Task 1 – Quantitative Market Research – box office numbers

1. By looking at the Numbers international records chart, it’s easy to gather that, over the last decade or so, the most profitable films worldwide often belong to a franchise (e.g. Harry Potter) or trilogy (e.g. The Lord of the Rings) and that it is always the final installment that rakes in the most capital, for example, Deathly Hallows Part II at number 4 and The Return of The King at number 6.

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Another intriguing factor is that a lot of the top grossing films are based on source material, such as The Dark Knight trilogy being based on the comic book world of Batman and Skyfall being an extension of the James Bond universe created in the Iain Fleming novels. The most importantly, almost all of the top grossing films are produced by major companies and are backed by large budgets. Only at number 81, The Passion of the Christ stands as the highest grossing independent film with $622,420,667 worldwide, made possible by Mel Gibson funding the project himself.

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2. According to the Records, the top 5 grossing American films, in order, are: Avatar, Titanic, Marvel’s The Avenger’s, Iron Man 3 and Transformers: Dark of the Moon. What this tells us about the relationship between international audiences and genre is that big budget, action-based Superhero franchises are huge attractions, perhaps because they ensure entertainment, immersion and visual spectacle. Transformers and Avatar also hint at a massive attraction to CGI-based Sci-Fi where artificial locations and characters thrive. Having Avatar and Titanic both at the top, and both directed by James Cameron, suggests that the huge reception of the earlier film influenced the box office takings of the second. Both films also gained notoriety for pushing new technology to the limits.

Titanic

3.  The top most profitable cast & crew members in the industry are Steven Spielberg, Johnny Depp, Tom Hanks, Tom Cruise and Adam Sandler. This tells us that the industry is very much motivated by star-power and that, at least in mainstream films, stars are the most important attraction to cinema-goers and, thus, the most important profit factors. As a result, the most famous actors will often be given a portion of a film’s profits at the box office. Despite the power of Stars, Steven Spielberg is the most profitable person in the industry. This is due to his extremely successful reputation as a long-term mainstream director, who has produced many ‘modern classics’ (e.g.ET, Jaws)  which thus makes him just as attractive to film-goers as a lot of actors. His films are always anticipated as ensured quality, which thus ensures box office profit.

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4. Since 2002, annual cinema ticket sales have dropped from above 1, 500, 000, 000 to roughly 1, 300, 000, 000. This is subject to the development of the internet which has allowed for an increase in online piracy and, particularly in the last 3 years, streaming services such as Netflix, Love Film and the iTunes store. These services had made it even easier to watch films in the comfort of your own home, especially as a computer can suffice for a TV to use the services. The rise of streaming has coincided with the increase of cinema ticket prices which has made cinema-going a much more costly activity.

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5. Statistics show that the top-grossing age rating since 1995 has been PG-13, the US equivalent of the British 12A. This is understandable as such a rating still allows all members of a family to see the film, as long as parents understand that the film is likely to contain certain language, violence or sexual references that may not be suitable for their children. PG-13 is the top-grossing rating because it aspires to the needs of child and adult viewing whereby the film is not too offensive and not too childish. The statistics prove that families are the most profitable audience type.

6. Over the last 18 years, the genres of Comedy, Adventure and Drama have held the highest share of the market, each earning between 38 – 54.5 billion. Action is the fourth highest with 37 billion, after which, the subsequent genres have taken a much smaller box office taking. At No. 5, Thriller/Suspense has 18 billion, where as Musical, at No. 8, has only 3 billion. This is a dramatic decline from the takings of Comedy films. Notably, the total amount of movies produced in each genre doesn’t reflect the results: Comedy is the highest grossing with 2,832 films since 1995 whilst Adventure only produced 767 movies. This proves that, whilst each Adventure film scores the highest ticket sales, comedies are quicker and cheaper to produce and so therefore, more are produced each year.

When comparing these figures with those for the top Creative Type genres, Contemporary Fiction stands out at No. 1 with over 100 billion in box office sales whilst its runner up, Fantasy, only managed 25 billion. This is due to the fact that almost all of the genres on the previous page can contain films classified as Contemporary Fiction. Fantasy, in comparison, is a much less rigid genre, a less produced genre and it tends to fall into the Adventure category.

7. The most profitable production methods in filmmaking are Live Action, movies which use real people reacting with real objects (e.g. The Dark Knight), followed by Animation/Live Action which are live action films that rely heavily on animated objects and sequences (e.g. The Phantom Menace). In comparison, the least profitable production methods in filmmaking are Stop-Motion Animation, whereby objects or models are animated by small movements captured as photographic frames (e.g. Aardman films), and Roto-scoping, whereby frames of Live Action are transferred back into a film sequence as distorted cartoon animation (e.g. Waking Life).

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These results are not surprising. The top box office genres feature almost entirely Live Action or Animation/Live Action films. Over the last few years, the latter production method has seen a rise with the popularity of CGI-motivated films which has become the production preference of the major studios. Not many Stop-Motion Animation films are produced each year because of how long and tedious the animation process can be. Roto-scoping is hardly used as a production technique as it has mostly been used as an experimental, art-inspired visual style.

8. The biggest budgets of all time show a clear link between the budget size and the total Gross: in most cases, the larger the budget, the larger the Domestic Gross and thus, even more so, the larger the Worldwide Gross. This is mostly due to the fact that the biggest budgeted films generally have the most effort put into their marketing campaigns to ensure that there are enough ticket sales to supplement the overall cost, along with a lot of profit.
Surprising items on the big-budget list are the two Disney films, John Carter and The Lone Ranger, which both had massive budgets but failed to make much profit, the latter not even managing to pay off its production budget. Another surprising item is Tangled as it is the only Animated film out of the top 20. It is also very unusual for an Animated film to have such a large budget, particularly one that surpasses the budgets of The Hobbit films, Harry Potter and Pirates of the Caribbean.
In conclusion, market research is a crucial aspect of the mainstream film industry as all the factors discussed above (trending film tastes, country of origin, cast & crew, streaming, age rating, genres, production methods, budgets etc.) must be assessed and applied appropriately in order to achieve the biggest success and, thus, largest profits. Unfortunately for the mainstream film industry, it is this quest for success and profits which cause most ‘hollywood’ films to be churned out as money-making machines, rather than quality art.
Nevertheless, so much money is put into each blockbuster (a few hundred million at least), the major movie studios can’t afford (literally) to make losses due to poor market research.

As a result, film trends must be analysed to find the current most popular (profitable) genres, Comedy and Adventure, which can be made suitable and easily digestible for the most common (and again most profitable) audience type, families. The next step is to cast the most suitable as well as attractive/popular Stars, along with a Director with a good reputation or status, preferably someone like Spielberg. A budget must then be assigned to make the film as unrestricted and massive and as possible, depending on the genre. Popular and innovative production methods, along with modern marketing campaigns, will be needed to pull potential audiences back to the cinemas and away from streaming services and online piracy. All of these factors crucially contribute to the overall success of the film as well as its Total Gross.

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