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Photo by Delphine Queme, via Flickr

COGNITIVE HOLLYWOOD, Part 1: Data Shows Box Office Economics in Turmoil

Yves Bergquist
Sep 11, 2017 · 12 min read

Box Office Hurricanes As Evidence of a Change in the Entertainment Climate

Hollywood CFOs are closing out the Summer, and it’s a Lannister kind of party. The worst Labor Day Weekend performance in 17 years; a bloodbath Summer box office in a near 20% retreat compared to 2016; bulletproof franchises underwater; even the mighty Dwayne “the Rock” Johnson took a beating. Summer 2017 was an Irwin Allen disaster.

Debunking the Rotten Tomatoes Myth, With Data

Barnes’s piece was pretty high on posturing and pretty low on actual data. So, being the resident data scientist at the ETC, I decided to see what the math said.

What is clear, looking at all film data since 2000, is that Rotten Tomatoes scores have never played a very big role in driving box office performance, either positively or negatively.

Overall, Rotten Tomatoes scores for all movies grossing more than $2 million have been pretty stable since 2000. The median score was 51 during the 2000s and 53 during the 2010s so far, and it’s actually gone up quite significantly from 2015 (46.5) to 2017 (71).

Does a Rotten Tide Raise All Boats?

So Rotten Tomatoes Scores are going up, together with the median box office (adjusted for inflation), which has increased, from $26.6 million in 2015 to $66.1 million in 2017. But does the fact that Rotten Tomatoes scores and financial performance have both gone up suggest a relationship between the two variables?

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Audience scores and critic scores are increasingly correlated, meaning that audiences are becoming expert at smelling a “bad” movie and staying away.

Indeed, the data shows a very strong correlation between Rotten Tomatoes scores and audience scores (also reported on the Rotten Tomatoes website) for all films (that grossed more than $2 million worldwide) released since 2013:

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Imagine running a company in a shrinking market where every product costs hundreds of millions of dollars to make, where every single one of your customers is an expert in the product, and millions of competitors are offering free, lower-quality but very accessible and compelling knockoffs.

And that’s not even the worst of it. The worst part is that, as a studio executive, you know next to nothing about who these customers are, what they want, or why they like your product. That’s Hollywood.

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The left column represents hours spent per day

RIP: the Good Old Days

Let’s make this as clear as possible: no Hollywood executive knows why you liked War of the Planet of the Apes, or why Game of Thrones is one of the greatest successes in the history of entertainment. Creative decisions across the entire industry are still largely made on the intuition of a handful (no more than 50) of executives who rely less on data and more on the cognitive models developed over decades of bone-crushing experience making movies.

Nobody ever got promoted in Hollywood because they had better inside knowledge of what audiences wanted to see, simply because, until fairly recently, that didn’t matter. The industry had an unassailable stronghold on our leisure time, and so the factors of success were, for the most part, intrinsic (the product), rather than extrinsic (the market).

This is why, as CGI opened the door to a much more immersive form of storytelling, and the landscape became more and more crowded with smaller and more nimble competitors (Miramax, Lionsgate, etc.), median production budgets surged: from $8 million (inflation adjusted) in the 1970s, to $22 million in the 2010s.

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  1. There’s definitely a lot of volatility in the scores, regardless of the production budget, meaning there are hidden variables (beyond budget) influencing scores;
  2. It’s very clear that production budgets do have a very substantial impact on both critics and audience scores. Here again it seems Hollywood’s bet on CGI has largely paid off.
  1. Audiences are becoming extremely adept at predicting and judging the quality of a film;
  2. Quality here is a very subtle measure of how much, and where, a film innovates in its story and character mechanics, and how much — and where — it doesn’t.

Vantage

Perspectives on Visual Storytelling

Yves Bergquist

Written by

Machine Intelligence Warlord. Founder & CEO of AI Startup Corto. Director of the AI & Neuroscience Project at USC’s Entertainment Technology Center

Vantage

Vantage

Perspectives on Visual Storytelling

Yves Bergquist

Written by

Machine Intelligence Warlord. Founder & CEO of AI Startup Corto. Director of the AI & Neuroscience Project at USC’s Entertainment Technology Center

Vantage

Vantage

Perspectives on Visual Storytelling

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