The Art of Predicting Box-Office Gold

Tweet

Accurate prediction is never easy.

In Hollywood — like the ESPN-dominated sports world — pundits and analysts feed off the hype that precedes the latest blockbuster news. On Dec. 18, that frenzy reached a fever pitch as Fox’s Avatar hit screens and both studio execs and otherwise indifferent moviegoers found themselves speculating whether the epic could ascend to Titanic-like heights in ticket sales.

Seizing upon this casual interest in following movie returns, third-party box-office analysts were quick to post their (educated) predictions for the first weekend’s results. These prognosticators, out of professional pride, financial incentive or mere enthusiasm, sought to accurately answer one question: How much money can this near $300 million investment rake in on opening weekend?

We heard $80 million, $75 million and $73 million, the near-spot-on forecasts by three of the leading box-office experts. They came tantalizingly close to the actual number of $77 million for the first weekend haul.

How, exactly, did these professionals manage to tap the pulse of America’s moviegoing public? Simple: These analysts know film history and can discern the real value of tangible “buzz.” (And data-crunching proprietary technology certainly helps.)

As the founder of a popular movie hub, BoxOfficeProphets.com, David Mumpower has made some errant predictions, hedged his bets on plenty of hits and has witnessed the truly breakneck speed at which moviegoing patterns have shifted in the last 10 years.

But unlike a newly converted fan cheering on films like Avatar during office “water cooler” debates, Mumpower never really lets hype overtly color his predictions. Instead, like other box-office professionals, he tends to rely on an odd compendium of historical knowledge and his own estimation of the “perceived quality of the film” to sift through the murky field of new releases.

“Historical modeling helps quite a bit, but at the end of the day, a lot of what I do is predicated upon instinct. It’s usually not hard to tell the winners from the losers,” he elaborated. Mumpower predicted an $80 million opening weekend for Avatar.

Separating the “winners” from the “losers” based on historical modeling is much easier said than done. For example, as a special-effects-laden December blockbuster, Avatar may be likened to the 2007 holiday smash I Am Legend merely by associating the similar genres, release dates and studio expectations (hint: very high) of the movies.

Indeed, that model held up well in the first weekend of Avatar as it grossed a near identical sum ($77 million) as the Will Smith action flick over the same period two years ago. But the James Cameron spectacular has sailed well past the final tally of I Am Legend ($256 million), so the modeling comparisons have ended pretty quickly (New comparison: Titanic).

Neither Mumpower nor his team of analysts uses anything approaching scientific formula, and while they don’t dismiss it, they really don’t see any advantage. “While new metrics are always at least temporarily engaging, all of them are flawed in some way or another,” he said. “Historical analysis combined with gut instinct and awareness of consumer behavior remains the best way to estimate box office.”

But considering the changing moviegoing trends over the past decade, historical modeling isn’t worth nearly as much as it used to be. “The media climate is constantly changing, and you can’t really put too much weight on any one factor,” explained Phil Contrino, the editor of Boxoffice magazine. “You have to pay close attention to the way buzz evolves.” (His site predicted a $75 million opening for Avatar.)

Monitoring buzz can be an arduous task. In the lead up to a tent-pole release, buzz can take many forms: comments in forums on movie sites like IMDB or Ain’t It Cool News, tweets, posts on Facebook or blogs and early opinions by traditional media like Variety and The Hollywood Reporter.

This vast amount of sometimes useless information would be impossible for any one analyst to keep up with, which is exactly why some professionals have developed technology to gather, sift through and intelligently dissect these disparate opinions.

Boxoffice magazine’s “Internet listening technology” will soon go public with the aim to compile the “market share of opinion” that exists online prior to film’s release. According to the magazine’s publisher, Peter Cane, the technology will “track millions of comments from over 70,000 online sources” with artificial intelligence that will be able to interpret and sort these comments accordingly. The result will be an in-depth account of exactly what buzz forecasts for a film’s box office.

Human analysts will still have to interpret how this data from this yet-unnamed technology translates into specific weekend grosses, but the data itself might prove to be an invaluable asset for accurate, real-time movie data.

“We never hedge our bets,” Contrino said. “I don’t see much value in telling our readers that something ‘has a shot at grossing more than $100 million.’ Our method is definitely scientific in a lot of ways because we assign different values to a number of factors from pre-release buzz to the drawing power of a particular star.”

Combining this type of scientific modeling with a touch of “conventional Hollywood wisdom” is Bruce Nash, of the financial tracking site called The Numbers. Using a historical database of “about 13,000 movies for which we have financial data” and computer modeling that includes budget, cast, advance ticket sales and other factors, the site provides both “scientific” analyses for private clients and “traditional” estimates (using more qualitative, i.e. gut methods) for online readers.

“Many of the predictions that we see seem to be based on a mixture of internal studio projections and “conventional wisdom” in Hollywood,” said Nash, whose site predicted $73 million for Avatar‘s initial weekend. “The big differentiator on our models is that we use only numerical analysis to derive predictions, and we predict all aspects of a movie’s financial performance [using this model].”

While statistical analysis through “scientific” modeling is gaining adherents in the industry, the importance of advance Internet buzz (dubbed by some pundits as “the fanboy effect”) can often be overstated. There are far more moviegoers than frequent Internet users, and sometimes riotous buzz online can largely be imaginary offline.

A new study by Yahoo Inc. researchers tried to determine if the amount of search counts (how many times a specific word is typed into a search engine) could predict a movie’s opening weekend gross. While Jake Hofman, the corresponding researcher, doesn’t believe that search counts alone can accurately predict box-office totals, he does believe they can provide a “marginal increase in performance” and supplement traditional box-office models built on budget data and theater counts.

Perhaps the most prominent example of box-office analysts relying too much on internet buzz came in 2006 with the release of Snakes on a Plane. After a groundswell of Internet enthusiasm for the movie, many professionals predicted a $40-plus million weekend for the cheap disaster film. It ended up thudding into theaters with $13 million for the weekend. Samuel L. Jackson’s hopes for a well-paid sequel went out the window and experts learned this valuable lesson: online hype can be much different than true word-of-mouth.

“Box-office prediction still remains a bit of a black art,” said Reagen Sulewski, an analyst at BoxOfficeProphets.com. “If anyone really knew for sure what was going to happen, there wouldn’t be quite so much executive turnover at studios.”

For now, the greatest assets that professionals can tap are mostly intangible: an intricate knowledge of box-office history, an eye for spotting a potential bust or bomb by sizing up trailers and promotional materials and a knack for dissecting — or disregarding — the mountains of Internet data shoveled before them.

“I had been expecting an $80 million opening weekend for Avatar for a long time,” David Mumpower wrote. “This time, that proved to be relatively accurate as the film debuted to $77 million, but we all have our hits and misses. Please don’t ask me about Charlie’s Angels: Full Throttle.”

Sign up for our free e-newsletter.

Are you on Facebook? Become our fan.

Follow us on Twitter.

Add our news to your site.

Tweet