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What Becomes a Blockbuster Most? |
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Friday, 13 October 2006 |
Basically, doesn’t it seem like there should be some formula for how long films last in theaters? A film debuts so big, receipts fall off at some given rate, and ba-da-bang! You should be able to know whether to rush out and catch that movie
By D. W. O'Dell
 Throughout history, mankind has struggled to bring order to the apparent chaos that fills the universe. Thanks to the efforts of geniuses such as Galileo, Newton, Einstein and Feynman, we have systematically peeled away the shroud of mystery enveloping the universe that surrounds us, and have (literally) peered into the very heart of the atom itself. As the centuries pass, logic and reason have repeatedly triumphed over superstition and fear.
But still. A majority of people believe in ghosts. Every major newspaper runs a daily horoscope. People write to Dear Abby for advice even though she’s been dead for several years and is hardly in a position to comment on anyone’s girlfriend’s belly button piercing. Amid this ignorance, irrationality and confusion, there is a group of valiant men and women seeking to expand the dominion of order and discover the rules that guide our lives. These people are economists.
And, thanks to a couple of economists from Massachusetts, we might know a little bit more about how long a film will be showing at the local multiplex. A paper presented at the American Economics Association conference last January explored the factors influencing product exit strategies in the film distribution industry.
Basically, doesn’t it seem like there should be some formula for how long films last in theaters? A film debuts so big, receipts fall off at some given rate, and ba-da-bang! You should be able to know whether to rush out and catch that movie in its fourth week at the local Bijou, or else you’ll be seeing it for the first time on DVD.
[Note: for the rest of what I’m going to tell you about this paper, I’m going to simplify a lot, make definitive statements about stuff that’s still a little iffy, and probably make the authors pull their hair out if they ever saw me condensing their paper down to this format. If you care deeply, the original paper is in the May 2006 American Economics Review.]
The precise target of these economists’ investigation was the effect of competition on how long a film runs at a multiplex, both in terms of competing theaters owned by the same chain, and competing theaters run by a rival chain. Of course to investigate this phenomenon they had to include factors that affect the lifespan of a film’s release generally to see how competition changed the outcome.
Some factors were theater specific, such as how well the film was doing compared to other films also playing, and what percent of revenues were generated by a given film. Some were film specific, such as opening weekend revenues, the film’s “star power” (quantified by the good folks at The Hollywood Reporter) and whether the film contained “rising stars” (ditto). Over the course of their study (July 2000 through June 2001) an average film spent 3.5 weeks in a first run theater.
First, the “Duh” factors. The bigger a film’s opening weekend, the longer it tended to remain in theaters (but the impact is less than you‘d expect). Films that were making more than other films in the multiplex, and accounted for a greater percentage of the theaters receipts, tended to stay in theaters longer. No mystery there.
Films starring rising stars tended to spend less time in theaters than other films. Maybe kids all rush out to see the latest teen idol in a film’s first week and then don’t go back. Generally speaking, star power did not affect a film’s lifespan. Hmm, is it possible that Tom Cruise is overpaid?
Films showing at a theater in the Loew’s chain had a 20% shorter lifespan than expected. If the same film is showing at two members of a theater chain in a given area, the films expected lifespan drops 27%. The authors speculate this means the theaters loathe competing against a companion theater, so one will drop the film earlier than it would have otherwise.
On the other hand, if the same film is playing at a rival theater, expected life span increases by 12%. Competitors showing a hit film play a game of chicken, each daring the other to drop the film first so they can capture more of the remaining audience.
The overall conclusion is that factors internal to the film have little to do with determining how long a film stays in theaters. What does influence how long a film stays in a multiplex is a) how well the film is doing relative to other films and b) whether the film is playing at a nearby sister theater or at a theater from a competing chain.
Of course how well the film is doing relative to other films is based on any number of ephemeral factors. The names of the actors don’t seem to do much, but maybe the quality of the writing and direction do. Try convincing the marketing department of any movie studio that high quality, well-written films earn more in revenue than films starring the latest teen heartthrob and supported by a small fortune in advertising.
Quality beating out crass commercialism? Maybe miracles do happen after all. |
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