A Blog by Jonathan Low

 

May 1, 2012

Hollywood Turns to Tweet Analysis for Predicting Film Revenue. With Positive Results

Tea leaves. Pigs entrails. Cloud formations.

During the early historical period of massive social media hype - oh, about eighteen months ago - there was a lot of skepticism about the predictive capabilities of Twitter mentions. They were often lumped in the same class as some of the traditional sooth-sayer methods noted above.

No longer.

As often happens with new technologies and sources of information, accumulating comparable data over time can provide insights not previously available. So, it appears, is the case with Twitter. The film industry is using analysis of tweets to predict movie revenues and finding that the results provide a higher than expected degree of accuracy. While it may be too soon to extrapolate to other competitive arenas - like politics, where this has been tried and found wanting - the film industry's success may signal that for certain limited commercial applications, tweet analysis is useful. And it may well be that as our collective experience with the medium advances, those skills can be extended. But for the time being, let's just put on our 3D glasses and enjoy the moment. JL

Matthew Garrahan reports in the Financial Times:
Hollywood’s peak summer season starts in earnest next week with the release of The Avengers, a movie that throws characters such as Iron Man, Captain America and The Incredible Hulk together in one action-filled super hero melange.

Walt Disney has high expectations for its film, given its recent box-office flop, John Carter . But thanks to Twitter and other social media sites, the company can predict to a relatively high degree of accuracy how much money the film will make on its critical opening weekend.

“The Avengers is tracking in our system to be somewhere north of $135m and could top out at $150m for the opening weekend,” said Ben Carlson, president and co-creator of Fizziology, which analyses tweets, blog posts and other social network data to provide box-office forecasts for Hollywood studios.

“For the last Twilight movie we pegged it at $140m and it opened at $138.5m,” added Mr Carlson.

Hollywood studios have for years used research firms who poll consumers to track their awareness ahead of a movie’s release, which helps them fine-tune their marketing budgets. But Mr Carlson says social media offers a potentially more accurate guide to consumer awareness. “The world is turning . . . why are you asking people for their opinions when they are offering them voluntarily on social media?”

Yet while Twitter can help studios tailor marketing campaigns it has also become a powerful tool that can turbocharge the word of mouth that can hurt a film’s box-office performance. Academics from the Cass Business School in London have analysed 4m film-related tweets and concluded Twitter postings could sway the box office results of a film after its first night on release.

“We found that sentiment spread via Twitter immediately after a new movie’s release systematically influences other consumers’ decisions about whether to attend a screening . . . during the remainder of its opening weekend,” said Caroline Wiertz, who co-wrote the report.

The smaller the ratio between positive and negative tweets, the larger the likely drop off in the second day’s box-office performance will be, added Thorsten Hennig-Thurau, her co-author.

He pointed to the 2010 remake of A Nightmare on Elm Street, which had a 2.5 to one ratio of positive to negative tweets after its first night – a much smaller ratio than most other films. The film’s box-office declined 50 per cent after its opening night.

“The blockbuster strategy that the studios have used since Jaws is in trouble,” he said, referring to the wide-release of big movies on thousands of screens. Now that we have all these microblogging channels the question for the studios is: can we still afford to produce the same kind of movies? There’s nothing they can do to counteract negative buzz on Twitter.”

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