Movie attendance peaks during the holiday season, and studios capitalize on this by releasing dozens of new titles between the end of November and the new year, with much of a movie's box office success predicted by opening weekend.
Though it would seem that studios have little control over public reaction to their movies, a new study by Pradeep K. Chintagunta of the University of Chicago Booth School of Business reveals some factors that studios can control to boost how their movies perform at the box office, particularly in local markets.
The study appeared in a recent issue of Management Science.
Chintagunta, together with Shyam Gopinath of the University of Utah, and Sriram Venkataraman of the University of North Carolina at Chapel Hill, examined the pre- and post-release performance of 75 movies released in 2004 in 208 geographic markets in the United States across three measures: nationwide consumer- generated blog volume; blog "valence" -- a positive or negative sentiment written by a blogger -- and studio advertising.
The study revealed that gender, income, race and age of the local population are the biggest indicators of how a movie will perform in individual markets.
Among the study's most notable demographic findings:
Taken together, these findings suggest that studios engaging in spot advertising may want to reduce their advertising in markets with higher income, as well as those with more women and more young consumers. Furthermore, markets with larger white populations are more sensitive to advertising -- studios might want to direct more advertising in these markets. At the same time, markets with large white populations are less sensitive to blog valence.
Notable findings on specific geographic preferences include:
These rankings can provide studios with information on how to target release markets, especially if a movie is in limited release. For instance, if a studio wanted to generate pre-release buzz by having special events around a movie, Chicago and Denver would be smart markets to choose. And if a studio wants to market its advertising more judiciously, cities like Charlottesville, Virginia, or Marquette, Wisconsin, are smart bets.
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