Movie marketing tracking is in the toilet. I know it’s been hit and miss for years, but now, it’s pretty much all bad. Over the last few months, I have been looking at it all — just as all the studios in town do — and the inaccuracy has been truly appalling. Last weekend, this weekend. Multiple weekends in a row. Who provides analysis? NRG, Box Office Analyst, and MarketCast, mainly.
Let’s just look at the past two weekends: TWC’s YA adaptation, The Giver was predicted at $20M and ended up at $12M last weekend while Millennium/Lionsgate’s The Expendables 3 was tracking anywhere from $20M to $25M and came in at $15.8M.
This weekend was just as bad. If I Stay was tracking in the low 20’s and will come in at $16.3M; Frank Miller’s Sin City: A Dame to Kill For was tracking at anywhere between $16M to $19M and came in at $6.4M. When the Game Stands Tall was tracking between $10M and $11M and came in at $8.7M. Tracking companies are driving the studios into a hell of their own making.
Which one is the best? Since the Fourth of July Weekend, probably MarketCast, says an industry observer with many years of experience. Ah, yes, MarketCast — the company that NRG’s Joe Farrell tried to discredit when it first came to town. I did the first article on Joseph Helfgot and his different ideas about positioning studies — and when I did — NRG’s Farrell came after me with a vengeance. He didn’t want any competition as NRG had a virtual monopoly. At the time, NRG was the best. Now they are teetering on the brink of irrelevancy.
For instance, the tracking on Sex Tape was being forecast at $30M and it opened at $14.6M. Guardians was predicted to do in the $60M’s and ended up opening at $94M. I could go on and on.
The studios pay millions of dollars a year for solid tracking information so they can figure out how to spend their media. Guess what? The tracking ain’t working. It isn’t reliable. It’s off by millions. So the studios are, basically, basing their media buys on pure crap info. Millions and millions more dollars are being flushed in media buys. Great news for shareholders, eh?
And it’s affecting everything. Not only do tracking numbers affect how studios spend on marketing, but they are also looking at those numbers to help determine what kind of genre projects to greenlight. They are hiring directors and writers based on what looks likely to be successful.
“They need to fix it,” said a top distribution executive at a major studio. “I think they need to go a little deeper in their research, in the way that they ask and who they ask. There are a combination of companies that we look at, but people have a tendency to believe the number that looks the best. It’s timely to ask this question.”
So what happened and when did it start to really change? Some point to the new generation that has grown up on smart phones. “The new generation today has no problem multitasking, watching movies on the cell phone, and we, in the business, find that a little hard to take, so you find this generation is very fickle. They can multitask to the point of emailing, instant messaging, while they are watching movies — all these things. If you take a demographic like the young female audience, well, that’s the toughest. They go in packs and text and email each other so many different ways. It’s hard for them to agree to do anything.
“I think the tracking companies have not adjusted to the young and hipper generation, but they have to. I think that social media tracking is the way to do it and traditional media is very hard now because of TIVO. You have binge watching on these Netflix and HBO series. For whatever reason, I don’t think they (the tracking companies) have taken the old media and traditional forms of research to online. I don’t think they are structuring it correctly. Maybe (conduct) more focus groups with the young people learning their viewing habits. (The tracking companies) say there are making changes, but I think it’s getting worse at it.”
The rise of social media to reach this generation was outlined before by this site. It’s also why Deadline is looking at marketing’s new Big Three — Facebook, YouTube and Twitter — via consulting companies such as RelishMix. Their deep data analysis on social sharing around a film or TV property can inject more information into the mix. Some tracking companies also look at Wikipedia views to determine interest.
Rising smart phone use has also changed viewing habits, said another distributor, adding that the tracking companies haven’t adapted to the implications of mobile media consumption and conversations. There’s another problem here too, as we get stuck in a self-perpetuating loop of inaccurate information, as the media repeatedly quote bad tracking numbers and then make predictions that end up way off too. Believe me, I would rather not try to predict box office based on numbers that are in the ether. I find it absolutely ridiculous all the way around, including this horse-race box office reporting that has become standard.
The guessing game of whether a picture beat estimates is all based on whether the tracking numbers are any good. They’re not, which creates a set of expectations based on bad information, affecting all box office reporting.
“Since there are no secrets anymore, you also have the press writing and putting pressure on the studios on what the film is supposed to do,” said a studio distribution president. “It puts everyone in a bad place. Tracking is the motivator and determining whether a movie is a success or not and to write a story that says, it might disappoint, well, what are they basing it on? They are basing it on tracking. But the press doesn’t understand at times that we didn’t get disappointed from an economic point of view. It’s only a disappointment based on f***ing tracking, and the tracking is a f***ing disaster.”
The distribution president is right. All that matters at the end of the day is profitability. That’s why Deadline looks at film profitability where we can (in stories like my colleague Mike Fleming’s “playoffs” for the most profitable movies of the year). But in a town that lives on perceptions and lies, real budget numbers for these movies and their financial structures are often complicated and very hard to get — but getting those numbers is the way to go. It would be wonderful to be able to have an entirely new ‘tracking’ company rise up — one that tracks only profitability — because that is all that matters at the end of the day to the company, the filmmakers, and the shareholders.
Years ago, when I was working at Variety (now Deadline’s corporate sibling), I actually spent months researching film profitability. This was back when journalists had the luxury of time to do investigative analysis … and what I found, as I’ve reported before, was that Robert Simonds — who is now starting a mini-major studio — had the best track record of profitability. Right now, the best profit-maker just might be Jason Blum, whose doing micro-to-low budget horror films like the Paranormal Activity and Insidious film series.
In Deadline’s box-office reports, we strive to look at pictures on the basis of profitability. It’s why we look for real budget numbers for analysis. If we don’t have time or cannot find them, we let you know when it is a studio-claimed number.
Here’s the rub: Budget numbers are often fudged as are marketing and distribution costs — all of it is done in the hope of hiding the perceived or real failures — so it takes digging. Both domestic and international box office are a film’s main revenue streams, and certainly are the best bet at recouping production, marketing and distribution costs, but there are other revenue streams as well.
The question that truly needs answering is whether the film will make money after all revenue streams are taken into account? The only way to determine that is to do breakdowns by final budgets (taking into account the tax incentives), financial structures, marketing and distribution costs, splits with the exhibitors, etc. Until that is considered a priority by the studios and the media, unfortunately, it will continue as is.
With millions at stake, the studios are justifiably outraged over what is happening. You cannot blame the marketing teams (except for maybe the creative) and the distribution teams when they develop strategies based on these flawed numbers. So how do you fix it? Anyone?
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