TakeAway: Success in the movie industry is a bit of a chicken and egg scenario.
Movie houses must spend money on marketing in order for consumers to know about the movie; however, movie houses do not want to spend too much money on marketing because it eats into their profits.
Now, the movie industry has access to ratings based on buzz and word-of-mouth ratings to help inform its ongoing marketing investments and gauge the potential success of a movie.
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Excerpted from WSJ, “‘Avatar’ Seeks Out a Mega-Audience,” By Lauren A.E. Schuker and Ethan Smith, December 11, 2009
Market research suggests mixed levels of interest among potential audiences for the extravagant 3-D sci-fi picture “Avatar,” raising the stakes for the backers of one of the most expensive movies ever made.
Twentieth Century Fox says it is counting on strong word-of-mouth and positive reviews from critics to recoup its investment in the movie, which hits theaters next Friday.
The film, which uses pioneering 3-D technology and computer graphics, is one of the most highly anticipated releases to come out of Hollywood in years.
But production costs on “Avatar” … are likely to exceed $300M … Fox is spending around $150 million more on marketing the movie globally …
That means that the movie has to be nothing short of a mega-blockbuster in order to make its money back. As a result, there’s hyperfocus on the latest advance research, or “tracking,” of potential audiences.
Nielsen’s tracking data … indicate that “Avatar” is hewing closely to patterns established by successful films …
While male audiences are showing increased interest and awareness in “Avatar,” female moviegoers are less enthusiastic, with negative attitudes toward the film growing among women under 25.
One distinct bright spot for “Avatar” is that many key metrics—including “unaided awareness” of the movie—have improved as the movie’s release date approaches …
Studios use tracking research, which polls domestic audiences on their awareness of and interest in seeing movies, in order gauge the effectiveness of marketing efforts. The data can be helpful in forecasting a given movie’s opening weekend performance. But predicting a movie’s ultimate box office total is much more difficult.
If a film generates strong word-of-mouth buzz and positive reviews from critics, it can often outperform early estimates …
In some areas, the Nielsen research … shows “Avatar” coming in below similar sci-fi action movies. For instance, roughly a week before release, the data show audiences are demonstrating slightly less “definite interest” in the film than they did at the same point with “Iron Man,” which grossed nearly $100 million opening weekend and more than $300 million at the domestic box office.
“Avatar” is currently scoring slightly behind 2007’s “Transformers” in the crucial “unaided awareness” category. “Transformers” took in $70 million on its opening weekend.
In comparison, tracking data for the movie “2012,” released last month, showed strong interest among both women and men. That film went on to gross $150 million in the U.S. and more than three times that internationally.
“Tracking is light for a title of this magnitude,” says Jeff Bock, a box-office analyst at Exhibitor Relations, referring to “Avatar.”
That said, Mr. Bock adds, “If the reviews are good, that will help encourage older audiences that aren’t quite sold on 3-D yet…. Then you can get that older demographic to see the film, that’s what Fox and Jim Cameron need to make this a hit across the board.”
In the first U.S. review of “Avatar,” posted online Thursday evening, the Hollywood Reporter raved, predicting “Fox will see more than enough grosses world-wide to cover its bet on Cameron.”
Edit by TJS
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Full Article
http://online.wsj.com/article/SB10001424052748704193004574588421216055200.html
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