Market Research Is Used for Audience Creation by Movie Studios

Studios Avoid Collision of Film Release Dates with Market Research

Market Research Creates Audiences for Movie Releases - No More Collisions at the Box Office and Everybody Wins. Getty Images | Peopleimages.com | Digital Vision

The movie industry uses market research in some very interesting ways, much of which is focused on making the right bet when deciding which scripts to actually turn into films.  But there is another side to market research for the film industry that begins when production ends.  A science has been developed around film openings at the box office.  

Movie openings occur on the weekends as that is an optimal time to achieve the highest attendance.

 There are only so many weekends associated with major holidays or in the summer, a season characterized by relatively high numbers of moviegoers.  Considering this, it is fairly easy to understand why scheduling movie release dates has become an important service provided by guarded market research firms. 

Who Keeps the Studio Rivals from Competitive Collisions?

National Research Group (NRG) - now owned by Nielsen Entertainment - is one firm that is very active player in movie release scheduling.  The six major movie studios have access to a weekly competitive positioning report put out by NRG.  When National Research Group was founded in 1978 by Joseph Farrell, the movie studios contractually agreed to receive exclusive, proprietary aggregate data from the telephone polls conducted by Farrell.  NRG provides standardized tracking data that has considerable utility for the movie studios as it enables them to enjoy a common basis for scheduling.

 The offshoot is that this indirect collaboration results in mutual benefit across the studios since it prevents scheduling conflicts.  

How Is the Market Research Conducted by NRG?

With Nielsen as a support, NRG has access to samples of potential and likely moviegoers who can be approached to participate in their telephone poll.

 The screening questions NRG asks the study sample is whether they are aware of (have heard about) a particular movie, and if they are likely to see the movie when it opens.  Some demographic questions are also asked as it is critical to know the age and gender (and sometimes the race or ethnicity) of the poll respondents in order to establish the structure of the data analysis.  

Four basic respondent groups are used to analyze and clarify the significance of the tracking polling data.  The four quadrants are: 1) Males under 25 years of age; 2) males over 25 years of age; 3) females under 25 years of age; and, 4) females over 25 years of age.  The primary objective of the analysis is to project how well new movies would do if they actually were all released on the same weekend.  This projection is completed for each audience quadrant. 

Why Is the Market Research for the Competitive Positioning Report Important?

Not so very long ago, Hollywood movies were attended by a habitual audience.  Groups of people could be relied to attend movie openings and nothing special had to happen with respect to that sort of built-in audience of moviegoers.  But innovative technology has changed the movie viewing habits of the nation and audiences actually have to be created - pulled together movie ad campaigns that have been likened to cattle drives.

 While the concept is rough around the edges, a parallel does exist: Different audiences must be created for every film released.   A Sony marketing executive told Edward Jay Epstein of Slate that,

"If we release 28 films, we need to create 28 different audiences." 

The main trouble with this arrangement is that audience creation is an incredibly expensive undertaking.  Epstein reports that the average expenditure for audience creation for each movie was $30.6 million in 2004.  And here is the thing: the cattle drive ad campaign must round up the moviegoers and it must lead them to the theatre on opening weekend.  Read more about how this is accomplished and what the audience creation approach means to the customer wallet share of major movie studios.

Sources:

Epstein, E. J. (2005, July 18). Hidden persuaders: The secretive research group that helps run the movie business.  Slate.

National Research Group (NRG).  (2013, January 29). Popcorn People: Profiles of the U.S. Moviegoer Audience.  Media and Entertainment.  Nielsen.

The Nielsen Company.  (2014, December 11). Today's feature: Digitals and the silver screen.  Media and Entertainment – Nielsen.