Study Finds Film Critics May Have Significant Revenue Impact

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Fri, 10/19/2018 - 10:33 -- Nick Dager

A new study conducted as part of a School of Communication research course at Emerson College has found that film critics' moderate influence on movies can have a significant impact on box office revenue. While an earlier Emerson study found that film critics have a moderate influence on movie outcomes for wide releases, the revenue difference between movies with negative and positive reviews on opening weekend was an average of $23 million. The study also found a revenue difference of $83 million for total domestic gross revenue.

The sample included all wide releases and limited releases from 2015-2017, which consisted of 1,100 movies using data from The Numbers and critics' reviews from Rotten Tomatoes. The earlier study used a Pearson's correlation analysis to compare Rotten Tomatoes scores with a movie's first weekend gross revenue based on revenue per theater and its total domestic gross revenue. That study found that opening weekend results had a moderate correlation of 0.33 with Rotten Tomatoes scores for wide releases and 0.16 for limited releases. When compared to total domestic gross revenue, the research found a correlation of 0.37 for wide releases and 0.14 for limited releases.

In both analyses, negative reviews had more of an impact than positive reviews based on those movies with a rating of less than 80 percent and those with a rating of 80 percent or greater. Negative reviews for the first weekend had a correlation of 0.26 for wide releases and 0.21 for limited releases. The positive reviews only had a correlation of 0.03 for wide releases and 0.02 for limited releases but these findings were not statistically significant. When analyzing total domestic gross revenue, the negative reviews had a correlation of 0.29 for wide releases and 0.15 for limited releases. The positive reviews had a correlation of 0.12 for wide releases and 0.03 for limited releases but, like the findings for the first weekend, these results were not statistically significant either.

Despite this modest influence, a t-test on box office revenue was used to determine the difference between the sample means of negative and positive reviews, and whether they were statistically significant. While both wide releases and limited releases were analyzed, only the sample means of the wide releases were found to have a statistically significant difference. Again, these values were an average of $23 million for opening weekend revenue and $83 million for total domestic gross revenue with films receiving positive reviews earning statistically more money than films receiving negative reviews.

"Our initial study demonstrated the influence of a negativity bias in critics' reviews," said Owen Eagan, an executive-in-residence in the department of communication studies. "This is not surprising in light of loss aversion theory which states that when people are faced with risk they are more likely to avoid losses than they are to seek gains."

He added, "However, this study helps shed further light on this subject by quantifying that influence. For example, our analysis of wide releases found that negative reviews explain about seven percent and nine percent of the variability for opening weekend and total domestic gross revenue based on the r-squared figures. This can translate into millions of dollars given their mean differences of $23 million and $83 million between negative and positive reviews during these periods."