Causal analysis of screen adaptation release and demand for fiction books

According to the model, mostly all variables explaining the demand for books with adaptation are statistically significant. The effects of the independent variable are similar to the previous estimations of OLS regression model. As for quality characteristics, the publishing house's power is important for readers, as they are loyal towards particular publishers, such as “Eksmo”, and “OLMA Media Group”, and “Azbuka” press. Both the rating and the number of people who have left feedback on the reading site stimulates the sales. In all these estimates, we find that receiving the Prize has a strong effect on sales.

Moreover, the elder the year of the book publishing is, the more the likelihood that the book is sold. A book that has been printed several decades ago are popular respectable well-known books. Otherwise, book retail chain wouldn't order such exemplars.

Different genres have shown different tendencies. The fantasy increases the book sales. However, if the book is a detective, a memoir or a sentimental novel the demand for the book with adaptations is lower.

As for quantitative characteristics, hardcover increases the demand in comparison with a paperback. Medium and big size lead to decrease in book demand. The more pages are there in the book, the less demand is.

Turning to the books without adaptations, the results reveal a somewhat similar picture. The exception to this is genres' effect differences. Russian prose, as well as fantasy, is positive and statistically significant. As for price elasticity, it is positive and significant for both samples of books.

The most important variables are and , that show the difference in outcomes of two subsamples. The variable is not statistically significant. This means that books that movie industries have decided to adopt have a level of performance that is not statistically different from that of a random book that has the same set of observable characteristics. However, the estimated coefficient for non-adapted books variable () has a negative sign and estimated coefficient of -0.29 The implication of this result is that those books that movie producers have refused to adopt perform worse than would otherwise book with the identical characteristics with the screen adaptation. This result proves the first hypothesis H0, that the screen adaptation release increases the demand for books.

Таble 7 Endogenous switching regression

Note: Standard errors are reported in parentheses. The symbols ***, ** and * indicate that coefficients are statistically significant, respectively, at the 1, 5 and 10 % level

The empirical apparatus indicated above enables to reveal the key drivers of the demand for fiction books including movie adaptation release, which can be helpful for solvation of practical tasks. Thus, the results obtained in this study can be used by the employees of the book network to manage the performance of the book retail.

Purchasing managers should pre-order books from publishers, the screen version of whose are soon expected. It can be monitored through mass media because there is much advertising information about the movie before its release. For example, movie teasers, trailers, and posters can be released a year before the premiere. Moreover, as the literary award is a significant sign of quality for readers, managers should monitor the shortlists of famous literary awards in order to attract the consumer with the highly evaluated by the critics books on the bookshelves. Also, they should adjust their book assortment according to the preferences of the readers. Most people prefer little-formatted books, books with few numbers of pages, books in hardcover. However, it should be found the reasonable balance between the assortment of books on the bookshelf. Interestingly, the price of the book can be raised without any trouble. People are ready to buy more expensive books, as this is a sign of welfare and reputation.

Таble 7 Predicted difference in demand for a random book

Note: Standard errors are reported in parentheses. The symbols ***, ** and * indicate that coefficients are statistically significant, respectively, at the 1, 5 and 10 % level

Conclusions and limitations

The research proposed by this paper attempts to reveal different determinants of book quality that drive the demand for fiction and especially focus on screen adaptations. The Russian book market needs the promotion of books and stimulation of reading. There are several key determinants that drive the demand for books. They are author's and publisher's strength, experts' reviews, public opinion. To investigate the Russian book market structure, the online survey is conducted. According to the results, people are interested in the book if it is a sequel or it has a theatre play performance if the book is a mainstream or awarded. Some people are interested in book's characteristics such as design, the author's authenticity, genre and the plot. 14% of the respondents noticed the importance of screening. However, some of these people have started reading after getting acquainted with the original book and some before the spin-off.

Thus, the movie adaptation is one of the most controversial factors affecting the book demand because of its causality effect. The analysis of the relevant literature review has indicated that this causal relationship is due to the country's features of the studied market. On the one hand, interesting adaptation of the book can increase the sales in bookshops. So, the screen adaptation release positively affects the demand for fiction books, because people are loyal to purchase the book after getting acquainted with its plot. On the other hand, movie producers choose best-sellers for making movies with higher box-offices. To that extent the following hypothesis has been put forward:

H0: Screen adaptation release increases the demand for books;

H1: Popular books are more likely to be screened then less known books;

To investigate the causal effect of screen adaptation release and demand for fiction books the data based on Russian book retail chain has been gathered. Whereas the information on the films has been collected manually from IMDb.com and Kinoiskisk.ru.

It includes 25341 titles of purchased books and 236 book-based movies released between 2014 and 2015. The information about books in combination with movies allows constructing a basic OLS regression model, which include key determinants of the book demand. Moreover, for deeper investigation of the causality effect, the ML switching equations model with endogenous switching is used. It allows to simultaneously evaluate the book demand models and models for adaptation release decision. It allows to avoid endogeneity problem caused by causality effect and at the same time compare the effect of screen adaptation release on demand. Thus, the empirical apparatus proposed in this study shows book characteristics important for potential readers. It also reveals the effect of the movie release and determines the primary cause based on Russian data.

As it is assumed, the presence of the movie raises the book demand by 43%. Considering the causality effect, the switching regression models indicate that those books that movie producers have refused to adopt perform worse than would otherwise book with the identical characteristics with the screen adaptation. This result allows not to reject the first hypothesis

H0. At the same time, the model shows that motion picture industries want to invest their money in high-rated popular books. As the variable number of people who have left their scores on the literary site is significant, obviously, producers rely on the popularity of the books. This result confirms the second hypothesis

H1. To sum up, both effects exist simultaneously in Russian book market. So, the book popularity affects the decision of the producers whether to make an adaptation or not and at the same time, this decision affects the demand for books.

Moreover, both model specifications show similar results of variables characterizing the book demand. Such book characteristics as the literary prize, high rating, great number of people who rated the book stimulate sales. Furthermore, popular publishing houses, eldest well-known to the reader books are important for a consumer. Foreign prose and the fantasy are preferred genre among readers. These results can be helpful for employees of the book network to solve practical problems. Purchasing managers should pre-order books from publishers, the screen version of whose are soon expected, they also should monitor the nominated with the literary prizes books and authors.

The analysis of the price elasticity has shown that the price of the books can be slightly increased. And the assortment should fit the readers' preferences, namely, little-formatted books, books with few numbers of pages and books in hardcover. The proposed research has several limitations. As a result of missing data, the bias and inconsistency of estimates arise. In the present study, we assume that only adaptation release drives people to purchase a book. However, the advertising period between the screen release and its first announcement is also very important. First trailers, teasers, and posters also can make people want to buy an adapted book.

Furthermore, our sample does not include books purchased in the first half of the 2016 year. It is important because the screen adaptation release is usually settled in the last 3 months of the year. It means that the effect of movies screened in the last months of 2015 is affecting the book sales in 2016. Moreover, as we have found in the survey research, readers believe that the author's authenticity and book annotation with its plot is essential for their decision-making process whether the book is worth purchasing or not. They also rely on their peers' referrals and word of mouth reviews. The future investigation should take these variables into account to make the results more consistent. Thus, applying new information will enhance the explanatory power of the model. Moreover, it is important to mention, that while a new faster-growing segment of the book market is developing, it is difficult to determine the full effect of screen versions. It is e-book market with free downloads. Therefore, gathering data from such platforms as Amazon or E-bay will make the result more accurate. Our survey investigation also has some limitations. The obtained results can be extended only to a certain group of people. Basically, these are young people that study at High School of Economics.

It is possible that other groups of people use a different set of book quality signals to decide whether the book is worth reading or not. For example, people with children may choose books according to the book font and colorful pictures. If these problems are overcome, a better analysis of sales will be made. The results will be more revealing. Nevertheless, the obtained results can be used by the book retail chain managers to solve practical problems.

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Appendix 1

Survey

1. How often do you read fiction literature?

o Every day

o 2-3 times a week

o once a week

o 1-3 times a month

o Less than once a month

2. Where do you usually get your books from?

o Purchase from bookstores

o Purchase/download from websites

o Borrow from libraries

o Borrow from friends/ family members

o Elsewhere

3. Do you keep an eye on fiction novelties?

o Yes, I always do

o No, I do not

o Occasionally

4. What is the latest book, that you have read?

____________________

5. Why have you chosen it to read?

____________________________________________

6. How do you discover new reads?

o Worth of mouth referrals (peers, family members, etc.)

o social media (TV, newspapers, journals)

o online recommendations

o Book annotation

o other

7. How would you rate the statement “I would be interested in following the reader mainstream” on a scale of 1 to 5 (1- least, 5- highest)?

8. How would you rate the statement "The book design is important for me" on a scale of 1 to 5 (1- least, 5- highest)?

9. How would you rate the statement "I read according to my mood" on a scale of 1 to 5 (1- least, 5- highest)?

10. What is your gender?

o Male

o Female

11. Which category below includes your age?

o 17 or younger

o 18-25

o 26-40

o 41-60

o 61 or older

12. What is the highest level of education you have completed?

o High school degree

o Vocational school

o Some university courses

o Bachelor's degree

o Master's degree

o PhD

13. What is your marital status?

o Single

o Married

14. Have you got any children?

o Yes, I have

o No, I haven't

15. In a typical month, how difficult is it for you to cover your expenses and pay all your bills?

Please use a 5-point scale, where 1 means “extremely difficult” and 5 means “Not at all difficult”.

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