Popularity of a movie and financial success

Abstract

This thesis focuses on how the popularity of a movie and related factors such as di-rector and casting worth affect the financial success of a movie and the market value of the distribution company when there is an unexpected loss or gain. Also, the thesis attempts to examine the determinants of the stock price of a movie on the virtual stock market, the Hollywood Stock Exchange. Cross sectional analysis is exercised using data from 450 films released in 2019. The findings show that popularity is a positive and significant factor in predicting box office revenue. Director's previous success makes a significant positive impact on the financial success. Casting worth, determined by the previous financial success of the actor/actress, derives movie suc-cess financially. Unexpected revenue gained/lost is found to make no effect on cu-mulative abnormal returns. The stock price of a movie on the Hollywood Stock Ex-change highly depends on revenue and public awareness (number of news, theaters, popularity of a movie and number of weeks).