social media buzz. The mechanism for the said effect is through inflation in the initial market potential, which results in higher initial sales. I also find that informativeness of tweets hardly matter, and in general, people tend to be informative about why they hate a movie, rather than why they love it. I also discuss the heterogeneity of these results for different categories of movies.