Estimating the Effects of Integrated Film Production on Box-Office Performance: Do Inhouse Effects Influence Studio Moguls?

Each year well over one billion movie tickets are sold to an audience who knows very little about what they are getting themselves into. Why is it that despite the uncertainty, people return to the theaters to see what Hollywood has in store for them? In efforts to provide answers regarding the driving forces behind Hollywood’s blockbuster hits, this study takes into account the integration levels of the studios. Specifically, does a movie produced in-house at a large studio have a better chance of being a blockbuster hit than one which is outsourced to an independent production company? Further, I discuss the motivation behind the studios’ decision. While considering the embedded integration within the motion picture industry, this study aims to provide insight regarding the extent of internal studio productions and the effects of these films on the box-office