This document discusses key drivers of return on investment (ROI) in the film industry, including inherent marketability, playability, marketing message, campaign execution, and distribution. It provides information on measuring inherent marketability through concept testing and analyzing how franchises tend to have higher box office openings than original scripts. Production budgets can vary widely but screening performance and critic/user ratings are predictive of stronger box office returns and multipliers. Effective creative messaging and adequate media spending are also important for driving awareness and box office performance.

1. ROI in the Film Industry

2. ROI Drivers
 Inherent marketability
 Playability
 Marketing message
 Campaign execution
 Distribution

3. Inherent Marketability
Basic
concept
Talent
Franchise
impact

4. Measuring Inherent Marketability
Title/Stars Definite Interest
 Concept testing
 Materials testing
INTERVIEW
OUTLINE
Actor Awareness/Popularity
Title/Stars Interest
View Ad or Trailer
Interest Based on Exposure
Diagnostic and Communication
Questions

5. Franchises tend to have higher box office
Average Opening Box Office by
Franchise Rating Scale
= Avg. BO Opening ($MM)
$103
$64
$18
Franchise:
$24
$32
Original
Script
Note: From NRG historical dataset of ~500 titles from past five years.
Major
Sequel
* Using NRG’s franchise rating scale.

6. Production investments can have wildly different returns
Reported Production Budget vs. Opening Weekend Box Office
Production Budget $
Note: From NRG historical dataset of ~500 titles from past five years.

7. Moviegoers can help inform production decisions, ensuring
money is spent on the strongest elements
Example of elements being evaluated
Note: Example Only

8. Moviegoers’ input on production spending leads to a better
return on the investment
Helps you understand how much each element matters…
In this example, Romantic interest had the greatest impact on consumer choice
1
1 Director
5/6
2 Lead detective
7
3 Romantic interest
4 Serial killer
5 Mood
6 Action/Effects
2
3
4
7 Side plots
Note: Example Only

9. Strong performance at screenings is predictive of stronger box
office
Excellent Rating from Screening vs Box Office
Opening
Total
Excellent Rating Score from Screening
Note: From historical dataset of ~700 titles from past five years.

10. Films with higher critic ratings tend to have stronger box
office returns and a stronger multiplier
Critic Rating vs. Box Office
Millions
Opening
Total
X 4.4
X 3.0
X 2.8
X 2.5
Critic Rating (Rotten Tomatoes)
Note: From NRG historical dataset of ~500 titles from past five years.

11. Likewise, movies that have higher public user ratings also
have stronger box office returns and a stronger multiplier
User Rating vs. Box Office
Millions
Opening
Total
X 4.0
X 2.9
X 2.8
X 2.4
<4.0
4.0-5.5
5.5-7.0
7.0+
User Rating (IMDB)
Note: From NRG historical dataset of ~500 titles from past five years.

12. Ad creative strength is predictive of opening BO
Average Opening Box Office
Post Definite Interest TV Spots
= Avg. BO Opening ($MM)
$54
$18
$26
$13
General Audience
Post Interest
<40
40-49
Note: From NRG historical dataset of ~175 titles from past five years.
50-59
60+

13. Effective creative makes a bigger difference for dramas and
comedies than for other genres
Net Impact of Marketing Message on Box Office
(Relative Index)
index
Drama Comedy
Family Romance
Action
Horror Suspense
Note: Assuming equivalent opening weekend grosses across films. Impact derived from NRG historical dataset of ~500 titles from past five years.

14. Media activity is important for driving awareness
Total Awareness at Opening by Media Spend
Awareness
Pre-release media spending
Note: From NRG historical dataset of ~500 titles from past five years.