Time Is Money: Running Time and Efficient Strategies in the Movie Industry

Clementina Bruno, Fabrizio Erbetta, Ilde Rizzo, Roberto Zanola

Clementina Bruno, Department of Economics and Management, University of Eastern Piedmont, Italy
Fabrizio Erbetta, Department of Economics and Management, University of Eastern Piedmont, Italy
Ilde Rizzo, Department of Economics and Business, University of Catania, Italy
Roberto Zanola, Department of Law and Political, Economic, and Social Sciences, University of Eastern Piedmont, Italy

ABSTRACT
Despite the importance of running time, the economic literature focusing on the determinants of box-office revenues has almost neglected its role as a strategic variable. This note fills in this lack of literature by focusing on the role of running time on box-office revenues. To this aim, using an original dataset composed of worldwide top 20 titles from 2010 to 2019, we perform a two-stage Data Envelopment Analysis (DEA), in which scale efficiency is defined as the capability to plan running time in order to maximize box-office revenues. Results show that running time is a crucial strategic variable to design revenue performance, whose role significantly differs across genres.

KEYWORDS
Movie industry, two-stage DEA, running time, box office