For businesses of all sizes, the stakes surrounding every deal, strategy and operation are undoubtedly high. This is just as true with a startup that's operating on angel investments of several million as it is for enterprises that are contemplating mergers and acquisitions in the double-digit billions. Keeping this in mind, it becomes clear that the ability to predict the future of a given industry or a small factor within a sector and analyze its impact is incredibly valuable. Predictive analytics solutions are capable of fulfilling this role.
The American film industry in Hollywood is one sector that is beginning to adopt analytics and business intelligence analysis techniques with notable frequency. As budgets for mainstream Hollywood movies grow larger and larger – the approximate range for many of 2013's biggest releases is between $100 and $250 million – stakes grow in direct correlation with them. The effects of this high-risk environment extend not only to bottom-line budgets but also to the creative visions of those involved in the movies themselves. BI software can be used to analyze the metrics that will help determine the likelihood of box office success and help avoid the potential for failure.
Examining recent failures
Two recent films that bottomed out at the box office exemplify where the analysis of audience data would have helped. The first is the 2012 sci-fi adventure John Carter, based on the early 20th century novels by Edgar Rice Burroughs. While reviews were not entirely negative and it did well overseas, poor U.S. marketing techniques and a misunderstanding of the film's potential appeal led to the film losing almost $200 million for its studio, Disney.
2013's adaptation of classic serial The Lone Ranger, starring Johnny Depp, seemed a more sure bet, with a bankable lead and creative team. However, The Guardian reported that the $225-million film is projected by Disney to lose between $160 and $190 million. Filmmakers blamed critical perception, while industry experts cite the story's lack of relevance among today's youth.
Handicapping Hollywood with analytics
Vinny Bruzzese, a former statistics professor, has risen in esteem among Hollywood insiders for his combined use of statistical analysis and critical input to gauge a film script's potential for success. According to The New York Times, his company Worldwide Motion Picture Group analyzes everything from the box-office performance of past films with similar content to the more abstract elements of a script, and Bruzzese has turned it into a lucrative use of analytics.
Summing up what he did in an interview with the source, Bruzzese said, "I understand that writing is an art, and I deeply respect that. But the earlier you get in with testing and research, the more successful movies you will make."