Entertainment Industry Economics

Vogel, Harold L.

doi:10.1017/9781108675499

Cited by 47 publications

(31 citation statements)

References 159 publications

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“…Motion picture production and distribution can be described as a process from the operations management perspective. The process is extremely complex and involves diverse parties making many decisions (Vogel, 2001). Just like any process, its performance can be measured in terms of productivity.…”

Section: Introductionmentioning

confidence: 99%

Improving productivity in Hollywood with data science: Using emotional arcs of movies to drive product and service innovation in entertainment industries

Vecchio

Kharlamov

Parry

et al. 2020

Journal of the Operational Research Society

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Improving productivity in the entertainment industry is a very challenging task as it heavily depends on generating attractive content for the consumers. The consumer-centric design (putting the consumers at the centre of the content development and production) focuses on ways in which businesses can design customized services and products which accurately reflect consumer preferences. We propose a new framework which allows to use data science to optimize content-generation in entertainment and test this framework for the motion picture industry. We use the natural language processing methodology combined with econometric analysis to explore whether and to what extent emotions shape consumer preferences for media and entertainment content, which, in turn, affect revenue streams. By analyzing 6,174 movie scripts, we generate the emotional trajectory of each motion picture. We then combine the obtained mappings into clusters which represent groupings of consumer emotional journeys. These clusters are then plugged into an econometric model to predict overall success parameters of the movies including box office revenues, viewer satisfaction levels (captured by IMDb ratings), awards, as well as the number of viewers' and critics' reviews. We find that emotional arcs in movies can be partitioned into 6 basic shapes. The highest box offices are associated with the Man in a Hole shape which is characterized by an emotional fall followed by an emotional rise. This U-shaped emotional arc results in financially successful movies irrespective of genre and production budget. Implications of this analysis for generating on-demand content and improving productivity in entertainment industries are discussed.

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Section: Introductionmentioning

confidence: 99%

Improving productivity in Hollywood with data science: Using emotional arcs of movies to drive product and service innovation in entertainment industries

Vecchio

Kharlamov

Parry

et al. 2020

Journal of the Operational Research Society

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show abstract

“…We also offer the first institutional logics framing of the rivalry between traditional studios and online streaming services. Applied to the film industry, the institutional logics perspective differs markedly from prior approaches taken in the economics (Moul 2005;Vogel 2014), finance (Rusco and Walls 2004), and marketing (Elberse and Eliashberg 2003) literature. Just like most quantitative studies of other cultural products including books, music, and games (see, for instance, the numerous studies cited and discussed in Hennig-Thureau and Houston 2019), nearly all quantitative research on the movie business so far has focused on project-level analyses of the correlates of film profitability.…”

Section: Discussionmentioning

confidence: 98%

Hollywood studio filmmaking in the age of Netflix: a tale of two institutional logics

et al. 2020

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Online streaming services are challenging long-standing decision-making processes in the traditional motion picture industry, thus placing Hollywood major studios at a crossroads. We use the institutional logics perspective to examine how both traditional studios and online streaming services make strategic decisions on which films to produce and how these films are to be distributed. We then apply scenario analysis to explore how their interaction will likely evolve. We argue that the key criteria that studio executives use to make production and distribution decisions are shaped by what we define as a commitment institutional logic: decision-making heuristics that focus their attention on theatrical release and box-office intakes. In contrast, online streaming services follow a convenience institutional logic, the product of advanced data analytics to increase subscriptions. In the convenience institutional logic, the need to drive online traffic by providing users with an extensive catalogue of movies guides film production and distribution decisions. Whereas the commitment logic aims for mass-market hits in cinemas, the convenience logic seeks to reach a wide range of subscribers at home with micro-segmented offerings. We compare the two logics, develop four scenarios of how the interaction between them may shape the film industry, and offer recommendations.

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“…The next issue is the proportion of total film revenues that can be attributed to theatrical release. Our starting point is data presented in Vogel (2015), Table 4.6 (p. 110). This shows 7 the proportion of film revenues attributable to theatrical release, in 5 year intervals, from 1985 to 2005, with an additional observation for 2007.…”

Section: The Datasetmentioning

confidence: 99%

“…Next, we require the proportion of box-office revenues that revert back to the studios/distributors in the form of film rentals. Such estimates are provided by Vogel (2015, The final issue in deriving estimates of film profits and film rates of return is a methodology for estimating film distribution costs. The approach we adopt follows the approach developed in the appendix to Pokorny and Sedgwick (2010).…”

Section: The Datasetmentioning

confidence: 99%

Managing uncertainty in creative industries: Film sequels and Hollywood’s profitability, 1988–2015

Pokorny

Miskell

Sedgwick

2018

Competition & Change

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The film industry is characterised by high levels of uncertainty, yet the firms that dominate global film distribution have remained remarkably stable over the last century. The ability to transform uncertainty into risk, and to manage these risks effectively, has arguably been the outstanding achievement of major American film studios since the 1920s. This article examines how the risk management strategies of these firms have evolved over time, with a particular focus on the growing prevalence of sequels during the last 30 years. We analyse data on the box-office earnings and budgets of over 4000 films released between 1988 and 2015, and find that sequels have become an increasingly important source of industry profits since c.2000. We place this trend in historical context, and argue that while sequels themselves are not new, their role within film portfolios has changed, and that this represents a distinctive approach to risk management within the industry.

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Entertainment Industry Economics

Cited by 47 publications

References 159 publications

Improving productivity in Hollywood with data science: Using emotional arcs of movies to drive product and service innovation in entertainment industries

Improving productivity in Hollywood with data science: Using emotional arcs of movies to drive product and service innovation in entertainment industries

Hollywood studio filmmaking in the age of Netflix: a tale of two institutional logics

Managing uncertainty in creative industries: Film sequels and Hollywood’s profitability, 1988–2015

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