Box Office: Demystifying ‘Word Of Mouth’

It’s age-old knowledge that the audience reaction to a film decides its long-term potential at the box office. Earlier, this would be referred to as “reports”, as in reports are good, mixed reports or poor reports. Today, the more correct term, “Word Of Mouth” (WOM), is being used to describe the impact of audience reactions on the long-term business of a film.

A good opening does not imply that the audiences liked a film, because an opening is entirely a function of the campaign’s buzz and appeal, which in turn is a function of starcast, promos, genre, music, director, banner, marketing budget, etc. Come the second day, the impact of WOM begins to kick in, albeit only just. But by the fourth day, the WOM around the film has spread like wild fire, and depending on how strong or weak it is, the box office holds or drops.

A large part of our film research work is around understanding the WOM of a film. In this piece, I attempt to answer only a few aspects related to it.

How do we measure WOM?

WOM is a score out of 100, referring to the percentage audiences who will definitely recommend to their friends that they watch the film in a theatre. This data is collected by us over the first four weeks after release of each film, across 19 cities in India. Over the last three years, 3 Idiots scores the highest on WOM at 91, while the other end of the spectrum includes films like Raavan (17), KLPD (20), Khatta Meetha (26), Joker (28) and Mausam (29).

Of course, we don’t ask the audience a direct Yes/No question. In India, asking that would mean getting a predominant “Yes” from most respondents. The WOM question is a proprietary five-point scale question, tested to correlate the WOM score with the actual box office. While I can’t share the question here, the results simply reflect the likeability of the film on a 0-100 scale.

Relationship between WOM and Lifetime Box Office

The relationship between WOM and Lifetime Box Office is a function of the scale of the film. The relationship varies for three types of films – 20 cr+ opening day, 5-19 cr opening day and 0-4 cr opening day. Below, I have used the middle segment (5-19 cr) to illustrate the relationship.

The table below captures how WOM impacts the Lifetime BO for this segment of films. A sample of 15 films released in 2012 has been chosen as a case study. Let’s understand what each column stands for.

  • Day 1 BO: Opening day nett collections of the film at the domestic box office.
  • Adjusted Day 1 BO: Since some films released on a holiday, or are affected by other factors (e.g. Diwali Puja), the Day 1 BO has to be adjusted to what it would have been had the film released on a normal working Friday.
  • Lifetime BO: Domestic nett lifetime box office of the film. The numbers for Jab Tak Hai Jaan and Son Of Sardaar are projections. Boxofficeindia.com has been used as the source for these figures.
  • Multiplier: Simply a ratio of Lifetime BO and Adjusted Day 1 BO. This multiplier represents how many times did the film ends up multiplying its first day’s business, after removing the holiday factor.
  • WOM: Actual WOM score of the film collected from theatre audiences (0-100).
  • Ratio: This is a ratio of WOM and Multiplier, whose significance I shall explain soon.

wom

As you can see, in this sample of 15 films, the WOM ranges from 78 to 28. Also, the multiplier ranges from 12.3 to 4.2. But what remains amazingly consistent is the “ratio”, which hovers between 6 and 7 for all films. What does this mean?

The consistency in the “ratio” implies that the WOM score can be used to accurately forecast the Lifetime BO of a film. All one needs to do is as follows. Divide the WOM of the film by 6.6 (average of “ratio” across 15 films) to get the multiplier. Multiply the Day 1 BO of the film with this multiplier, and you get its lifetime box office.

Let’s take Talaash’s example. The film did 12.5 cr on Day 1. If the WOM was a below-average 45, its lifetime business would be 12.5*(45/6.6) = 85 cr. However, if the WOM was a healthy 60, its lifetime business would be 12.5*(60/6.6) = 114 cr. If the film had to do a business of 100 cr, it will have to generate a WOM score of 100*6.6/12.5 = 53.

We start getting information on the WOM from Tuesday onwards after release. But it takes about a week for the score to settle down. For example, Son Of Sardaar showed a WOM of 70 after the first two days (which I tweeted as well), but eventually settled at a more modest score of 53. Let’s see where Talaash’s WOM settles, but wherever it does, rest assured that the lifetime BO will follow the relationship, driven by the magical 6.6 factor!

Implications for Producers

The key implication for a producer is that their box office task is clearly divided into two sub-tasks. One is to maximize the opening day through a good campaign, and second to maximize the WOM through a good (read audience-friendly) film. While a lot of focus is going on the first one today, the second part, which this article illustrates, is being left to a creative process with little consumer intervention.

This is where we believe the game can be changed. And this change has already started! We have “tested” more than 20 films in the last two years, where the focus is to pre-measure the WOM score, and to prescribe a series of changes in the content to improve the WOM score. For example, consider a film that scores a WOM of 42 in the research. The research will recommend a series of steps (linked to edit and possible re-shoot) to increase the WOM. If the changes were made, they can actually increase the WOM to about 50 in a typical case, which means a straight 19% jump in the film’s lifetime business, given the same opening day business.

Our product that achieves the pre-measurement of WOM and its analysis is called Moviescope. In another post, I will share how Moviescope works.

But meanwhile, it is suffice to say that much as the focus has shifted to the opening, content does play a crucial role in the lifetime business of a film. Just that “good content” in this case has to be defined from the audience’s perspective, not from that of the trade or the critics.

Advertisements

About Shailesh Kapoor

Founder & CEO - Ormax Media. Film Lover. Media Insights Detective. Budding Author. Lifelong Student.
This entry was posted in Films, Product Showcase, Research and tagged , . Bookmark the permalink.

10 Responses to Box Office: Demystifying ‘Word Of Mouth’

  1. Anonymous says:

    Shailesh,
    The consistency of that ratio ( 6.6 ) is indeed interesting but not unsurprising. To me the ratio suggests that post the first day’s performance WOM is the most important factor and it affects all films equally. I think you see this stable effect because you are measuring WOM until four weeks after the release, a rather long time, so a stable value emerges.
    But I would be more interested in say the same ratio calculated for the first WOM figures you receive and the dynamics of WOM itself ( I imagine an interaction of opening day and early WOM predicts late WOM itself)
    Also, when you think of 2012, I would like to see three additions into that table – Paan Singh, Vicky Donor and Kahaani .

    • On PST, VD and Kahaani, they have not been included because they are in the 0-4 cr category, where the relationship is not governed by 6.6, and is in fact non-linear and the subject of another post. The WOM of these films was PST = 71, Vicky Donor = 65, Kahaani = 75.
      Regarding your first point, the only reason we measure it over four weeks is for sample size robustness. No, there is no direct relationship between Day 1 and early WOM leading to late WOM. But yes, certain films (e.g. ones with good music) have higher early WOM and show a drop as the sample goes up, while story driven films are more consistent on WOM across the four weeks. But apart from this, there is no relationship that works across films.

      • Anonymous says:

        Fair point about 0-4 cr category . It is always interesting to see such “law like” patterns emerge in the study of aggregate audience behavior!

      • Apan says:

        Another possible reason besides sample size for measuring WOM over a long period of time maybe that on the first day/weekend, the film buffs(Those who watch a film within the first weekend are more likely to be regular film goers than those who watch a film in latter weeks) and fans of any star constitute a larger ratio of audience than latter days and hence can skew the WOM score. It can also be a case where the trailers cause unreasonable/lessened expectations and hence affect Word of Mouth scores in the initial days as in comparison to latter days where expectations are normalized after a considerable section of audience has seen the film.

  2. The lifetime BO prediction using a ratio seems interesting. But opening BO and WOM may be related to one another, so a strong BO opening will directly impact how WOM spreads. So the whole exercise of trying to manipulate one while the other stays constant may not be how it plays out – it is like the ‘under rated movie’ which one discovers randomly and then wonder why no one told you about it; it just didn’t get seeded enough. Also, Opening week is such a huge part of the films success that trying to influence the lifetime value after missing the first week may not really help, so there may be no getting away from trying to ‘buy the buzz’ through high decibel marketing.

    What may be interesting to see however is how the WOM scores impact outside of the 1st week. They may be a better measure of WOMs impact on revenues.

    • What you are saying essentially necessitates the three categories. So, the 0-4 cr film gets impacted very differently by WOM than the 5-20 cr film. Also, while the WOM may spread slow, the multiplier logic still holds, within a category. So a Teri Meri Kahaani / Joker show the same relationship as Jab Tak Hai Jaan or Rowdy Rathore.

  3. Kahaani has done more than the last 5 films tht u mentioned in the list….it means opening for a small film isn’t tht important compared to the big films…..wht does a successful film mean to u???

  4. this logic of urs shld be different for big films nowadays; if there is a star film releasing , fan’s of his arch rival dnt want it to do well…this is effecting the business by 10-20%

  5. Dishant says:

    Sir,
    Can you tell me the First, Second, Third and fourth week WOM of Talaash and Total also?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s