Case Problem # 1
Motion Picture Industry

In partial fulfillment of the course requirements in CPROBS1

Submitted by:

Group 5 C31
Aguilar, Samantha
Barandiaran, Vicente Laurel
Ong, Maryss
Sy, Martin Eldridge
Waga, Czarina Theresa

September 1, 2015

MOTION PICTURE INDUSTRY

The motion picture industry is a competitive business. More than 50 studios produce a total of 300 to 400 new motion pictures each year, and the financial success of each motion picture varies considerably. The opening weekend gross sales ($millions), the total gross sales ($millions), the number of theaters the movie was shown in, and the number of weeks the motion picture was in the top 60 for gross sales are common variables used to measure the success of a motion picture. Data collected for a sample of 100 motion pictures produced in 2005 are contained in the file named movies.

PERFORMANCE DATA FOR 10 MOTION PICTURES

Motion Picture | Opening Weekend Gross Sales($millions) | Total Gross Sales($millions) | Number of Theaters | Weeks in Top 60 | Coach Carter | 29.17 | 67.25 | 2574 | 16 | Ladies in Lavender | 0.15 | 6.65 | 119 | 22 | Batman Begins | 48.75 | 205.28 | 3858 | 18 | Unleashed | 10.90 | 24.47 | 1962 | 8 | Pretty Persuasion | 0.06 | 0.23 | 24 | 4 | Fever Pitch | 12.40 | 42.01 | 3275 | 14 | Harry Potter and the Goblet of Fire | 102.69 | 287.18 | 3858 | 13 | Monster-In-Law | 23.11 | 82.89 | 3424 | 16 | White Noise | 24.11 | 55.85 | 2279 | 7 | Mr. and Mrs. Smith | 50.34 | 186.22 | 3451 | 21 |

Use the tabular and graphical methods of descriptive statistics to learn how these variables contribute to the success of a motion picture. Include the following in your report.

1. Tabular and graphical summaries for each of the four variables along with a discussion of what each summary tells us about the motion picture industry. 2. A scatter diagram to explore the relationship between Total Gross Sales and Opening Weekend Gross Sales. Discuss. 3. A scatter diagram to explore the relationship between Total Gross Sales and Number of Theaters. Discuss. 4. A scatter diagram to explore the relationship between Total Gross Sales and Number of Weeks in the Top 60. Discuss.

1. Tabular and graphical summaries for each of the four variables along with a discussion of what each summary tells us about the motion picture industry.

Opening Weekend Gross Sales ($Millions) | Frequency | 0-20.50 | 4 | 20.51-41.00 | 3 | 41.01-61.50 | 2 | 61.51-82.00 | 0 | 82.01-102.50 | 0 | 102.51-123.00 | 1 |
Table 1: Frequency of Motion Pictures in Opening Weekend Gross Sales

Figure 1: Frequency of Motion Pictures in Opening Weekend Gross Sales

It is highly noticeable that most of the motion pictures fall within the 0 - 20.50 opening weekend gross sales mark which is the lowest of all 6 classes. Only 1 motion picture was able to reach the highest class and garnering between $102.51-123.00 M in gross sales in its opening weekend. This is a huge sign that the motion picture industry is highly competitive and would entail that movies would have to reach a certain standard for it to be highly sought after during its first weekend.

Total Gross Sales ($millions) | Frequency | 0-50 | 4 | 50.01-100 | 3 | 100.01-150 | 0 | 150.01-200 | 1 | 200.01-250 | 1 | 250.01-300 | 1 |
Table 2: Frequency of Motion Pictures in Total Gross Sales

Figure 2: Frequency of Motion Pictures on Total Gross Sales

It is evident that most of these motion pictures also fall under the 0-50 class. Based on our observations with Figure 1, it can be seen that the data is consistent. Most of the Motion Pictures were at the lowest class in the Opening Weekend Gross Sales and likewise, the same amount can be found in the lowest class of the Total Gross Sales. It can be deduced that opening weekend gross sales is a good basis of estimate as to how a motion picture’s total gross sales will be. Figure 2 also shows that it’s difficult to reach total gross sales in the higher classes due to many factors. It can be seen that only 1 motion picture was able to reach the highest class while 2 were able to trail behind it in the 4th and 5th highest classes. This, again, is consistent with our observations with the Opening Weekend Gross Sales where only 1 motion picture was able to reach the highest class. However, one can conclude that because of the competitiveness of the motion picture industry reaching the higher classes and brackets of total gross sales is a hit and miss opportunity.

Number of Theaters | Frequency | 0-500 | 2 | 501-1000 | 0 | 1001-1500 | 0 | 1501-2000 | 1 | 2001-2500 | 1 | 2501-3000 | 1 | 3001-3500 | 3 | 3501-4000 | 2 |

Table 3: Frequency of Motion Pictures in Number of Theaters

Figure 3: Frequency of Motion Pictures in Number of Theaters

Table 3 and Figure 3 show us that the class with the most motion pictures is the 3001-3500 or the second to the highest bracket. This means that three of the motion pictures were shown in this amount of theaters while only one was shown in every class of the three classes previous to it. There are many factors that can contribute to the number of theaters that motion pictures are shown at. In various places, theater rules and movie ratings vary based on culture, laws, and many more. Internally, it can also be based on the budget of the motion pictures filmmakers and companies.

Weeks in Top 60 | Frequency | 4-8 | 3 | 9-12 | 0 | 13-16 | 4 | 17-20 | 1 | 21-24 | 2 |
Table 4: Frequency of Motion Pictures in Weeks in Top 60

Figure 4: Frequency of Motion Pictures in Weeks in Top 60

The table above shows the frequency of the motion pictures in weeks in top 60. It can be seen that most of the motion pictures were in the Top 60 for 13-16 weeks, which is the middle class. In addition, it can also be observed that there is an equal number on the brackets before and after weeks 13-16. Given this information, it can be deduced that the motion picture industry is competitive and staying within the top 60 for long weeks would require a lot of factors. More commonly, motion pictures will stay in the top 60 for about 13 to 16 weeks while better movies will be able to move on to 17 to 24 weeks. It can also be noticed that Figure 4 shows only 2 motion pictures that were able to stay in the top 60 for 21-24 weeks and the same amount was able to reach 2501-4000 theaters (refer to Figure 3). It can be assumed that the number of theaters is also a good basis for the probability of staying longer in the top 60 due to the higher amount of people able to watch the film. This may not be true in all cases as it is highly dependent on the quality of the motion picture. In summary, these tabular and graphical data prove how competitive the motion picture industry is. Opening weekend gross sales, total sales, number of theaters reached, and the number of weeks in the top 60 all contribute to the success of a motion picture. Opening weekend gross sales is a good basis for the probable total sales of a motion picture while the number of theaters reached will play a major role in a motion picture’s stay in the top 60. These factors all contribute to the competitiveness of the motion picture industry and are essential to its success.

2. A scatter diagram to explore the relationship between Total Gross Sales and Opening Weekend Gross Sales. Discuss.
Scatter Diagram for the Total Gross Sales and the Opening Weekend Gross Sales

Out of all the 10 motion pictures listed, “Harry Potter and the Goblet of Fire” had the highest Opening Weekend Gross Sales and Total Gross Sales, while “Pretty Persuasion” had the lowest. It can also be seen that there are motion pictures that only had slight differences between their Opening Weekend Gross Sales and their Total Gross Sales, while the other motion pictures had much higher Total Gross Sales than their Opening Weekend Gross Sales, specifically “Mr. and Mrs. Smith” and “Batman Begins”.

The preceding scatter diagram shows that there is a positive relationship between the Total Gross Sales and the Opening Weekend Gross Sales. It is evident as well that high Opening Weekend Gross Sales of the 10 motion pictures listed are all associated with their Total Gross Sales. Although it shows a positive relationship, it doesn’t necessarily mean that it is a perfect positive relationship since the plotted data do not come in a straight line; hence, it can be called a strong positive relationship instead since consistency in increasing sales is still seen in the diagram.

3. A scatter diagram to explore the relationship between Total Gross Sales and Number of Theaters. Discuss.

How many theatres must a motion picture feature in to maximize total gross sales?

The relationship between both variables is positive (but only until 3800 theatres). The more theatres the motion picture is shown in, the more total gross sales earned. However if one were to use regression analysis, the slope of the curve is initially steep (0 to 2000 theatres) and then tapers off at about 3,800 theaters.

One can infer the following in order to maximize total gross sales:

A. One has to show the motion picture in at LEAST approximately 2,000 theaters.

Interpretation: A theater has to be convenient enough for moviegoers to watch the movie.

B. Showing the motion picture in more than 3,800 theatres does not seem to yield additional total gross sales.

Interpretation: There is a fixed number of moviegoers (who watch movies once only) in the theater communities.

4. Scatter Diagram for the Total Gross Sales and the No. of Weeks in Top 60
A scatter diagram to explore the relationship between Total Gross Sales and Number of Weeks in the Top 60. Discuss.

The scatter diagram regarding the total gross sales and the number of weeks in Top 60 indicates that there is no apparent relationship between them. It can be inferred though, that the longer the motion picture stays in the top 60, the higher total gross sales. However, not all motion pictures are associated with this inference.

Take “Harry Potter and the Goblet of Fire” and “Ladies in Lavender” as examples. It’s shown that “Ladies in Lavender” had the most number of weeks in the Top 60, while “Pretty Persuasion” had the least. Although “Ladies in Lavender” had the most number of weeks in the top 60, it only earned $150,000, which was second to the last in the total gross sales by the movies that were listed in this scattered diagram. With regards to “Pretty Persuasion”, it makes a lot of sense because the movie also had the least no. of weeks in the top 60.

Then we’ve got our highest income producer, “Harry Potter and the Goblet of Fire”, which earned an outstanding total of $120,690,000. ”Harry Potter and the Goblet of Fire” was by far, the highest income producer, despite not having the most number of weeks in the top 60. At a far second, we’ve got “Mr. and Mrs. Smith”, which earned $50,340,000. “Harry Potter and the Goblet of Fire” earned more than double of this movie even though “Mr. and Mrs. Smith” was in the top 60 per week an equivalent of 8 more times.