A new study out of Stanford Graduate School of Business asserts that most major movie studios routinely inflate opening weekend box office revenue. The analysis, "Inflation in Weekend Box Office Estimates," reveals that misreporting numbers is no new trend for Hollywood.
Looking at statistics culled from 1,000 films released between 2003 and 2010, authors Neil Malhotra and Edmund Helmer noted the practice of bragging on Sunday and coming clean on Monday was common in Hollywood. On average, the pair found that studios bolstered opening weekend numbers by 6.38 percent. Certain companies, including Sony and Rogue, were more generous, puffing up numbers by 7.9 percent.
Malhotra and his co-author posit that studios have a lot to gain by employing such an "optimistic" revenue reporting model, arguing that "inflation is substantially higher in the first weekend of release, when the incentives are greatest to generate positive word-of-mouth."
It's simple, really: make a movie seem like it was a bigger hit than it actually was, and people will (in theory) flock to see it.
"Buzz for the film can be generated by a good first-weekend performance and drive viewers to the theater in subsequent weeks," Malhotra said, adding, "So these studios often use opening weekend box office results in their advertising for the following week."
Sometimes, the studios go a little overboard. The researchers uncovered that in 2010 CBS Films reported a $2.14 million debut for its film "Extraordinary Measures." The movie brought in just $1.15 million. They also found that in 2008, Fathom Studios alleged its animated feature "Delgo" made $568,000 during its opening weekend. The real number was closer to $164,000.
Malhotra stopped short of calling the practice fraud, instead hoping to stimulate conversation.
"We are simply reporting an empirical regularity," Malhotra said. "Although our results are consistent with strategic behavior on the part of studios, the main purpose of the study is to stimulate additional discussion and inquiry by the media and the film industry." (via Home Media Magazine)
