How do US Box Office Trends compare to the Rest of the World?

HollywoodSign

Over the past few years the worldwide box office has increased its share of the box office pie. As a result the importance of the foreign market is increasing for Hollywood studios and they are increasingly looking at trends in emerging markets like China to try and maximise revenue.

There are a few different things we might consider when comparing the two markets. In trying to answer these questions I have looked at the Top 20 Grossing Movies Worldwide in 2012*. From doing so I’m hoping we can spot some differences in trends between the two regions.

1) Who is More Influenced By Critics, America or The Rest of the World?

To try and answer this question, I’ve aggregated the scores on RT Tomatoes for the Top 20 Films. I then plotted them to the Box Office Revenues in the US and Worldwide. Here are the results:

USBoxOffice2012RT

RoWBoxOffice2012RT

Unfortunately, as you can hopefully see from the distance between the Trend Lines and most of the points on both graphs, there’s not much of a correlation here.

The R2 value confirms this. “What is R2?” you may ask. It tells us the strength of the correlation, so the closer it is to 1, the more reliable the Trend Line is in telling us the relationship between the two variables (in this case Box Office Revenue and the Rotten Tomatoes Score).

R2 for Rest of the World is 0.042. This is very low and so tells us there is very little relationship between box office receipts and the critics on Rotten Tomatoes. In the US, there is more of a relationship between critics and box office revenue with an R2 value of 0.1734. However, it’s still pretty low.

The other thing you might notice from the graph is the formula that tries to put into numbers the relationship between the variables. As we have just seen (based on R2) this is a pretty poor approximation in both cases. However, were we to use it, we’d see since the the coefficient of x (or the number in front of x) is higher for the US graph. This would suggest audiences are more influenced by critics in the US.

You may quite rightly ask isn’t “being more influenced” (as seen by the higher gradient) the same as “having more of a relationship” (as seen by the higher R2)? Well, no. The R2 value tells us the reliability of the formula we have. However, that formula could well have a negative gradient which would suggest in this case the better the critics think a film is, the less likely audiences are to see it.

Apologies if this has all got too technical, but the take home message is these graphs show that in 2012 audiences in the US were slightly more influenced by critics. However, neither graph makes a very compelling case for the influence of these experts on the habits of the cinema-going public.

As a quick aside one should also note that Rotten Tomatoes is an American site with a high number of American critics. So we cannot discount the fact critics in other countries may think higher of the most popular films than their US counterparts.

2) Who Likes Sequels More, America or the Rest of the World?

To help decide this, I decided to look at the percentage of box office that was made up of American revenue for original films compared to sequels. Here’s the results:

BoxOffice2012OriginalsSequels

You can see from this that original films can expect a higher percentage of their revenue to come from the US (39%), compared with sequels (32%). This essentially means the Rest of the World are happier to watch established franchises relative to American audiences.

This trend helps explain one of the biggest box office trends of the past ten years, which is the performance of sequels in the worldwide box office. Perhaps it isn’t surprising that as we see the American market become less influential, we are also seeing less and less original films in the Top 10 Highest Grossing Films each year.

So the Rest of the World seems to like sequels more. This, combined with their increasing share of the market in comparison to the U.S., helps explain the increasing number of non-original films we are seeing in the cinemas. After all Hollywood, like any sensible business, works off supply and demand.

Closing Remarks

From the two graphs we have seen that critics had a very limited impact on cinema-goers in 2012. However, we can say that Americans did listen to critics slightly more and have more of a preference for original films. This perhaps goes against a narrative here in the UK that depicts American cinema-goers as less discerning than the rest of the world. Maybe it is us, and not them, that needs to change?

*NB, I decided to take out The Intouchables, a very high grossing French movie, as it was an outlier for all my results. This is common practice in statistics when a result is so different to the rest as to skew the overall results.

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