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Hollywood Economics

In January 2012, The Information is Beautiful Awards launched a data visualization challenge for Hollywood films from 2007–2011, providing an “ultra-comprehensive dataset that lifts the lid on opening weekends, worldwide gross, budgets, storylines, review scores – everything – for every Hollywood film released in the last five years.” (Some movies that were released in late 2011 do not have enough data to be fairly represented in this visualization.)

Our submission, which wasn’t really finished due to our workload at the time, was shortlisted along with eleven others. Here we publish our finalized version with a more refined group-coloring for the genres, the addition of a size key to the legend, and the average and sum values for each genre as well as the sum values for all the 656 movies in the dataset (click on the image to see a larger version).

High-quality prints of different sizes and materials of this poster can be bought here, with worldwide shipping. (The png file you see on the web isn’t good for printing.)

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It’s worth mentioning that we made some changes to the genre assignments given in the original dataset. Specifically, we placed Avatar and the series of Harry Potter and Chronicles of Narnia in fantasy; the Twilight Saga in romance, The Last Exorcism and the Saws in horror, and Slumdog Millionaire in drama.

 

How to read the plots

For each element (movie or genre), we visualize two values – the budget and the worldwide gross revenue – with two concentric circles, where the area of the lighter shade circle represents the revenue. In the cases of the main graph (single movies) and the inset graph (averages for genres), these circles are plotted on an x-axis representing sustainability and a y-axis representing profitability. We calculate the sustainability of movies by dividing gross revenue by the opening-weekend revenue, and profitability by dividing gross revenue by the budget. These axes are logarithmically scaled in order to accommodate the wide range of values.

A high ratio of the gross revenue to the opening-weekend revenue indicates that the movie enjoyed a sustained interest and continued to generate revenue as the weeks passed. The movies that lie on the right-side of the plot have larger sustainability values.

The thick horizontal y=1 line indicates the region where the revenue and budget of a film is equal to each other. Below the line are movies that generated less revenue than their budgets – their lighter circles are inside the dark ones. However, since a movie typically needs to generate two to three times of its production budget to be deemed profitable (1, 2), the threshold where real profitability starts is higher above. The area below that threshold – where the movies that were not profitable are – is shown with darker gray, starting with the gradient.

At the bottom part of our visualization we see the big circles representing the total budgets and revenues of genres, ordered by the size of the outer circle, i. e. the gross revenues that they have generated, plus the huge gray circles for the total values for all the 656 movies included in the dataset. (This last part obviously is independent from the axes of the main graph.)

All circles on this visualization are drawn in the same scale, thus comparable to each other in size. The colors of all these circles are determined according to a 5-color grouping that we created for the genres of movies, which can be seen in the legend.

 

Take-aways

The action group appears to do worst in profitability.

Fantasy and animation movies follow a diagonal line, whereas horror movies look scattered along a vertical area with low sustainability. We also note that horror movies usually have very small budgets, and do much better than the other genres in the y-axis at both ends; they go higher than and not as low as the others. We can say that, for horror movies, the budget is not necessarily a good predictor of success in terms of profitability. From a profitability point of view, it may be wise for filmmakers to invest in horror movies if they don’t have much money to put in a single film. This makes sense from a sustainability point of view as well: after all, if a movie is a hit it will pay off its budget (and more) in the first weeks following the opening weekend, and if it is not it will be evident in the opening weekend and it will be easier to pull the movie out of the theaters – an effective measure to cut the costs by eliminating further promotion and advertisement.  

The typical patterns of fantasy/animation and horror movies are apparent also in the inset plot where the average budget and revenue values of each genre is plotted. The bottom graph shows that the total amount gained from fantasy is considerably larger than the amounts of drama, thriller or adventure, all having similar total budgets. These observations suggest us that we may see more horror and fantasy/animation movies in the next years, although the question of whether this is a new trend or a permanent condition remains to be answered.

The number of movies that are below the profitability range is substantial. Filmmaking is a risky business and production companies should be careful in risk management. Here are some links related to the risks and prediction of success in movie business: 1, 2, 3.

The movies with the Academy Award for Best Picture are marked with the silhouette of the Oscar statuette. These movies seem to be doing well on the sustainability axis, although this probably is a mixed result of their success in the eyes of the audience and the second life that they enjoy in theaters during their post-Oscar fame.

And yes, Paranormal Activity really is located at that position in the main graph – a dramatic display of its profitability.

 

1 comment
  1. save says: 07.04.201206:47

    What I would find interesting is a plot of how many of these films were reported as generating a profit for their respective production companies when it comes to tax purposes. I’d be willing to wager that the majority of these films, including even the most wildly successful ones, are flops as far as the IRS is concerned. Hollywood has gotten exceptionally good at dodging taxes.

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