Whose and What Chatter Matters? The Impact of Tweets on Movie Sales

The study reveals the potential values of monitoring people's intention and sentiment on Twitter and identifying influential users for companies wishing to harness the power of social broadcasting networks and provides new perspectives to understand the effect of WOM on product sales and have important managerial implications.

Abstract

Social broadcasting networks such as Twitter in the U.S. and\n\\Weibo" in China are transforming the way online word-of-mouth\n(WOM) is disseminated and consumed in the digital age. We investigate\nwhether and how Twitter WOM aects movie sales by estimating a dynamic\npanel data model using publicly available data and well known machine\nlearning algorithms. We nd that chatter on Twitter does matter, however,\nthe magnitude and direction of the eect depends on whom the WOM is from\nand what the WOM is about. Measuring Twitter users' in uence by how many\nfollowers they have, we nd that the eect of WOM from more in uential\nusers is signicantly larger than that from less in uential users. In\nsupport of some recent ndings about the importance of WOM valence on\nproduct sales, we also nd that positive Twitter WOM increases movie\nsales while negative WOM decreases them. Interestingly, we nd that the\nstrongest eect on movie sales comes from those tweets where the authors\nexpress their intention to watch a certain movie. We attribute this to\nthe dual eects of such intention tweets on movie sales: the direct eect\nthrough the WOM author's own purchase behavior, and the indirect eect\nthrough either the awareness eect or the persuasive eect of the WOM on\nits recipients. Our ndings provide new perspectives to understand the\neect of WOM on product sales and have important managerial implications.\nFor example, our study reveals the potential values of monitoring\npeople's intention and sentiment on Twitter and identifying in uential\nusers for companies wishing to harness the power of social broadcasting networks.