Case Study on FIlm Industry Essay Example

Case Study on FIlm Industry Essay Example Case Study on FIlm Industry Essay Case Study on FIlm Industry Essay Essay Topic: Batman Film is a large multi-billion dollar industry in the USA and worldwide overall. Compared to other industries it has a very unique characteristic. For example when it comes to the real estate, fashion, cars consumer cost will always reflect the cost of manufacturing. If Nissan spends less on manufacturing a car, it will charge less than what Rolls Royce would. This rule doesnt hold in the movie industry. When a person goes to a movie theater they have a wide variety of choices and the price for all the movies is mostly equal or has a very small range. So if its not the price, question tands what drives consumers to chose film A over the film B? With the sample data obtained from 100 motion pictures produced in 2005 it is possible to investigate which factors affect movie attendance. Analysis of variables such as Opening Gross Sales, Number of Theaters, Weeks in Top 60 and Total Gross shows the overall shape and tendencies of this business, while the correlation between them helps to determine which factors contribute to success of a movie and bring in the highest income. Descriptive Statistics show that the Film Industry is highly variable and influenced by a few highly successful blockbusters. Measure of Location Measure of Variance Variable Mean First Quartile QI Median Q2 Third Quartile Q3Range standart Deviation opening Gross sales 9. 37 0. 06375 0. 39 12. 43025 108. 43 18. 87470211 Total Gross sales 33. 04 0. 40275 5. 85 47. 43475 380. 15 63. 16469269 Number of Theaters 1,277. 94 45. 75 410 2626. 5 3905 1378. 689444 weeks -rop60 8. 68 3 7 13266. 389511608 Opening Gross Sales represent how anticipated and well received the movie is. Of the 100 movies the mean opening sale is $9. 38 million. However the median is only $ 390,000. This means that 50% of the movies received $390,000 or less. The mean was affected by the top selling movies. Top 25% that have received $12. 43 million or more in the opening week. The sales are highly variable and range from very low $10,000 to $108. 44 million. Movies that receive higher Opening Gross Sales are the ones that the public is aware of, these films are usually well advertised on TV, written in magazines etc. This means that the movies with a higher budget can do a better Job at creating a hype and starting their opening week very successful. Number of Theaters is a good measure of the popularity of the movie and a potential indicator of high sales. The more demand from the viewers, the higher the supply of theaters available. The mean number of theaters is 1277. 94 and its way larger than the median that is 410 theaters. The data is highly variable, few movies have only been shown in 3,910 theaters. 5 theaters while bigger blockbusters were screened in as many as Number of Weeks in Top 60 is another measure of popularity. The longer movie stays in the top charts the longer it will be airing in theaters and bringing the income. The mean number of weeks in the Top 60 is 8. 68 weeks. 50% of the films were on top 60 list for 7 weeks or less. The top 25% movies were on a chart for 13 weeks or more. This data is also highly variable since it ranges from 1 to 27 weeks. It is The longest time spent on the chart belongs to The Wild Parrots of Telegraph Hill. Total Gross Sales indicates the overall amount of money the movie has made. Just like the opening gross sales, the Total Gross Sales Amounts are highly variable, they range from $30,000 to $380. 18 million. 25% of the motion pictures had the Total Gross Sales of 400,275 or less, 50% sold 5. 85 million or less, and 25% had 47. 43 million or more. This is the best measure of the success of the movie, because higher he income from a movie means that all the elements that make up a film were well received by public Total Gross Sale is the best indicator of the success of the motion picture. Film is Just like any other industry and it is designed to generate income. Opening Gross Sales, Number of Theaters, Weeks in Top 60 all are good indicators of popularity of the film; however the main purpose of these there variables is to translate into a good income. Now the question stands, which one of these three variables correlates best to the high Gross Sale? Total Gross Sales and Opening Weekend Gross Sales Correlation Coefficient . 964251784 Total Gross Sales and Number of Theaters Correlation Coefficient 0. 709858186 Total Gross Sales and Number of Weeks in top 60 Correlation Coefficient 0. 525394855 All three relations have a positive correlation. The films with the higher Opening Weekend Gross Sales, Number of Theaters, or number of Weeks in the Top 60 will all have a higher Total Gross Sales. The highest Correlation Coefficient is 0. 96 which means that the Opening Weekend Gross Sales are the best predictor of the Total Gross Sales. However all three have a high number, so a successful filmmaker should target success in all three areas. Strong relationship between Open Week and Total sales is further reinforced by an example with extreme outliers. In this research the outliers are defined as follows: QI-I . (lQR) is the level, below which a movie will be considered as a Low Performance outlier Q3+ 1. 5(lQR) is the level, above which a movie will be classified as a High Performance outlier. Number of Theaters Q3+ 1. 5(lQR) = 2626. 5 + 1. 5(2626. 5 45. 75) = 6497. 625 theaters No extreme outliers present in the data set. Number of Weeks on the Top 60 List Q3 13+ No extreme outliers present in the data set. Opening Weekend Gro ss Sales Q3+ 12. 43 + 1. 5(12. 43- $ 30. 85 million Extreme outliers: star Wars: Episode Ill ;Harry Potter and the Goblet of Fire War of the Worlds; Wedding Crashers; Batman Begins; Mr. nd Mrs. Smith. Total Gross Sales Q3+ 47. 43+ 1. 5(47. 43- 117. 975 million star wars: Episode Ill ;Harry Potter and the Goblet of Fire War of the Worlds; Wedding Crashers; Batman Begins; Mr. and Mrs. Smith. Opening Weekend Gross Sales and Total Sales are the same six blockbusters. These movies had more than $30. 985 million in the Opening Weekend and more than $ 117. 975 million of Total Gross Sales. Film Makers should be determined to achieve a High Opening Weekend Sales, since it reatly correlates to the overall success of the movie. Advertising, PR, Marketing not only do good Job at informing but also have a very big influence on the viewers tastes, thus they are good tools to use to push up the Opening Week Sales. Unfortunately the Hollywood Films with higher budgets can afford such publicity. Smaller independent filmmakers tend to have less viewers. So even when the budget of movie doesnt affect the consumers choice directly, it does so in an indirect way. Other variables shouldnt be overlooked as the Number of Theaters and Weeks in Chart have a positive impact on the Sales as well.