Box Office Forecasting

Forecasting Box Office of New Movies

Outline

Outline

• • • • • •

An Example Motion Picture Box Office – Background Data, Descriptive Analysis & Preprocessing The Linear Model The Piecewise Linear Model Forecasting

1

An Example

Avatar • • • • James Cameron (2009) Released on 12/18/2009 Pessimistic forecast by film critics Optimistic forecast by box office analysts • My prediction is $164 million • 1st week box office: • How well can you predict?

Background

Top Winners and Losers (2000-2001)

Top Winners

Rank 1 2 3 4 5 Title Shrek Cast Away Scary Movie Release date 5/16/01 12/22/00 7/7/00 Gross BO – budget $207.66M $143.53M $137.87M $137.04M $112.85M Title Town & Country

Top Losers

Release date 4/27/01 Gross BO – budget ($83.49M) ($69.74M) ($57.56M) (55.04M) (52.40M)

Monkey Bone 2/23/01 Red Planet Lucky Numbers Titan A.E. 11/10/00 10/27/00 6/16/00

How the Grinch 11/17/00 Stole Christmas Crouching Tiger, Hidden Dragon 12/8/00

2

Background

Profitability

 Making movies is a risky business, …

− not, only if you can forecast the box office

 In 2000-2001, out of 253 movies, 120 (47%) didn’t meet budget

Histogram of profit

100 90 80 70 60 50 40 30 20 10 0 120.00% 100.00% 80.00% Frequency Cumulative % 60.00% 40.00% 20.00% 0.00%

Frequency

Background

1st Week Box Office

 1st week viewership (box office) is a strong indicator

− Almost double the average week viewership − On average, 38% of its cumulative box office revenue

Avatar weekly box office

$160,000,000 $140,000,000 Weekly box office $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 0 5 10 Week 15 20

3

Background

Factors on Box Office

 What factor may have an impact?

Data

The Study • IMDB Database (publically available): 421 movies (12/99~6/01) • Forecast 1st week box office of new movies in U.S. • Factors to be considered

– – – – – – – Genre: drama, comedy, action, thriller, Sci-Fi, etc. Movie rating: PG, PG-13, R,...