Cognitive Hollywood: Data Reveals Box Office Economics in Turmoil
Yves Bergquist
70421

Yves, thank you for this analysis, it is a very thorough and interesting one to read.

Some comments, and your own article, have pointed out the impact that film budgets may have in the analysis, I know this data is not easily available but it would help contextualise the results further. In fact, I would be very interested to see the same analysis of correlations applied to studio films only. This would be closer (I mean the sample, not necessarily the results) to what the studio executives were referring to in their remarks.

It has attracted my attention that you use total box office in your analysis, but that metric is not a sign of success or failure of a film, so the conclusion may not necessarily contradict the studio executive’s assertion (which is talking about films that perform badly). This is another reason why I would check studio films, and I would add a metric for success or failure (even based on the inacuate but known budgets figures) and check the correlation against it.

Although it does not impact your analysis, I was surprised with your assertion that the market is shrinking, which is supported by a table showing data only up to 2014. That table actually shows an upward trend that is only broken in 2014 (2012 in the case of Entertainment, which actually goes up in 2013 and 2014), so without seeing what happened in 2015 and 2016 we can’t know whether is actually still shrinking. More so, the metric shown is viewing time rather than consumer spend (a more accurate metric to size a market, viewing time being a more suitable metric to assess consumer behaviour). I am making this point to try to contextualise assumptions I have read elsewhere that cinema or entertainment markets are declining.

Given that we are talking about cinema, I would look at that specific market first. Being an analyst myself, I do have the data to hand and worldwide BO in USD has grown on average 5% per year over the last decade, including over 5% in 2015, and only in 2016 there has been a small decline of less than 1% mainly due to Chinese box office slow down (this is another conversation, as there are local reasons for this such as removal of discounts and exchange rates). And to remove exchange rate impact, if we look at admissions these have also grown in the last 5 years, including 2016. I hope this helps at least with that point.

Thank you again for the analysis.

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