Market entry timing, uncertainty and temporal agglomeration: The case of the Hollywood cinema industry

Abstract

The aim of this article is to show that firms opt for temporal agglomeration (entering the market at the same time as their competitors) when uncertainty concerning the success of their products is particularly significant. An analysis of the major Hollywood studios from 2000 to 2006 shows that these firms limit uncertainty by adopting similar behaviours. Results show that a combination of factors lead to the agglomeration of film release dates. Budgets and styles are used as reference points by players in the industry; Oscar and day-off effects are strong. Rules and standards relating to the process of selection limit firms’ behaviour. More than a deliberate strategy, temporal agglomeration seems to emerge from complex interactions, increasing competition and thus decreasing the movies’ market performance.