In this report, we discuss the relationship among the four variables which are commonly used to measure the success of a motion picture and establish whether there is a coherent correlation from one variable to another. As “industry practitioners rely heavily on tradition, conventional wisdom, and simple rules of thumb, which often have not – but should – be closely examined” (Eliashberg, Elberse, & Leenders, 2005 p.1), there is a need to perform more studies and produce reports such as this.
The study is organized around the four variables commonly used to measure the success of a motion picture: the opening weekend gross sales, total gross sales, number of theaters the movie was shown in, and the number of weeks the motion picture was in the top 60 gross sales. The data used in this study is based on a sample of 100 motion pictures produced in 2005.
We first focus our attention on the films which have total gross sales of over $100 million. As there are only seven films on the sample which gross sales range from $113.63 million to $380.18 million, it is more straightforward to evaluate the variables involved and confirm if there are any correlations. The information suggests that the average opening weekend gross sales of the seven films is $63.36 million, with two films surpassing the $100 million mark (Star Wars Episode 3 and Harry Potter and the Goblet of Fire). However, because of the presence of the two significant performers, the median of $50.34 million (Mr. and Mrs. Smith) as a measure of central tendency for the variable opening weekend gross sales is more robust. Meanwhile, four of the seven (57%) films’ weekend gross sales are at least 27% of their total gross sales, which suggests that a high opening weekend gross sales led to high total gross sales.
Looking at the other two variables, all seven films were shown in more than 3,000 theaters, with an average of 3,576 theaters. These figures also suggest that a high number of theaters the film was shown in led to high total gross sales. On the other hand, the number of weeks that each film stayed in the top 60 reveals interesting figures, with the Wedding Crashers, as the median in terms of the total gross sales ($209.22 million), staying the longest – 23 weeks – in the top 60. While Harry Potter and Walk the Line, the second top and the last in gross sales consecutively, sharing the shortest time of 13 weeks. We can therefore infer that the number of weeks the motion picture was in the top 60, in 2005, does not correlate with any of the variables.
Further evaluation of the data suggests that our suppositions for the highest grossing films in 2005 are applicable to the whole sample. In terms of correlation among variables, weekend gross sales and the number of theaters the movie was shown in are connected to the total gross sales of the motion picture, in 2005. Meanwhile, the number of weeks the motion picture stayed in the top 60 has no effect on the total gross sales of the motion picture, in 2005.
What does the above information tell us about the motion picture industry? Firstly, it shows that the length of time a motion picture stays in the top 60 is not an accurate measure of how well the film did in terms of sales, and therefore the least important of all variables involved in this study as far as total gross sales is concerned. On the other hand, the number of theaters the movie was shown is equally important a variable as the opening gross weekend sales, as they are both directly correlated with the total gross sales.
This report has established that only three of the four variables commonly used to measure the success of a motion picture in 2005, are coherently correlated. Therefore there is a need to re-examine the use of certain variables in measuring the success of a motion picture. We hope that this report provides the starting point for such research.
Eliashberg J., Elberse A., & Leenders M.A.A.M. (2005). The Motion Picture Industry: Critical
Issues in Practice, Current Research & New Research Directions. Retrieved from
http://www.hbs.edu/research/pdf/05-059.pdf
Sawhney, M. S., & Eliashberg, J. (1996). A Parsimonious Model for Forecasting Gross
Box-Office Revenues of Motion Pictures. Marketing Science, 15(2), 113-131.
