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Articles from Cass Knowledge
Management Series: marketing

A little bird told me...

Micro-blogs can have a powerful effect on a movie's opening weekend box-office success, according to an academic study of 4 million social network messages. Charles Arthur reports.

The screenwriter William Goldman, whose credits range from Butch Cassidy and the Sundance Kid to Good Will Hunting, seems to be wired directly into the cinematic zeitgeist. But in his book Adventures in the Screen Trade he asserts repeatedly that "nobody knows anything". He means that, until a movie has opened and the first weekend's box-office receipts have been counted, nobody in Hollywood has any real idea of how well a film will do.
But many would-be viewers decide an awful lot more quickly than that whether to contribute to those takings. They make their decision on the opening night after reading micro-blogs that have often been started before the closing credits roll. And the Twitter effect may have a significant impact on a movie's success.
Twitter and Facebook have become a key part of many peoples' lives: Facebook, founded in 2004, has more than 900 million users worldwide, of whom more than half access it via mobile phones, while Twitter, founded in 2006, has 140 million active users with a high proportion also accessing it via mobile phones.
Before the advent of micro-blogging, word of mouth still influenced people's choice of what to see but it took longer to spread. The internet disseminated critical opinion, but sites such as Rotten Tomatoes and the Internet Movie Database - the definitive source for much trusted movie information - did not publish user reviews until Monday morning, by which time a lemon that deserved to sink without trace could have recovered its costs.

Surprising success
Dr Caroline Wiertz, Reader in Marketing at Cass, Thorsten Hennig-Thurau, Professor of Marketing at Cass and the University of Münster, Germany, and Fabian Feldhaus, a researcher at the University of Münster, studied Twitter traffic about 105 films on their opening weekend and compared the information with that from a control group of 105 films from the pre-Twitter era. Their report, Exploring the "Twitter Effect": An Investigation of the Impact of Micro-blogging Word of Mouth on Consumers' Early Adoption of New Products, concludes that tweets can have an impact on the success of the even the most expensively marketed movies.
Film analysts have blamed the twitter effect for the failure of some big-budget films, notably G.I. Joe: the Rise of Cobra and suggested that it may have been responsible for the surprising success of Transformers in 2007 and the 2010 version of The Karate Kid, both of which had been panned by professional critics.
Wiertz and Hennig-Thurau were inspired to investigate the role of Twitter by Brüno, Sacha Baron Cohen's 2009 mockumentary about a German fashion designer who moves to Los Angeles. It took $14.4 million (£9.2 million) on its opening night but seems to have fallen victim to the Twitterati. On its second night the takings were down by more than 60% to $8.8 million.
The research focused on films released on more than 800 screens in the United States between October 2009 and October 2010 - including blockbusters such as The A-Team, Inception andSherlock Holmes - and checked all four million micro-blogging word-of-mouth messages sent about them over Twitter on their opening weekends using sentiment analysis to extract the embedded meaning.

Critical ratings
The study began with three hypotheses: that the Twitter effect really did exist and micro-blogging word of mouth (MWOM) from people who had just seen a newly released film would affect its subsequent popularity; that the impact would vary depending on the overall volume of messages; and that the impact would vary depending on the receiving audience, with the effect being stronger for films aimed at teenagers and weaker for those aimed at families (where deciding what to see is acomplicated negotiated decision involving several family members.)
The researchers looked at positive and negative Twitter reaction on the opening Friday night, and then at the variance in Saturday and Sunday takings. They also allowed for the amount of advertising spending, professional critics' ratings and other controls.
Twitter gave them extended access to its database and they examined four million tweets - an average of more than 38,000 per film - identifying 892,000 as post-consumption evaluations. Most were posted on Friday evening and Saturday morning, peaking on Friday at 11pm. The researchers sought out positive or negative valence, or emotional response, to each film.
They found that two of their three hypotheses were supported. Dr Wiertz said: "We found that sentiment spread via Twitter does systematically influence other consumers' decisions about whether to see the movie during the remainder of its opening weekend.

Advertising spending
"The Twitter effect holds even when controlling for other known influencers of movie success, such as production budget, pre-release advertising spending, pre-release buzz about the movie, professional critics' ratings, star actors and so on."
"However, it does matter who the main target audience of the movie is. Movies aimed at families are less affected by Twitter sentiment than others."
Pre-millennium internet use was minimal compared with today and word of mouth spread almost exclusively among physical social circles. As the internet grew, forums and review sites sprang up but the reviewers were people the would-be cinemagoer didn't know.MWOM is more personal: now, as soon as the first viewers come out of a film they trigger an "informed information cascade" as they publish their opinions - good or bad - to a social circle, says Dr Wiertz. Readers know the people passing judgment and are therefore more influenced by their opinion.
But this brings a new problem for film studios, which have been used to pushing movies that they know aren't great onto a lot of screens on an opening weekend to recoup their investment before people hear that it's no good.

Information advantage
"Expensive pre-release advertising campaigns will not be able to drive audiences much beyond the opening night" says Dr Wiertz. "Film producers who previously held an information advantage over consumers on the quality of a movie are now at the mercy of micro-blogging. This will level the field and give smaller, independent films a better chance to compete."
So how should the film business react? Quite possibly by putting their eggs into more baskets, suggests Professor Hennig-Thurau. "Rather than one $300 million film, you put out ten $30 million films. Then you have a portfolio so that you can afford nine flops. I think that's what's going to happen."
First, though, the film business will have to curb its enthusiasm for blockbusters. Professor Hennig-Thurau says: "Production budgets have become completely inflated. Look at the Alien franchise. While the first Alien, released in 1979, cost just $11 million, the recent prequel, Prometheus, had a budget over $200 million. Is that really necessary to make a good movie?"
The advertising included attempts to build interest through Twitter hashtags. Perhaps Goldman's theory that "nobody knows anything" might need to change to "nobody in the industry knows anything - but with Twitter, consumers now know enough to make an informed choice".

Charles Arthur is Technology Editor of The Guardian. He can be contacted on Twitter: @charlesarthur

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