Florence Ordesh: Predicting A Movie’s Revenue

Mark Meets found this exceptional scholarly article written by film industry professional Florence Ordesh. It analyses the correlation between box office revenue with a movie’s budget and runtime.

To see how actor Florence Ordesh created a model that allows the industry to predict the expected revenue for a movie, based on the movies budget and runtime is fascinating.

Read an excerpt taken from her article below.

“I will analyze the budget and revenue of 5,176 movies, aiming to predict whether the size of a budget impacts revenue. I will also analyze whether a movies’ runtime effects the final box office revenue. Runtime is a very important aspect of a movie, with cinema prices reaching almost €13, producers need to know whether customers are willing to pay this money to watch shorter movies, or if they would prefer to get their full fees worth by watching a movie double the length.

Horror movies have an average runtime of 90 minutes, while the movie “IT” had a runtime of two hours and fifteen minutes – almost 50% longer than the average horror movie. “IT” also managed to gross $327,481,748 (IMDb, 2017) which is 50% above the average revenue for a movies’ box office return (Excel Data). Other examples of successful movies that ran over 2 hours are ‘Avatar’ and ‘Interstellar’. These movies grossed more in the box office than the average movie’s income for the same genre.

In order to conduct my analysis, I used excel 2016 and its tool pack Data Analysis. I ran a regression analysis that shows the revenues (dependent variable) according to runtime and budget (independent variables). I wanted to measure the dependent variable, and the most important variable is the output, which of course must be the revenue. The independent variables will affect that output (dependent variable); the variables that I want to study and correlate to the revenue, which in my case will be the runtime and budget.”

It is invaluable for producers to have the ability to predict whether the length and budget of a movie would affect the box office revenue. In this analysis of over 5,000 films, Florence Ordesh provides producers with a model that allows them to make that prediction.