- 27 Feb 2019
- Working Paper Summaries
Judgment Aggregation in Creative Production: Evidence from the Movie Industry
Selecting early-stage ideas in creative industries is challenging because consumer taste is hard to predict and the quantity to sift through is large. Using The Black List that ranks scripts annually based on nominations from film executives, this study shows that aggregating expert opinions helps reduce quality uncertainty and can influence high-budget production.
- 09 Mar 2017
- Cold Call Podcast
IDEO is Changing the Way Managers Think About Thinking
IDEO’s human-centered design thinking is a systematic approach used to help create new products and services. Professor Ryan Buell explores this process as a leading movie cinema chain in Peru rethinks the movie-going experience. Open for comment; 0 Comments.
- 12 Dec 2016
- HBS Case
Business Lessons from Dwayne 'The Rock' Johnson
Actor Dwayne "The Rock" Johnson and partner Dany Garcia are quickly gaining ground in Hollywood as producers. A recent case study by Anita Elberse details the story behind their company, Seven Bucks Productions. Open for comment; 0 Comments.
- 21 Sep 2016
- Research & Ideas
Shabana Azmi: Leveraging Bollywood Fame into Social Good
Indian screen star Shabana Azmi talks to Rohit Deshpandé about how she leverages movie fame into social activism. Open for comment; 0 Comments.
- 06 Apr 2016
- Research & Ideas
Should Entrepreneurs Pitch Products or Ideas for Products?
Entrepreneurs with a new product idea must decide whether to pitch the concept or provide an actual prototype. Which works best? Professor Hong Luo finds answers in Hollywood screenplays. Open for comment; 0 Comments.
- 18 Sep 2012
- Working Paper Summaries
Risky Business: The Impact of Property Rights on Investment and Revenue in the Film Industry
Films are a risky business because much more is known about the quality and revenue potential of a film post-production than pre-production. Using rich data on the US film industry, this paper explores variation in property right allocations, investment choices, and film revenues to find empirical support for three predictions based on property rights theory. (1) Studios underinvest in the marketing of independent films relative to studio-financed films. (2) Because of underinvestment, independent films have lower revenues than comparable studio-financed films. (3) If production cost and marketing investment are complementary, underinvestment in marketing harms large-budget films more than small-budget films, making it more likely that large-budget films will be studio-financed. Kuppuswamy and Baldwin's paper may be the first to provide evidence that vertical integration affects the revenue of specific products through its impact on marketing investments in those products. Key concepts include: Studio-financed films receive superior marketing investments compared to independent films. The US film industry has two distinct property rights regimes: studio-financed films are produced and distributed by studios which take in the lion's share of revenue. In contrast, independent films are distributed by studios under revenue sharing agreements, which give studios 30-40% of the revenue stream. Under either regime, the allocation of scarce marketing resources is determined by and paid for by the studio. Studio-financed films offer higher marginal returns to marketing investments than independent films. Independent film distribution to theaters may be an institutional mechanism that allows studios to adapt to post-production information about the value of their own films vs. outside opportunities. This in turn justifies ex ante investment in the production of independent films (especially those with small budgets) despite their dampened revenue expectations. Closed for comment; 0 Comments.
- 17 Aug 2011
- Research & Ideas
Protecting against the Pirates of Bollywood
Hollywood's earnings in India have largely been disappointing. Professor Lakshmi Iyer believes the problem has more to do with intellectual pirates than the cinematic kind. Open for comment; 0 Comments.
- 09 Aug 2006
- Research & Ideas
Career Advancement Without Experience
Lacking experience, contract workers find it difficult to advance to a job with expanded responsibilities. But it can be done. Siobhan O'Mahony discusses research into the concept of "stretchwork" and the increasing complexity of career management. Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
The Motion Picture Industry: Critical Issues in Practice, Current Research & New Research Directions
This paper reviews research and trends in three key areas of movie making: production, distribution, and exhibition. In the production process, the authors recommend risk management and portfolio management for studios, and explore talent compensation issues. Distribution trends show that box-office performance will increasingly depend on a small number of blockbusters, advertising spending will rise (but will cross different types of media), and the timing of releases (and DVDs) will become a bigger issue. As for exhibiting movies, trends show that more sophisticated exhibitors will emerge, contractual changes between distributor and exhibitors will change, and strategies for tickets prices may be reevaluated. Key concepts include: Business tools such as quantitative and qualitative research and market research should be applied to the decision-making process at earlier stages of development. Technological developments will continue to have unknown effects on every stage of the movie-making value chain (production, distribution, exhibition, consumption). Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
Advertising and Expectations: The Effectiveness of Pre-Release Advertising for Motion Pictures
This research examines how advertising affects market-wide sales expectations for pre-release movies. The authors use data on advertising expenditures and an online stock market simulation, The Hollywood Stock Exchange (HSX), to track more than 280 movies released between 2001 and 2003. Their findings show that advertising affects the updating of market-wide expectations prior to release, and that this effect is stronger the higher the product quality. Key concepts include: Stock market simulations, such as the Hollywood Stock Exchange, can provide data on test markets, and provide clues about the quality of movies and the appeal of initial advertisements. Studios should spend less money on advertising low-quality movies. Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
The Power of Stars: Do Stars Drive Success in Creative Industries?
The importance of star power is evident in creative industries from music and film to fashion and architecture. Star actors are paid millions of dollars, but is star talent critical to product success? What determines the value of stars? In the context of the movie business, Elberse calculated the returns in a study comparing 1,200 casting announcements on trading behavior in a simulated and real stock market setting. In a separate study, she also looked at the stars' impact on expected revenues. Key concepts include: Star participation positively impacts movie revenue. Do not just bet on an A-list star: Combine the right star with the right cast. These interdependencies complicate talent recruitment and compensation decisions. Star participation may not add to firm studios' valuation. If profitability or shareholder value is a key objective, studio executives could alter their talent compensation schemes. Closed for comment; 0 Comments.
- 03 Oct 2005
- Research & Ideas
The Box Office Power of Stars
Just how much do movie stars contribute to box office success? HBS professor Anita Elberse researched the notion of "star power" to better understand how A-list players contribute to Hollywood's bottom line. Closed for comment; 0 Comments.
- 03 Nov 2003
- Research & Ideas
Making Money Making Movies
HBS professor Anita Elberse talks about the state of the international motion picture industry, movie piracy, and how to capture screens in foreign markets. Closed for comment; 0 Comments.
Crowdsourcing Is Helping Hollywood Reduce the Risk of Movie-Making
Hollywood insiders have created "The Black List," which helps surface good but often overlooked scripts. Does the wisdom of the crowd work at the box office? Research by Hong Luo. Open for comment; 0 Comments.