The Importance Of Online Reviews

In the wake of digital age, the internet offers a relatively complete and comprehensive environment for people all over the world to communicate and share information. The form of film review is reforming as well. From traditional critics of experts to review of ordinary audience (Awad, Dellarocas & Zhang, 2004), cyber world offers a newly effective channel for audience sharing their comments about movies; cinema industry also encounters more challenges on box office from consumers (Boatwright, Kamakura & Basuroy, 2005). For film industry, online review of critical audiences plays an important role. On one hand, the good comments of a movie can attract more audiences in general. On the other hand, the good comments do not necessary mean high box revenue and vice verse. The impact of film review has been proved by previous study on motion pictures (Litman, 1983; Eliashberg, & Shugan, 1997; Basuroy, Chatterjee, & Ravid, 2003; Desai, & Basuroy, 2005; Gemser & Gerda, 2007). However, most study tends to research film review from traditional critic review of journals or other form of articles while less study approach to the impact of online review on box office success. Within this paper, I approach to explore the correlation between the online review of new social media and the box office success of different types of movie. Although there are previous researches about the influence of online review on box office, those researches tend to study the whole catalog of film. In differ from previous research, the target of this paper is to find out to what extent online review could influence box office success and whether the impacts of different types of movies are the same.

According to Gino and Ferrian’ research (2006), new social media can reflect the successful of the movie to a great extent. Audience’s preferences and tastes can and stimulate final box office as much as the most positive comments from newspaper. Comparing with traditional media, such as articles written by critics or reporters on influential newspaper and magazine, obviously new social media is more powerful and covers a lager scope of audiences. By offering the opportunity to share preferences among ordinary audience, online movie database has established (www.IMDb.com). In the next couple of years, IMDb has expanded fast and became the best known platform for sharing information of the movie. The famous TOP 250 Movies list represents the best movies around. By cooperating with major film company and convenient operating platform, it has been recognized by both experts and audiences. The online ranking order of movies in IMDb, as the most direct and transparent approach to reflect the positive or negative review of movie, is decided by normal audience worldwide.

Due to the reliability and authoritative data of IMDb, this paper focus on online ranking order of IMDb. By dividing the first 100 movies of TOP 250 Movies into different catalogs which are artistic film and commercial film, the paper tests the correlation between the box office and the four independent box office drivers that are production budget, awards obtained, MAPP rating and online ranking order. In order to explore the correlation, this paper uses two equations for multiple regression analysis to test the possible difference between artistic film and commercial film by running SPSS. Comparing the results of outputs, there is statistical significance of both kinds of film. However, for artistic film, online ranking order has relatively less impact on box office while the most important determinant is awards. Meanwhile, the result of commercial film shows the strongest correlation between online ranking order and box office success comparing with other determinants. Thus, I conclude that higher online ranking order indicates higher box office of commercial film. As for artistic film, how many awards it obtained is the most important reason for box office. To be admitted, there are some limitations of the paper due to the small sample size of the research.

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Literature review

2.1 Artistic film and commercial film

Film industry as an important part of creative industry has created huge fortune in both material and psychological of human contemporary history. Although there are plenty of types of movie and different catalog involved, considering the high marketing participation, film industry classifies two catalogs which can generalize all are types of movie. The two catalogs are labeled as “major” and “independent” films (Zuckerman & Kim, 2003), or “art house” and “mainstream” films (Gemser, Oostrum & Leenders, 2007). The reason of the different names attributes to the slightly difference about definition and criteria. However, those differences reflect the degree of “artistic” and “commercial” of a film (Bagella & Becchetti, 1999). Thus, artistic and commercial film can be summarized as the most applicable assortment for film industry. Within this paper, I apply the concept of artistic film and commercial film on my research target since it is a relatively comprehensive classification.

According to the author of Cinema of Outsiders: The Rise of American Independent Film, who had interviewed dozens of independent director and film researcher, whether a film could be defined as artistic or commercial film can be judged from two aspects. One is based on the way indies1 are financed, the other focuses on their spirit or vision (Emanuel Levy, 1999). The former concept refers to marketing issues including distribution and budget. While the latter one tends to be a abstract definition which is the fresh perspective, innovative spirit and personal vision that are determining factors. Since the concept is too ambiguous, the distinction between artistic film and commercial sometimes to be blurred to a great extent. Even a number of insiders of film industry tend to ignore the difference between artistic film and commercial film. Joseph Burstyn, a film distributor offered his point of view about artistic film. He said, “I hate the expression ‘art film’… there are only two kinds, good films and bad films”. Based on his opinion, there is no fixed meaning of art film. And obviously the concept of art film and commercial is flexible because of the increasing complexity of producing a film due to the financial issue of the film.

Nevertheless, there still are certain standards for distinguishing artistic film and commercial film according to previous study. The factors might determine whether a film belongs to artistic film or commercial film refers to several more practical elements that contain production budget and advertizing effect (Geer, 1998), the participation of super stars and award-winning situation (Bagella & Becchetti, 1999), the number of released screen (Reinstein & Snyder, 2005), or the story line and the narrative structure of the movie (Bordwell & Thompson, 2001). Those elements construct the standards of judging whether a movie is an artistic or a commercial one. And the two types of film construct the success of movie industry.

Since there are different criteria of artistic film and commercial film, the box office success, the potential influence, and the reputation are distinct. Traditional concept about artistic film tends to be closed to the definition of independent movie which indicates independent production without any financial support of the eight major film company, MGM (Metro-Goldwyn-Mayer), Paramount, 20th century Fox, Warner Brothers, RKO (Radio-Keith-Orpheum), Universal, United Artists, Columbia Pictures (Levy, 2001). However, throughout the development of the century, the eight companies have been through broken, emerged and rebuilt. The concept is not suitable anymore. In my research, I only focus on the distinction of box office success between the artistic film and commercial film by texting different determinants of box revenue. In order to research the correlation between online review and different types of film, which are artistic film and commercial, I consider three elements which are production budget, language (English/non-English) and the number of released screen as the criteria that can classify all the films preciously into artistic film and commercial film. Since I conduct quantitative research in this paper, the three factors could offer a clarity standard for classifying artistic film and commercial film.

2.2 The function of film review

First of all, film as information good has an important characteristic, which is experience good. The feature of experience good is that consumers must experience it before they know what it is (Hal, 1998). This factor results in a permanent problem which is incomplete pre-purchase information. Thus, reviews of film help overcoming this problem to a great extent. By providing evaluations and comments to potential consumers are ubiquitous in digital age (Hal, 1998). Although it is still a limited access for consumers getting to know the product, reviews play a curial role in the whole film industry, especially before video image became popular.

Due to the importance of review in film industry, there are plenty of studies and researches about the influence of film reviews. To be more specific, most researches discover the relationship between reviews and box office success. And the result proved to be positive in most cases (Wyatt, 1991). Nevertheless, there are a number of different study implies opposite result of the correlation between box office success and positive review. Negative or positive review does not indicate the significant relationship between box office success and the movie performance. For instance, Transformer as one of the best known profitable series of film history did not earn too much positive review from professional experts or public. However, the worldwide box office of Transformer reached 836,297,228 US dollars worldwide, four times more than production budget, according to official data collection of IMDb. Most study about how review impacts box office tends to have the similar conclusion that there is significant-but-weak association between judgments of reviewers and box office success (Holbrook, 2007). Based on previous research, there is a significantly positive correlation between the average of ratings in two critical guidebooks and distribution rentals (Prag & Casavant, 1994). On the other hand, there are evidence indicating a negative relation between the earnings of selected films and their critical evaluation, which could be explained by the application of technical and analytical considerations and stringent artistic standards in critical evaluations, whereas audiences looked simply for enjoyable entertainment (Hirschman & Pieros, 1985). To explain the different result, there is the assumption that ordinary consumers like more accessible, realistic forms of entertainment, while professional critics give higher ratings to more complex, abstract, and intellectually demanding artwork (Holbrook, 1999).

Despite of previous research on correlation between box office success and review, the perspective of the research is prone to focus on favorability of journalistic reviews or judgments of film experts (Prag & Casavant, 1994). There are relatively less researches concerning about public’s review. Due to the popularity of internet, audiences are able to share their review and preference through the internet instantly. Holbrook concludes audience’s opinion towards motion picture as “popular appeal” which contains online rating and review.

The popularity of online review is the nature consequence of digital age. Neoclassic theory emphases the importance of demand induces. As for film industry, companies pay attention on the importance of marketing power even more than products themselves (Belaux & Marteaux, 2007). Thus, there has been a growing increase in the emphasis of web-related promotion for nowadays film industry (Zufryden, 2000). Zufryden (2000) did the research on the development and empirical testing of a variable mathematical model approach for predicting a film’s box-office performance as a function of film website activity, as well as other relevant explanatory variables. The results of his study support the relative importance and statistical significance of website activity as a predictor of a new film’s box-office performance. In accordance with promotion of website, variables including screens, film “grade”, time from film release, production budget and seasonally were also found to be significant covariates in the prediction of ticket sales during a film’s life cycle. Obviously, online review and ranking system account for an important part of variables that can influence box office success according to Zufryden’s research.

Moreover, Holbrook (1999) summarizes different types of film review according to multiple cultural markets of distinction (Hall, 1992): professional critics versus ordinary consumers, expert judgments versus popular appeal, extensive training versus naive appreciation, emphasis on aesthetics versus entertainment, genuine or pure versus commercial or commoditized art, highbrow versus lowbrow standards, elite versus mass tastes, legitimation versus market success, dominance via cultural capital versus economic capital, autonomous versus heteronomous principle, and restricted versus large-scale production. Own to those different concepts, film reviewers have their own opinions about certain film. The ordinary audience in question does not share in the relevant habits governing the dispositions that guide the professional critic’s standards of evaluation. Therefore, the different judgments from ordinary consumers are quite personal. However, the influence of those judgments can be differed according to different tastes. Holbrook (1999) compared popular appeal representing ordinary consumers and expert judgment in order to analyze the most importance variable for box office success. The data Holbrook collected for conducting research focus on polls of film viewers. Since his paper has published in 1999, one year from the establishment of IMDB, the best popular internet movie database, which involves film grade and audience’s review. Therefore, there is a gap of studying to what extent online review system can impact a film’s box office success. My research in this paper would try to fulfill this missing part.

The development of IMDB

The IMDB has become one of the most popular forums for on-line interaction. The popularity of a movie can be gauged by the number of votes. The establishing of IMDB can be trace back to the late 1980s and early 1990s. Col Needham, the founder of IMDB, created a database that sought to provide useful and up to date movie information online across as many platforms as possible (Dodds, 2006). Since the year of 1990, the technology of constructing web site has developed speedy. Col Needham as a big fan of movie believed that there should be a place in cyber world to offer a free land for sharing ordinary audience’s comments2. Therefore, IMDB has been created and expanded quickly since then. Firstly, the IMBD includes new features such as votes awarded to individual films. Later in 1995, it was formally launched and the Amazon.com Company subsequently bought it in the 1998. The site has been further enhanced to allow for greater on-line interaction as well as additional features providing updates on movie releases and film gossip (Dodds, 2006). Till now, IMDB import Metacritic, a similar movie database but focus on judgment of professional movie review like authoritative movie magazines and journals. Although there is increasing number of competitive online movie database, IMDB is still the most reliable, recognizable, professional and comprehensive online movie community containing the largest users and offering the best platform for sharing information and interaction.

The ranking system of IMDB represents audience’s opinion. The famous Top 250 list indicates the best movie in the history throughout time, culture and races. And the option belongs to ordinary audience. The top 250 films are also based on a weighted rating formula referred to in actuarial science as a credibility formula (Norberg, 2007). In order to create a fair and reliable grading system, IMDB sets a formula to calculate the final result of the movie as the following equation:

This formula is equivalent to a Bayesian posterior mean3. In this equation, represents weighted rating, which means final score of the movie. means rating, represents average for the movie as a number from 0 to 10 (mean). refers to number of votes for the movie, more votes represents more influence. indicates minimum votes required to be listed in the Top 250, the current entrance is 3000 votes. is the mean vote across the whole report (currently 6.9)4.

Because of my research focus on box office success and online review while IMDB includes all the official data and information, I introduced the brief history of IMDB and rating equation in order to convince people the reliability of this database.

Determinants of the successful box office success

Investing film industry has been considered as higher risk business even more than stock. Pervious study indicates that only three to four out of ten movies could reach breaking even point, and about one out of ten becoming profitable at the box office success (Valenti, 2004). Although film producers make profit through various channels such as DVD sales and sound track CD or any other related business. Box office still accounts for the largest part of gross revenue for the film market. Furthermore, box office success has been related to the successful of the movie itself to a great extent. Talking about the standards of a good movie, there are diversity of criteria according to different scholar and the era they lived in. In the last century, three indicators of judging success of a movie which are the reviews of professional critics, the size of audience and industry recognition via awards (Hirschman & Pieros, 1985). The relationship among the three indicators has certain order. Firstly reviews of critics come out, followed by amount of audience and finally awards prove the success of the movie. Besides, the three indicators have inside impact on each other as well. As for the determinants of motion picture in the 21st century, there are a number of detailed factors from several disciplines have been used in the literature to understand and explain various aspects of motion picture success (Hennig-Thurau, Houston & Walsh, 2007). In general, there are three groups of “movie-success drivers” have been recognized in this century. The three determinants are movie characteristics, post-filming marketing studio actions, and non-studio factors (Elberse & Eliashberg, 2002; Hennig-Thurau, 2001). Movie characteristics refer to star power, director power, cultural familiarity, genre, and certification. However, the research of questioning whether star power related to a successful movie has been published (De Vany & Walls, 1999). As for director power, so far there is no empirical evidence about a successful movie on economy can be decided by director. The second determinant studio actions are the term including the production budget, marketing expenditures, timing, and the number of screens. Finally, non-studio factors contain reviews, awards, consumers’ perceived movie quality, and early box-office information. The Academy Awards tend to represent a compromise between art and commerce (Caves, 2000). Audience’s review does ascend the movie’s opportunity on obtaining an award. In another word, audience’s voice has equal importance as expert’s judgment.

Sony picture indicates that the insiders of film industry believe that movie review is important for box office success (Terry, Butler & Armond, 2005). Combining the indication of Sony, one of the largest film companies in the world, the output of commercial film tends to prove Sony’s standpoint. Firstly, there is statistic significance according to the output. And R-square is 0.694 which indicates 69.4 percentages dependent variable, in this case, box office, can be explained by the four box office drivers. In another words, the four determinants are major drivers of box office for commercial film. Production budget still has less importance comparing with other independent variables. Meanwhile, awards have positive and strong impact on box office of commercial film as artistic film. However, table 6 shows that among the four elements, the strongest correlation exists between box office and online ranking order. For commercial film, online ranking is the strongest box office driver, far more than artistic film.

Comparing the outputs of artistic film and commercial film, online ranking order has less influence on artistic film while the strongest determinants of commercial film. Meanwhile, the higher online ranking order do result in better box office success in both artistic film and commercial film. Especially, for commercial film, the recognition from audience attributes to box office to the largest extent. Although there are some distinguish cases, the tendency of impact of online ranking order is quite clear according to the research.

Conclusion

Summary

Online ranking order as the direct and clarify symbol of online review provides important information for audience. This paper tests the correlation between online ranking order and box office success by comparing online ranking order with other determinants of box office. Throughout running multiple regression analysis in SPSS, the result indicates online ranking order has stronger impact on commercial film while less important for artistic film. However, high online ranking order contributes to higher box office in general for any kinds of movie.

Limitations

This paper only includes four major determinants of box office success. However, other determinants such as released screen, released date, star power and region are also contributing to the box office success. Due to the limited words and research time, there are more important indicators are excluded. Besides, the result could be less trusted and accurate because of relatively small sample size. Furthermore, due to the producing time of some movies are quite old, the lack of some data and currency rate might lead to different results slightly.