Abstract
In a market characterized by a very large number of consumers, irregularly and infrequently choosing from a constantly changing menu of possibilities, widely available impartial information and advice would be expected to make a significant impact on demand. In the U.S. in 2003, however, there was zero correlation between critical ratings for films and gross box office earnings. For movies released on more than 1,000 screens, critical ratings were indeed positively related to gross earnings, and, together with production budgets and the number of opening screens, explained more than half the variance. But films with only limited opening release received higher average ratings. This is especially the case for foreign movies and documentaries but also true for American films, whose ratings, though positively related to the box office, seldom have enough influence to propel a movie into later wide exhibition or high earnings.
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Notes
A very small number of films may be released on a limited basis in December to be eligible for consideration in the upcoming Academy Awards, followed by national distribution early in the New Year. These are treated here as being released in the New Year.
In current prices, marketing costs rose from $5.2 million to $39 million. “Theatrical costs” are here the costs of producing the negative plus marketing. For clarification the “MPAA companies” are the seven major Hollywood studios. They do not include affiliated or subsidiary distributors whose films tend, like those of true independents, to be less aimed at mass markets, and whose negative costs and, especially, marketing expenditures ($14.7m in 2003) are on average lower.
Gilbert-Rolfe, Merchant, and Moroian (1993, p. 21) estimate that 85% of promotional expenditure takes place before a movie is released.
Cameron (1995, p. 326) suggests that film reviewers may do this in order to remind consumers that they need the experts, to raise the barriers to entry into the profession, and to build up the market for their specialized services.
The website also averages the scores of those reviews that give explicit grades, but by no means all critics do this.
Audit Bureau of Circulations.
U.S. earnings and production cost data for the 2003 movies were obtained from the website “Craig’s Flick Picks” (www.craigbe.com). They are also available on several other websites. Historical data and information on worldwide earnings were taken from www.boxofficemojo.com. Reviews for one movie that reportedly received a theatrical release but was not in these box office data were discovered too late for inclusion, so it is possible that others may be missing, but it is unlikely that these are significant.
The highest score of all was received by a very brief re-release of a 1971 French gangster film, Le Cercle Rouge.
Nine movies ended their runs before the fifth week. The alternatives of excluding these or giving them zero earnings during the fifth weekend did not significantly change the correlation coefficient.
These films are frequently described as “art-house” movies, but this is misleading, since they include movies, such as The House of 1000 Corpses, which are emphatically not aimed at an audience of intellectual film lovers. Moreover, the growth of multiplexes at the expense of independent cinemas means that a sophisticated foreign movie and an action blockbuster may be showing in the same multiplex.
Two films opened in very few cinemas and were widely distributed the following week. In these cases the second weekend was used. In a few other cases, there was a gradual increase in the number of screens; for these no adjustment was made.
Caves cites the Academy Award winner Gandhi as an example of this strategy in 1982, but this appears rather to be an example of a limited December release of a movie to ensure eligibility for the forthcoming Academy Awards.
Several conventional movies made in the U.S. with well-known actors received good reviews but failed to attract an audience. Among them, The Good Thief, starring Nick Nolte, directed by Neil Jordan, (both previous Academy Award nominees for Best Actor and Best Picture, respectively) received the high Metacritic score of 69, but with an estimated production cost of $25 million, had a U.S. domestic gross of only $3.5 million. An even higher Metacritic score (78) was given to Blue Car, which failed to earn even $500,000 at the U.S. box office.
In 1983 it was $11.9 million at current prices. These data exclude films made or distributed by MPAA subsidiaries or affiliates, whose films are often aimed at more selective audiences.
Speech by Jack Valenti to the ShoWest Convention, Las Vegas, March 23, 2004. (http://www.mpaa.org/MPAAPress/2004/2004_03_23b.pdf)
In the first category, Heaven’s Gate (1980), which caused the financial wreck of United Artists, is the most notorious example. In the second category is My Big Fat Greek Wedding, a low-budget movie that opened on 108 screens, spent 10 months in cinemas, and earned $241m, making it the fifth most successful earner of the 2002 releases. The driving force appears to have been “word-of-mouth” rather than published reviews, which were good but far from superlative (Metacritic score 62).
In 2003, Bend It Like Beckham received very good reviews (Metacritic score 68), played for 30 weeks, and ending up earning almost exactly the mean earnings for all commercial releases. Superlative reviews (88) helped to propel Lost in Translation from an opening 23 screens to 882 in the fifth week. Later, its star, Bill Murray, received the Best Actor Oscar which gave it a further new lease on life, and it ranked 67th in gross earnings.
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The author would like to thank the editors and an anonymous referee for very useful comments and suggestions.
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King, T. Does film criticism affect box office earnings? Evidence from movies released in the U.S. in 2003. J Cult Econ 31, 171–186 (2007). https://doi.org/10.1007/s10824-007-9041-z
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DOI: https://doi.org/10.1007/s10824-007-9041-z