In Meet Hollywood’s Latest Genius, physicist-screenwriter Leonard Mlodinow explains that “box-office success is more random than you may think”:
That no one can know whether a film will hit or miss has been an uncomfortable suspicion in Hollywood at least since novelist and screenwriter William Goldman enunciated it in his classic 1983 book “Adventures in the Screen Trade.” If Goldman is right and a future film’s performance is unpredictable, then there is no way studio executives or producers, despite all their swagger, can have a better track record at choosing projects than an ape throwing darts at a dartboard.That’s a bold statement, but these days it is hardly conjecture: With each passing year the unpredictability of film revenue is supported by more and more academic research.
That’s not to say that a jittery homemade horror video could just as easily become a hit as, say, “Exorcist: The Beginning,” which cost an estimated $80 million, according to Box Office Mojo, the source for all estimated budget and revenue figures in this story. Well, actually, that is what happened with “The Blair Witch Project” (1999), which cost the filmmakers a mere $60,000 but brought in $140 million — more than three times the business of “Exorcist.” (Revenue numbers reflect only domestic receipts.)
What the research shows is that even the most professionally made films are subject to many unpredictable factors that arise during production and marketing, not to mention the inscrutable taste of the audience. It is these unknowns that obliterate the ability to foretell the box-office future.
Why is the movie business so upredicatble?
De Vany likes to illustrate the oddities of the film business by comparing films to breakfast cereal. If breakfast cereals were like films, he says, each time we visited the store we would find a large selection of new cereals, and only a few brands that survived from our last trip. Most of these cereals would languish unnoticed, but crowds would gather at certain parts of the aisle, scooping up the popular brands. And yet, within a few weeks, or at most months, even those popular brands would vanish from the shelves. And so our typical cereal breakfast would consist of a product we had never before tried, and very well might not like, but bought because we heard about it from friends or read of it in the newspaper cereal section.That’s precisely how films behave in the marketplace. If we hear good things, we go and perhaps tell others; if we hear bad things, we stay away. It’s that process—the way consumers learn from others about the expected quality of the product—that De Vany found is the key to the odd behavior of the film business today. Economists call it an “information cascade.”
“People’s behavior is simple,” De Vany says, “but in the aggregate it leads to a complex system, a system bordering on chaos.”
Some examples:
“The executives at Warner Bros. didn’t think anyone wanted to watch a dark film about a woman boxer,” says Harvard’s Elberse. “They made ‘Million Dollar Baby’ because they have an ongoing relationship with Clint Eastwood.” And who hasn’t heard the tales of “Ishtar” (Warren Beatty + Dustin Hoffman + a $55-million budget = $14 million), or “Last Action Hero” (Arnold Schwarzenegger + $85 million = $50 million)? In 1972 a young director named George Lucas shot a film called “American Graffiti” (1973) for less than $1 million. Universal had doubts about the finished film that eventually took in $115 million, and even graver doubts about Lucas’ next idea. Lucas called the story “The Adventures of Luke Starkiller, as taken from ‘The Journal of the Whills.’ ” Universal called it “unproduceable.” Ultimately, Fox made the film, but its faith in the project only went so far — it paid Lucas only $100,000 to write and direct it; in exchange, Lucas received the sequel and merchandising rights. In the end, “Star Wars” took in $461 million on a budget of $11 million, and Lucas had himself an empire.
If it’s all random, why doesn’t it seem random?
One of the questions Kahneman liked to put to his subjects concerned the sequences in a coin toss. For instance, in a toss of seven coins, which of the following head-tail combinations is more likely to occur, HHHHTTT or HTHTTHT? Most people erroneously believe that the first sequence is less likely than the second, but the two sequences — and all other sequences of seven heads and tails — are equally probable.Not only are people bad at recognizing random processes, they also are easily fooled into thinking they are controlling them. Sociologists first noticed this while observing gamblers in Las Vegas. Dice players, they noted, act as if tossing the dice is a game of skill. They throw them softly if they want low numbers, or hard for high ones. Much like Hollywood executives, gamblers have their theories about how to make lucky throws.
The temptation to believe that you or others are causing chance events is so strong that psychologists coined a term for it: the illusion of control. In a classic study, psychologists Ellen J. Langer and Jane Roth recruited Yale undergraduate psychology majors to watch an experimenter flip a coin 30 times. One by one, the subjects watched the coin flips and tried to guess how the coins would land. They found that, although students at an Ivy League university are surely aware that a coin toss is a random event, those who experienced the early winning streaks developed an irrational attitude of confidence that they were “good” at intuiting the coin toss. Forty percent said their results would improve with practice; 25% even reported that, if in the future they were distracted during the test, their performance would suffer.