I’ve been speaking with folks at two companies with very different approaches toward using and creating film revenue data. Both are important and insightful in different ways. The Numbers is a website combining many of the variables I’m taking into account with the film index. It has catalogued over 18,000 films, recording things like budget, release date, attachments, rating, genre and budget. It then goes on to report on their various revenue streams, including Box Office and DVD. While less reported on through the consumer-facing site, the underlying layer of data, named OpusData, also has some information about VOD sales.
While Box Office is widely available and reported on by many sources, DVD and VOD are much more elusive, so I was particularly interested in this part of the reporting. It appears the information about ancillary revenue is a combination of historical information and projections based on a survey of historicals and other factors. One service OpusData supplies is bespoke projections for production companies, distributors, researchers – basically anyone who has a focused interest in making an educated projection about an upcoming film project. Over years of classifying films along a fairly complex rubric and having access to real information regarding ancillary revenue, the system has learned enough about this to begin incorporating revenue projections beyond just box office in some cases. Perhaps even more exciting, the service also collects information and makes projections related to P&A spend, one of the pieces of data most difficult to find and validate in the film world. I am in the process of evaluating what OpusData offers and assuming I gain confidence in its validity and usefulness, I may incorporate these much-needed data into the index.
The Hollywood Stock Exchange (HSX) takes a very different approach to projecting film returns. Described as a game, the system uses a community-based approach to form an idea of how well or poorly specific films are expected to perform. Participants can buy and sell “shares” in everything from films, to actors, to opening weekends. As with most exchanges, betting against projects that one thinks is overvalued (commonly called “shorting”) is also allowed.
Depending on how widespread participation in this game becomes, one could make the same arguments about its efficiency as a financial exchange in which real money changes hands. It is important to understand the amount of bias embedded in the system, by virtue of the fact that shares are being “bought” and “sold” without any actual financial consequence to the trader. This can likely be solved for fairly simply. With enough participation by rational “investors”, something like HSX could end up projecting film revenue as well as if not more efficiently than other systems, though all of the underlying motivations for specific valuations may not be fully transparent. I am continuing to explore HSX’s data to see if there might be an opportunity to incorporate it into the information contributing to the index. In the meantime, it's been fun creating a portfolio of films and hone my summer blockbuster intuition.