When you think of the business of movies, what comes to mind? The millions of dollars that big-name actors earn from blockbuster releases? Or, if you’re up on your media and entertainment industry trends, you might be curious about the lineup of NFT-sponsored events, parties and panels that are adding a whole new creative crypto vibe to Hollywood.
In reality, the business of movies is much broader in scope. Professors at the Wharton School have long been researching and measuring parts of the movie-making process to improve how Hollywood operates. For example: how can movie executives predict whether a film will be a hit or a flop? Or what is involved in marketing movies effectively?
Jehoshua Eliashberg, Wharton’s Sebastian S. Kresge Professor Emeritus of Marketing and Professor Emeritus of Operations, Information and Decisions, as well as Wharton marketing professor Jonah Berger, are among those business school researchers who have used analysis to understand the business of media and entertainment.
In a recent Knowledge@Wharton podcast, Professor Berger described his research-driven approach to the business of movies like this: “Often, we watch movies and think it’s just some magic, creative process where things gel together and there’s no way to understand whether it will succeed or fail. That’s not exactly right. It feels like magic…But there’s a science. [For example], we can understand the science of stories, of content more generally, by understanding the progression of ideas. By using tools that have recently become available…we can shed a light on some questions that might otherwise seem impossible to uncover.”
Here are 3 ways that Professor Berger and Professor Eliashberg have brought science to the movie industry through their academic research:
🎥 In a study titled “How Quantifying the Shape of Stories Predicts Their Success,” Professors Berger and Eliashberg (along with co-author from Columbia University, Olivier Toubia) figured out a way to measure language in movies, TV shows and academic papers to determine what makes some narratives more successful than others. They measure three things: speed (how quickly do you deliver the ideas in your story?), volume (how much total ground do you cover in your story?), and circuitousness (How direct are your ideas?), applying them to thousands of texts and examining if and how they are linked to success. Says Berger: “As marketers, as leaders, as others, these findings really help us think about how to better lay out the content — whether that content is a presentation, an argument, a speech — in a way that will impact the audience. Should we try to cover a lot of ground or relate the ideas more closely to one another? If we’re covering the same ground, should we use a very direct path or more of a spiral, where we go back to the same ideas again and again to deepen the understanding around those things?”
🎥 Professor Eliashberg has spent his academic career developing models and methodologies to solve business problems, with particular interest in media and entertainment. His most recent research, conducted with the help of Wharton marketing doctoral student Yi Liu, looks at the role of trailers (pre-launch campaigns that get you excited about watching a movie or some other media) and the economic value of the comments that they generate. Eliashberg studies a dataset of 363 movies released between 2014 and 2018. The authors write: “Trailers are commonly employed in the pre-launch campaigns of new products as an advertising tool to generate awareness and interest among the potential audience. In this paper, we argue that such trailers, whose costs range and are rising, should also be considered as a…tool having additional economic value. The incremental value is driven by the audience comments data that the trailer of a new product generates.” What is the value of that commenting buzz? Potentially hundreds of thousands of dollars. Stay tuned for more details as the paper hits publication.
🎥 Are you starting to see how business research can inform all dimensions of the Hollywood dazzle and help studios make smarter decisions? In the past 30 years, Professor Eliashberg has published numerous papers in such academic journals as Management Science, Marketing Science and the International Journal of Research in Marketing. Titles include: “From Story Line to Box Office: A New Approach for Green-Lighting Movie Scripts,” and “Of Video Games, Music, Movies, and Celebrities.” A few years back, Wharton Business Daily on SiriusXM invited him and a research colleague to talk about the economics of arguably the most important ceremony in the movie industry, the Oscars. The question posed to them: Can you measure the financial benefits of winning an Oscar at the Academy Awards? Eliashberg’s assessment? “In terms of the profitability of the movie, I think we have to distinguish here between two time periods: The time that the movie is nominated to the Oscar, all the way to the Oscar event, and the time that the winners are announced. From the data that I’ve seen, it is the nomination that gives rise to the box office, more than the actual winning of the movie.”
What are a few ways that academic research can inform all dimensions of the Hollywood dazzle and help studios make smarter decisions?
If you could explore aspects of the movie-making business, what would you want to learn? What would be the thesis for your academic research?
Have you experienced a media and entertainment internship like Lauren M.? Tell your story in the comments section of this article.
Trailers are gaining increasing importance in the marketing campaign of films. I can attest to that.
As an amateur filmmaker, I witnessed firsthand how the fast-growing trailer industry became highly commercialized. During my internship at the marketing department of CMC Pictures, a company that distributes China-produced films in overseas markets, I saw detailed divisions of labor and multiple commercial analytical tools used to achieve the greatest possible business outcome — that is, a successful trailer.
Previously, I saw trailer-making as a simple job — an uncreative editor merely taking clips from a film to tell a fragmented story and wow the audience.
I was wrong.
Here’s what I quickly learned: While entirely different from moviemaking, the trailer industry also requires absolute creativity and close collaboration.
I was on the trailer creation and market monitoring teams simultaneously. We started by trying to get inside the director’s head and examining how the film made us feel. By absorbing the music, studying the film’s pace and understanding the tone, we tried our best to replicate those elements in the trailer.
This is where creativity and collaboration kicked in and made all the difference.
To create an entire film, the creative directors and producers oversee the process; editors must figure out how to make each shot work; assistant editors will catalog and organize everything for editors to use; music supervisors will select the perfect piece of music or sound design.
Ideally, a film would appeal to various age and gender groups. But certain genres appeal to certain demographics more easily, and which group/groups to target is a tough marketing decision that involves grueling discussions among the whole crew.
But just like each film is unique, each trailer must be unique as well.
Whereas making a movie is like telling an epic, creating a trailer is like writing a composition on a given topic whose score is measured by box office figures.
Since the trailer is the audience’s first look at the film, filmmakers need to tell a compelling story in less than 2.5 minutes, a demanding job involving endless rounds of editing until one gets to the heart of the story.
This is where different types of trailers will do the trick.
Among the different types are “star trailers” and “story trailers.”
Star trailers feature the cast, director and producers, telling the audience to expect some big names in the film. Big names often imply bigger budgets that can move the film up the box office charts.
Meanwhile, story trailers are more fun to make but can be the most brain-racking as they demand getting to the film’s core and showcasing some of its best assets. What to reveal — and what to hold back — is more complicated than it looks.
In a story trailer, we wanted to unveil the film’s central narrative elements to the audience without spoiling the plot. Easier said than done! Selecting the best elements to illustrate the main narrative can sometimes be tricky in stories with lots of suspense.
Completing a trailer finally brings us to the core of the trailer business — promoting it and monitoring audience feedback.
Like Professor Jehoshua Eliashberg and Yi Liu concluded in their research paper “On the Role of the Trailer as a Marketing Research Tool: The Economic Value of the Comments It Generates,” trailers should be viewed as a tool to create additional economic value. The film industry, through the years, has reached a consensus that positive audience feedback and growing behavioral data generated from trailers often lead to incremental box office sales.
The first few trailers, or focus trailers, are pushed to the market as experiments in different stages of the marketing campaign. As the name suggests, we try to test how audiences react to different elements. Are they more interested in the superstars or intrigued by the story? Are they blown away by the sound and visual effects?
Then it’s time for a quantitative and qualitative analysis of the collected feedback. A list of elements will be generated according to their popularity rankings. These become the most critical criteria in selecting elements and materials for the most crucial trailer, namely the one that gets aired shortly before the film’s official release and has proven to be the most effective in stimulating ticket sales.
While I used to be solely focused on captivating audiences during filmmaking, there is more to this complex industry than meets the eye. I quickly learned that moviemaking is in constant flux, and trailers are pivotal in moving the business forward.
This is indeed something to keep in mind if you are interested in the film industry.
Zizhou, thank you for sharing your experience with movie and trailer making! I thoroughly enjoyed reading your thought process into creating a unique movie trailer during your internship. I’ve noticed many movies have different trailers but I didn’t realize that it was just a marketing ploy to gauge the audience’s reaction to each one. I especially liked the analogy you made of comparing a creation of a trailer to a writing assignment as it highlights that a trailer needs to be constantly refined and improved in order to have a “high score” which is determined by the audience. I’ve noticed that when going out for a movie with friends they usually check the Rottem Tomatoes ranking or IMDB rating before buying tickets which really shows how important a score is to viewers.
I strongly agree with your point on how films need to attract a certain demographic whether it be race or age. The fact is that some things will attract some people while others won’t. Everyone has their own preferences and that can’t be changed. This has happened numerous amount of times in my friend group where we’ve often changed the movie we’re going to watch based on the preferences of some. The decisions that the movie crew makes are usually favored towards making a profit and it can affect what kind of audience views it.
A comment that particularly stood out to me was, “But just like each film is unique, each trailer must be unique as well.” It may seem obvious, movies should be unique to succeed and make a profit. However, once you take a deeper look into the movie industry as a whole it becomes clear that we are headed in a direction where movies will no longer be unique but rather stale and generic. We see this play out in this article, where we see Professor Berger describe his approach to the business of movies as a “science”, like how there’s a formula to what makes a successful movie. If all movies follow the same model, how are they any different from each other? I’ve seen this happen with many of the movies that I’ve watched. Almost every single time, the main character goes through some sort of sacrifice or hardship, and in the end, they get a happy ending. It seems that the critics love this sort of trope since they all had decently high ratings. If companies just want to satisfy the critics so they give high reviews to gain a bigger audience, isn’t that only playing to the critics’ preferences? A movie “score” shouldn’t be affected by only the critics but should be debated by its audience.
On websites such as Rotten Tomatoes, we are able to see what movie critics and the general public rate a certain movie. Almost always, the score differs between the two. Yet what matters most is the amount of money the movie makes. In a research article written by Timothy King published the Journal of Cultural Economics, the data shows us that “critical ratings were indeed positively related to gross earnings.” The audience is affected by critic ratings but they may or may not have enjoyed the movie as much as the critics have. A solution to increase both profit and enjoyability from the public is to diversify the critics themselves. By showing the film to a larger demographic of critics (and assuming that they write positive reviews), then those demographics are more likely to enjoy that film.
If movie companies all follow this “science” for higher box office revenue and profit, then the magic of going to the movies is long gone. Critics only make up a small percentage of moviegoers but what they write greatly affects whether we watch something or not. Whether we enjoy a film they write positively about is what truly matters. In my opinion, movies are not something to be analyzed but rather something to pass the time with friends or family, something that you can be entertained by. Zizhou, I wish you the best of luck with your future in the movie industry and I hope you can put some of my words to good use!
As a huge movie critic, I think movie producers should focus on balancing the movie with the hype. Being humble about your movie is one way to go. Don’t overhype a movie that you think won’t be as big of a hit you think it would be. Rather, hype the movie in such a way it matches the reality and not create false expectations. I feel that it’s okay to overhype the movie a little bit in the trailer just to gain that attention, but if you drown your movie in hype, the expectations do not meet with those of the public. Movie producers tend to include some type of emotional scene for the audience to see, but it doesn’t exactly always hit the audience the way you want it to. To make the audience actually care about an emotional scene is to get them indulged in characters’ lives. Building up to one of the most important scenes(not the climax, just a huge scene) in a film is going to be a big hitter to the audience and will create buzz among the movie critics.
Something that most films do a great job on are trailers. The pre advertisement is super important to get the most attention to your film, and If you can craft a well filmed trailer you will generate a lot of money on release date. The box office isn’t scary; they’re simply just there to sell the tickets and to collect the revenue made from a movie. To generate the most money from the box office? There’s a lot that goes into it. Generally, sequels to very famous movies or trilogies make the most amount of money in the box office, but there have been a few single standing films that have pulled out on top. A method most producers use to create a high grossing film is to make the film based off a true story and recreate the timeperiod faithfully through detailed efforts. Research on favorite genres, favorite actors, and even favorite movies could all give the producer ideas on how to make a blockbuster film.
It is best to have a screen writer and a director who has past experience in decently high grossing films as they woud know what they’re doing and will also pique the interest of die hard movie fans who study and know many directers, music producers, and screenwriters. These experienced movie makers could give a movie a bit of a jump that some other movies might not have.
The current problem with the movie industry is that too many films are being introduced but almost none of them are popular and have not raised that much money. There has been a few here and there that raised quite the amount of money.
The way the movie industry is going right now, It seems to be doing okay. There have been a few mediocre movies here and there but then there have been some huge hits like “Top Gun: Maverick” which has raised almost as much as “Titanic” had. Producers nowadays have some good films in the making and I hope that the film industry continues to grow especially with many new phases being added to big hit studies like “Marvel” which should definitely create a stir within the film communities.