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March 22, 2013

The ultimate question: Does viewer satisfaction drive box office results? Or perhaps it’s the other way around and box-office results drive the perception of quality? Are the two parameters related at all?

Here is a plot of the box office numbers vs. their Rotten Tomatoes scores (critics’ scores – figure 1; users scores – figure 2), for the 81 new movie releases from 2012 that were made with a budget of $30M – $200M and were released at more than 2000 screens:

Box Office vs Quality (Rotten Tomatoes CRITICS scores) -  for 2012 new releases reaching more then 2000 screens

Figure 1: Domestic Box-Office vs. Rotten Tomatoes critics’ scores for 2012 new releases reaching 2000+ screens

Box Office vs Quality (Rotten Tomatoes USER scores) -  for 2012 new releases reaching more then 2000 screens

Figure 2: Domestic Box-Office vs. Rotten Tomatoes users’ scores for 2012 new releases reaching  2000+ screens


The main point of these graphs is that they are pointless: it is obvious to the naked eye that there is no linear relationship here. (If you insist on scientific name-dropping, the r^2 values of the graphs are: 0.097 and 0.146, respectively – pretty miserable results). In other words: there is a very weak connection between a film’s quality and its box-office result for both critics and mass viewers (it might look like the scores are slightly higher for higher box-office, but the spread is just too huge to make that significant).

The conclusion I draw from these plots is that Hollywood’s marketing teams are very effective at the wrong kind of marketing. Something is causing people to watch bad movies just as much as they watch good movies. Sure, some films are niche productions and that may be true about a handful of them (like Moonrise Kingdom), but in general – all the films shown here have expanded their release to more than 2000 screens nationwide and therefore are not exactly tiny art-house productions.

And that is one of the core problems with Hollywood: if a studio has a mediocre movie and a free dollar, it would rather invest that dollar in superficial crowd-drawing elements like star-power or more P&A, rather than in improving the movie’s value proposition itself. This is not just an ideological problem – in the long run, it will cause viewers to lose trust in movies versus other forms of entertainment. Once viewers get burned a certain number of times by movies they pay for and don’t enjoy – they will shift an increasing percentage of their entertainment budget to more “honest” formats – be it Netflix/Amazon style recommendation services or other forms of entertainment altogether. These formats deliver what they promise more accurately. While I can usually return a product if it doesn’t work out for me, I can’t get my time and money back for a bad movie. Therefore, the manipulation of customers here is of much higher stakes, to the viewer – in the short run, but also to the industry – in the long run. And it could be devastating for the latter.

When the film “Taken 2” gets a Rotten tomatoes score of 55 from users and 21 from critics, while bringing in a nice $139.8M – it not only causes viewers to abandon the franchise. It also causes them to lose just a little more of the trust they place in the cinematic experience as a good value for their money (sure there are opposite examples, but there are much more examples than counter examples). One might claim that some movies did better because of “smart distribution” or just plain luck (like opening on an easy weekend), but that does not change the fact that people are starting to feel they have better ways to spend their time and money than at cinemas, which are disappointing them more and more often lately, with false expectations. Why would you stick to movies at the cinema for $13 a pop, when you have Netflix, Amazon, Xbox, Playstation, iTunes, Zynga or even the option to have a good old fashioned walk in the park?

The studios’ enemy is not rival studios or independent production companies. Their enemy is rival industries. If they keep investing only in manipulative marketing gimmicks and not in actual quality, originality and innovation, they will drag the whole industry down with them. Good strategic marketing is ultimately about getting more right products to the right customers. Not just selling more of whatever you’ve got.

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  1. Great post, interesting observations Stav. I agree for the most part and have some further insights i’ll share with you when I see you next.

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