Carnegie Mellon University

Disruptive Tech and Entertainment

Digital streaming platforms. Subscription-based movie ticketing services. 4K Ultra HD.

Innovative technology is transforming the ways in which your customers acquire and consume their favorite entertainment. And the technology is constantly changing.

As an entertainment company, how can you use take advantage of technical disruption within your industry? IDEA faculty members Michael D. Smith and Rahul Telang conduct tech-driven research on the cutting edge of the industry to ensure that you are staying ahead of trends from the moment of creative conception to the release date.

Research Results

Books by a computer

Despite industry-wide anxiety over digital used book marketplaces, only 16% of Amazon’s used book sales cannibalize new book sales. Each year, the used book marketplace generates more than $87.92 million in total welfare to society.

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Movie seats on a laptop

While media producers often delay the digital releases to promote physical sales, this strategy increases demand for pirated content. By releasing material over both channels simultaneously, content creators can improve sales and reduce piracy. 

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Hands touching over digital commerce

Our comprehensive literature review has characterized the impact of online markets on long tail and blockbuster products, digital word-of-mouth for promoting content, and overall Internet consumer behavior.

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Digital music

Combining tiered pricing with reduced album pricing leads to an 18% increase in label revenue and a 23% increase in consumer surplus. Even without tiered pricing, unbundled albums substantially outperform “album-only” pricing policies.

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A tablet on a bookshelf

Recently, publishers have experimented with delaying eBook availability to bolster hardcover sales. However, our research found that delaying eBook availability does not increase print book sales. In fact, it also reduces eBook sales by 43.8%.

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Social media Likes on cell phone

Online peer review systems are largely self-regulating. Even when movies are artificially promoted or demoted in peer rating lists, these movies quickly return to their true quality position through subsequent reviews.

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Film reel coming out of computer

The introduction of digitial distribution channels does not negatively impact the cross-channel sales of digital movies. Instead, these promotions often precipitate a positive spillover across purchase and rental channels.

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People in circle on internet devices

Our novel method of measuring information diffusion in online music communities has revealed that the users are six times more likely to diffuse a new song to their peers than they would be in the absence of this community.

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Computer search engine

We have demonstrated that the ranking mechanism used by search engines does not factor in the conversion rate of longer key phrases. As such, our research shows that placement in the top position does not guarantee optimized revenues.

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A man sits alone in a theater

Using the occurrence of major snowstorms during a movie’s opening weekend as an external “shock” to the local market, we found that theatrical attendance directly impacts subsequent DVD/Blu-ray demand: a 10% decline in theatrical attendance results in an 8% reduction in DVD/Blu-ray demand.

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Football breaks through glass

In light of the absence of research on the causal impact of ad expenditure, we have found that television advertisements have an effect on product demand and purchase decisions. On average, a $3 million Super Bowl ad yields an additional $8.4 million in opening weekend box office revenue.

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Wires and microphone at concert

Based on data from over 33,000 concerts in the United States from 2000 to 2011, we have found that the digital music era has led musicians to turn to touring as their primary source of revenue. As a result, artists tour more often and visit venues across a wider geographic dispersion.

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