Online negative public sentiment does not matter? — Empirical evidence from social media and movie industry

Recently, as social networking websites become increasingly ubiquitous, there is also a surge in academia to study their potential impacts on business practice. One strand of literature focuses on the public sentiment expressed through social media and how such sentiment shape business environment. Previous researches have proved that public sentiment on social media does have an impact on movie´s opening weekend box office. This study aims to specifically analyze both positive and negative sentiment by following this strand of research in movie industry. The results confirm that positive sentiment shares high covariance with profitability whereas negative sentiment becomes insignificant after controlling for the production budget. In other words, online negative sentiment towards a product does not necessarily affect profitability negatively.