Diminishing or increasing? Exploring the impact of online movie reviews on consumer demand within and across two sequential release stages

Abstract This study examines the impact of online movie reviews on consumer demand within and across two sequential release stages: theatrical run and online streaming. In contrast to extant findings of a diminishing sales effect of online reviews, we observe an increasingly positive impact of movie reviews in the cinema release stage, in line with the theory of diffusion of innovations. Moreover, consumers are predominantly conservative in using product reviews to select foreign products due to the cultural gap. After movies are released online, the role of product reviews changes according to the release gap. Movies with a higher review valence and volume during the cinema release will continue to benefit from the reviews with a shorter release gap. In contrast, movies that receive a lower review valence in the early market benefit from setting a longer release gap and waiting for the online buzz to dissipate.