Movies: Nobody Knows Anything

Via Brad DeLong, a piece in the LA Times that covers some of the ground I cover  about movies in Chapter 9, although the LA Times has better stories. Here are a few excerpts, but it’s worth reading the whole thing:

That no one can know whether a film will hit or miss has been an
uncomfortable suspicion in Hollywood at least since novelist and
screenwriter William Goldman enunciated it in his classic 1983 book
"Adventures in the Screen Trade." If Goldman is right and a future
film’s performance is unpredictable, then there is no way studio
executives or producers, despite all their swagger, can have a better
track record at choosing projects than an ape throwing darts at a
dartboard.

That’s a bold statement, but these days it is hardly conjecture: With
each passing year the unpredictability of film revenue is supported by
more and more academic research…

What the research shows is that even the most professionally made films
are subject to many unpredictable factors that arise during production
and marketing, not to mention the inscrutable taste of the audience. It
is these unknowns that obliterate the ability to foretell the
box-office future.

But if picking films is like randomly tossing darts, why do some people
hit the bull’s-eye more often than others? For the same reason that in
a group of apes tossing darts, some apes will do better than others.
The answer has nothing to do with skill. Even random events occur in
clusters and streaks.

Imagine this game: We line up 20,000 moviegoers who, one by one, flip a
coin. If the coin lands heads, they see "X-Men"; if the coin lands
tails, it’s "The Da Vinci Code." Since the coin has an equal chance of
coming up either way, you might think that in this experimental
box-office war each film should be in the lead about 10,000 times. But
the mathematics of randomness says otherwise: The most probable number
of lead changes is zero, and it is 88 times more probable that one of
the two films will lead through all 20,000 customers than that each
film leads 10,000 times. The lesson I teach in my course is that the
fairness of the goddess of fortune is expressed not in alternations of
the lead but in the symmetry of probabilities: Each film is equally
likely to be the one that grabs and keeps the lead.

If the mathematics is counterintuitive, reality is even worse, because
a funny thing happens when a random process such as the coin-flipping
experiment is actually carried out: The symmetry of fairness is broken
and one of the films becomes the winner. Even in situations like this,
in which we know there is no "reason" that the coin flips should favor
one film over the other, psychologists have shown that the temptation
to concoct imagined reasons to account for skewed data and other
patterns is often overwhelming.

In science, data are not accepted as meaningful if they’re the result
of chance alone. People in the film industry are diligent about
gathering data, but are far less skilled at understanding what the
numbers mean. The fact is, financial success or failure in Hollywood is
determined less by anyone’s skill to pick hits, or lack thereof, than
by the random nature of the universe. The typical patterns of
randomness—apparent hot or cold streaks, or the bunching of data into
clusters—are routinely misinterpreted and, worse, acted upon as if a
new trend had been discovered or a new epiphany achieved. And so,
despite a growing body of evidence that box-office revenue follows the
laws of chaotic systems, meaning that it is inherently unpredictable,
the superstructure of Hollywood’s culture—that pervasive worship of
who’s hot and the shunning of who’s not—continues to rest on a
foundation of misconception and mirage.

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