Movie

Madness

Applied Regression Analysis

Flora Amores, Kristen Bierfeldt, Ben Bronfman, Jena Deng,
Jennie Goldstein, Christiana Kwon, Jonathan Ragins

Objective & Approach

Identify factors that influence ticket sales

Create a model to help studios predict gross ticket sales

Descriptive
Statistics

Regression
Analysis

Description of
independent and
dependent
variables
Histogram analysis
Distribution Test
Correlation
Analysis

Best subset
regression
analysis: identify
relevant
independent
variables
Residual analysis

Forecasting
Forecasting gross
domestic ticket
sales for 2014
releases

Dataset
Data Field

Description

Source

Movie Title

Name of the film

Box Office Mojo

Total Gross

Total amount of money the film made while it was in theaters

Box Office Mojo

Awareness Score

Publics awareness of top-billed celebrity; 0-100 Rating

IMDB; E-Score

Appeal Score

Appeal of top-billed celebrity; 0-100 Rating

IMDB; E-Score

Rotten Tomatoes
Rating

Film critic and writer reviews

Rotten Tomatoes

Production Budget

Amount the studio spent on production of the film (excl Marketing)

IMDB

Studio

CBS, Disney, FilmDistrict, Focus, Fox, Lionsgate, Open Road,

Paramount, Relativity, Screen Gems, Sony, Summit, Universal,
Warner Bros, Weinstein

IMDB

Season

Season the film premiered in: Winter, Spring, Summer, Fall

Box Office Mojo

Genre

Action/Adventure, Animated, Comedy, Drama, Horror, SciFi/Fantasy, Suspense/Thriller, Romance, Documentary

Movies.com

Rating

G, PG, PG-13, R

Movies.com

Histograms Revenue Minus Cost

Skewed right with long right tail

Even among the top films, very few

achieve extreme success
(>$300M),

Most of the top 100 earned closer to

$75M, compared to the mean
production budget of about $74M

Skewed right with long right tail

Many production budgets for top

grossing films are over $40M (long
right tail)

However, about 30% are made with

a <$40M budget, indicating a
massive budget is not necessary for
commercial success

Histogram Independent Variables

Fairly normal, but skewed left

Top grossing films tend to star

actors with higher appeal scores

Does not appear normal

Current stars or rising stars tend to
be more common in top films
Lower awareness more common in
top grossing films

Distribution Test

Skewed right with long right tail

Even among the top films, only very few are extremely successful (>$300M)

Actual blockbusters are rare - Most of the top 100 earn closer to $75M
This compares to about $75M average production budget, indicating limited profitability
even among the most successful films

Full Model Output

R2 = 63.4%

Adj. R2 = 45.9%
Several
variables with
extremely high
VIF scores
Multiple
insignificant
variables

Correlation Matrix

Production budget, rating, and Disney studio have highest correlations to the
dependent variable
Action/Adventure and budget are highly correlated, likely due to special effects
costs. Viewers also benefit the most from this genres in-theater experience

Independent variables have low correlation to each other (<40%)

Reduced Model - Method

Since Minitab only handles 31 independent variables, we ran a Best Subset

by excluding the studios that had the lowest correlation with the dependent
variable
The Best Subset model had 13 variables that were used to run a regression

After running the regression we continued to remove insignificant variables

from the model until we felt the best reduced model was reached

Reduced Model - Output

R2 = 53%
Adj. R2 = 50%
All variables statistically significant at the ~90% level

Predictive Equation: Total Gross = -65,694,307 + 964,102Appeal + 101,543,955RottenTomatoes +

0.62Production Budget + 36,240,004Animated + 40,129,621Disney 78,441,939Focus

Residuals

Our assumption of linearity does not hold

Heteroscedasticity present

How Did We Do?

Using our final model, we predicted ticket sales for movies released and
closed in 2014

Conclusions

Model indicates that Rotten Tomatoes Rating and Production Budget are
significant contributors to Total Gross variability
Studio has little impact on the variability of Total Gross, with the exception of
Disney (positive impact) and Focus (negative impact)

Disney: People go to see a movie because its a Disney movie, which drives up ticket sales
Focus: This indie film studio has smaller distribution and awareness

Ticket sales are difficult to predict

Movie goers are irrational
Action/Adventure films have high production budgets but do not consistently
generate high ticket sales. The genre is more prone to outliers in the form of
blockbusters

QUESTIONS?

Appendix

Additional Data

In addition to the previous data, we also aggregated the following data that we
did not include in our analysis:

Data Field

Description

Reason Not Included

Theaters
(Opening)

Total number of theaters that showed the

movie on its opening weekend

Several outliers that had limited openings

Opening

Films gross on its opening weekend

Opening gross is not necessarily

representative of total movie
performance, especially for limited
openings

Theaters

Total number of theaters that ever

showed the movie

Minimal variance within the data

Open

Date of opening

Opening date reflected within Seasons

variable

Close

Date of closing

Closing date inherently reflected within

total gross numbers