Box Office Profit Projection

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December 27, 2007

Weather & Film Box Office Revenue:

The impact of precipitation an temperature on !" film box office revenue

B# WeatherBill

Weather & Film Box Office Revenue in the !"

$



December 27, 2007

Weather & Film Box Office Revenue:

The impact of precipitation an temperature on !" film box office revenueB# WeatherBill

%%'!T()% *!++R-

WeatherBill anal#.e nearl# $0 #ear/ of box office ata from the !nite "inom to ientif# the effect of

1eather on revenue from each 1eeen3/ $0 top4ro//in film/5 (t 1a/ foun that both temperature an

precipitation have ha an impact on box office total/5 +ovie/ in the box office top $0 earne /inificantl# le//

than expecte on particularl# 1arm or unu/uall# r# 1eeen/5 Time of #ear al/o pla#e a role in ho1

temperature an precipitation affecte box office revenue 6 revenue urin /ummer month/ turne out to be

particularl# /u/ceptible to the effect/ of 1eather5

TB% OF 'O8T%8T*

9 (ntrouction //umption/

7 +ethoolo#

; nal#/i/ b# box office ran $0 nal#/i/ b# month

2



(8TROD!'T(O8

+ovie theater ami//ion/ in the !nite "inom reache a <04#ear hih of 05; million vie1er/ in the /ummer

of 20075 Film inu/tr# expert/ /peculate that auience/ 1ere motivate to /ee inoor entertainment becau/e of

the /ummer=/ recor4/ettin inclement 1eather5 2007 1a/ the 1ette/t /ummer in the !" /ince recor/ bean in

$>$< an uu/t 2007 1a/ the cole/t in more than a ecae5 The iea of 1eather motivatin or i/courain

filmoer/ an thu/ impactin box office revenue ha/ hi/toricall# been /peculative5 ittle evience, an le//

anal#/i/, ha/ been compile on the impact of 1eather on box office revenue5

(n thi/ /tu#, WeatherBill formall# a//e//e the effect of 1eather on box office receipt/, ientif#in /pecific

1eather trier/, an ?uantif#in the impact5

WeatherBill a//emble ata on top4ro//in film/ in the !nite "inom from the (nternet +ovie Databa/e3/

!" box office archive5$ The !nite "inom 1a/ /pecificall# /electe a/ the /ub@ect of thi/ /tu# ue to the

combination of the relative uniformit# of reional climate conition/ throuh the !" an the availabilit# of

etaile box office ata5 The lac of etaile an acce//ible reional box office ata in the !nite *tate/ mae/ a

riorou/ anal#/i/ more ifficult5 For each 1eeen bet1een Aanuar# $>>; an Aul# 2007, the ataba/e provie

the follo1in five /tati/tic/ for each of the $0 top4ro//in film/ at the !" box office:

• the film3/ total 1eeen revenue in the !" the /um of revenue/ from Fria#, *atura#, an *una# ofthe iven 1eeC,

• the film3/ ran ba/e on revenueC 1ithin the $0 top4ro//in film/,

• the number of 1ee/ the film ha been out in movie theater/ in the !",

• the number of /creen/ in the !" on 1hich the film 1a/ pla#in, an

• the film3/ cumulative !" box office revenue 1hich inclue the current 1eeenC5

Dail# mean temperature reain/ from the +et Office ale# 'entre 'entral %nlan Temperature '%TC /erie/

1ere then a//emble for u/e a/ one pertinent 1eather variable in the anal#/i/52 The fiure/ reporte in thi/ /erie/

are b# no mean/ repre/entative of the entire !nite "inom, but the# o clo/el# approximate the conition/ in

the trianular area enclo/e b# onon, Bri/tol, an anca/hire5 ccorin to the !" Film 'ouncil3/ 200E42007

*tati/tical -earboo 9, the reion/ of onon, the +ilan/, an anca/hire toether accounte for over half of

all !" movie theater ami//ion/ in 200E5 *o a/ the/e reion/ account for the ma@orit# of !" movie theaterami//ion/, the '%T 1a/ utili.e a/ the temperature mea/ure, eepin in min that more ranular ata on

temperature variation an the i/tribution of box office revenue 1oul liel# onl# /trenthen the eneral re/ult/5

B# the /ame rea/onin, the amount of rain reporte ail# at onon eathro1 airport 1a/ u/e a/ the mea/ure

of precipitation, a/ the onon reion alone accounte for over one ?uarter of all !" movie theater ami//ion/

in 200E, aain accorin to the !" Film 'ouncil5

Before embarin on an# /uch anal#/i/, it i/ important fir/t to uner/tan the unerl#in climate norm/ in thi/

'entral %nlan reion in orer to put into per/pective 1hat 1oul be reare a/ 1arm 1eatherG or a rain#

a#5G Table $ belo1 ive/ the monthl# averae 'entral %nlan Temperature, an averae of the ail# mean

temperature 1ithin each month over the pa/t 90 #ear/5 Table 2 ive/ the averae ail# rainfall for each month

over the pa/t 90 #ear/ a/ 1ell a/ the averae fre?uenc# of rain# a#/ in each month 1here rain#G here i/ taen

to mean there 1a/ an# precipitation at all5C

$http:HHimb5comHboxofficeHcalenarIreionJu

2http:HH1115metoffice5ov5uHre/earchHhale#centreHob/ataHcet5html

9http:HH1115ufilmcouncil5or5uHinformationH/tati/tic/H#earbooHI#J200E9

http://imdb.com/boxoffice/calendar?region=uk

http://www.metoffice.gov.uk/research/hadleycentre/obsdata/cet.html

http://www.ukfilmcouncil.org.uk/information/statistics/yearbook/?y=2006

http://imdb.com/boxoffice/calendar?region=uk

http://www.metoffice.gov.uk/research/hadleycentre/obsdata/cet.html

http://www.ukfilmcouncil.org.uk/information/statistics/yearbook/?y=2006



TABLE 1: Central England Temperature 30 year averages

TABLE 2: Average monthly rain at London Heathrow airport

%nlan ha/ a enerall# mil maritime climate5 (n orer to ?uantif# ho1 unu/ual 1eather impact/ box office

revenue, it 1a/ important to con/ier 1hat conition/ 1oul ?ualif# a/ anomalou/ 1eatherKnamel#,

particularl# 1arm or r# 1eeen/5

<

January 4.3 39.7

February 4.3 39.8March 6.4 43.6

April 8.4 47.0

May 11.5 52.8

June 14.4 57.9

July 16.6 61.9

August 16.3 61.4

September 14.0 57.2

October 10.7 51.3

November 7.1 44.8

December 4.9 40.8

average daily meantemperature

(Celsius)

average daily meantemperature

(Fahrenheit)

January 0.17 0.07 76%

February 0.14 0.05 72%

March 0.14 0.06 68%

April 0.14 0.06 62%

May 0.16 0.06 61%

June 0.16 0.06 58%

July 0.14 0.05 53%

August 0.16 0.06 52%

September 0.16 0.06 58%

October 0.22 0.09 68%

November 0.18 0.07 75%

December 0.19 0.07 76%

average daily

rainall (cm)

average daily

rainall (inches)

percent o days

that are rainy



**!+LT(O8*

The linear rere//ion frame1or allo1/ for compari/on/ acro// ver# ifferent film/, provie the moel

incorporatin all of the eterminant/ of box office revenue i/ inclue5 Thu/, the/e other effect/ can be hel

con/tant an their impact on revenue can be i/entanle from the effect/ of temperature an precipitation5

While no /inle ob@ective mea/ure can perfectl# preict ho1 1ell a iven film 1ill o at the box office,

incluin mea/ure/ of popularit#G an /ea/onalit#G /houl o a rea/onable @ob of capturin the/e other effect/,

an the rere//ion output /houl #iel the i/olate effect/ of temperature an precipitation on box office revenue,a//umin all el/e to be e?ual5

To control for a film3/ popularit#, the rere//ion a variable for the number of 1ee/ the film ha been pla#in

1a/ inclue, becau/e a film3/ 1eeen revenue i/ expecte to fall the loner it ha/ been in relea/e5 l/o

inclue 1ere mea/ure/ of the number of /creen/ on 1hich the film 1a/ pla#in that 1eeen an the

cumulative revenue the film ha mae5 Taen toether, the/e e/criptive /tati/tic/ act a/ a prox# for the film3/

popularit#5 %ven ver# popular film/ that /lip o1n in ranin/ over time 1ill have cumulative revenue/ that are

hiher than expecte for a iven number of 1ee/ out in theater/, /o in thi/ /en/e, /uch a film 1ill /till be ea/il#

ientifiable a/ an exceeinl# popular film an can be controlle for a/ /uch5

(t i/ al/o important to account for /ea/onalit# 1ithin the calenar #ear5 Fiure $ illu/trate/ thi/ b# plottin, for

each #ear from $>>; to 200E, the fraction of the #ear3/ total revenue that 1a/ earne in each month 1here totalrevenue an the revenue in each month are the /um/ of earnin/ from the top $0 film/ from each 1eeenC5

There are noticeable /ea/onal tren/, 1ith the month of Aul# an the 8ovember throuh Aanuar# holia# /ea/on

con/i/tentl# arnerin lare portion/ of the #earl# revenue relative to other month/5

!"#$E 1: %onthly revenue &rom top &ilms as &ra'tions o& total yearly revenue

To capture thi/ /ea/onalit#, $2 binar# variable/ 1ere inclue in the rere//ion to enote the month in 1hich a

iven 1eeen fell5 For example, for a film from the box office top $0 from the 1eeen of Aanuar# 2, $>>;, the

Aanuar#G variable 1oul be /et to one an tho/e for each of the other month/ 1oul be /et to .ero5

(n aition to monthl# inicator/, a binar# variable 1a/ inclue to inicate 1hether a iven 1eeen coincie

Jan Feb Mar Apr May Jun Jul Aug Sep Oct N! "ec

0.04

0.05

0.06

0.07

0.08

0.09

0.10

0.11

0.12

0.13

0.14

2004

2005

2006



1ith a ma@or ban holia# in the !"5 Thi/ holia#G variable 1a/ /et e?ual to one if an# of the follo1in

holia#/ fell on the iven 1eeen plu/ or minu/ one a#C:

• 8e1 -ear3/ Da# Aanuar# $C

• +a# Da# fir/t +ona# in +a#C

• *prin Ban olia# la/t +ona# of +a#C

• *ummer Ban olia# la/t +ona# of uu/tC

• 'hri/tma/ Da# December 2C• Boxin Da# December 2EC

The 1eeen box office revenue fiure/ a/ reporte on the (nternet +ovie Databa/e 1eb/ite inclue onl# the

revenue earne bet1een Fria# an *una#, /o if a ban holia# fall/ on a +ona# the revenue on that a# 1ill

not be inclue in the 1eeen total5 Thi/ i/ /till con/iere a holia# 1eeenG for the purpo/e/ of thi/ /tu#5(f /uch a holia# fall/ on a +ona#, the loner 1eeen 1oul pre/umabl# influence the habit/ of movieoer/

urin the Fria# throuh *una# perio an it i/ important to control for thi/ effect5

B# rere//in a film3/ 1eeen box office revenue on proxie/ for the film3/ popularit#, variable/ to capture the

/ea/on/ an holia#/, an mea/urement/ of that 1eeen3/ 1eather, it i/ po//ible to i/olate the effect of 1eather

on a iven film3/ revenue 1hile e//entiall# holin other factor/ con/tant5

E



+%TODOOM-

The relevant 1eather variable/ 1ere taen to be temperature an precipitationKmore /pecificall#, 1armG

1eather an r#G 1eather a/ the/e event/ are relativel# rare in %nlan3/ maritime climate5

Weeen temperature 1a/ efine a/ the averae of the Fria#, *atura#, an *una# mean '%T value/ in

eree/ 'el/iu/ for a iven 1eeen, 1here the mean temperature for each a# 1a/ /impl# taen to be the

mipoint bet1een the maximum an minimum ob/erve temperature/ for that a#5 (n rere//ion/ that inclue box office information acro// all month/ of the #ear, a 1arm 1eeenG 1a/ efine to be an# 1eeen for1hich the averae 1eeen temperature 1a/ above $2N' <NFC, the temperature of a 1arm 1eeen in the

/prin5

Weeen precipitation 1a/ efine a/ the total rainfall for the 1eeen the /um of the Fria#, *atura#, an

*una# value/C a/ mea/ure in centimeter/ at onon eathro1 airport5 r# 1eeenG 1a/ then efine to be

an# 1eeen for 1hich there 1a/ no rain at all 0cmC bet1een Fria# an *una#5

To i/olate the effect of 1eather on the box office revenue for a iven film, all of the top $0 film/ from all of the

1eeen/ in our ata /et 1ere compile an the loarithm of each iniviual film3/ 1eeen box office revenue

1a/ rere//e on the follo1in explanator# variable/:

• the film3/ ran ba/e on revenueC 1ithin the $0 top4ro//in film/ of that 1eeen,

• the number of 1ee/ the film ha been out in movie theater/,

• the number of /creen/ on 1hich the film 1a/ pla#in that 1eeen,

• the loarithm of the film3/ cumulative revenue incluin that 1eeen,

• 1arm 1eeenG inicator variable,

• r# 1eeenG inicator variable,

• holia# 1eeenG inicator variable, an

• inicator variable/ to capture the month of the #ear in 1hich the 1eeen fell5

!/e the loarithm of each film3/ 1eeen revenue, rather than the oriinal amount recore in Loun/ *terlinC

allo1/ an interpretation of each rere//ion coefficient a/ the percentae chane in revenue a//ociate 1ith a one4

unit chane in the explanator# variable5 (n the ca/e of the binar# 1eather variable/, thi/ interpretation allo1/con/ieration of the ifference in expecte revenue for a 1arm 1eeen to one that 1a/ not 1arm, for exampleC

Thi/ tractable interpretation i/ al/o u/eful in allo1in for compari/on/ bet1een huel# popular movie/ an

moeratel# /ucce//ful film/ b# eliminatin the i//ue of eneratin fairG compari/on/ acro// revenue/ of /uch

ifferent manitue/5

7



8-*(* B- BO OFF('% R8"

The table belo1 ive/ an interpretation of the rere//ion coefficient/ for the effect of 1eather on top4ro//in

film/ at the box office, an loo/ /pecificall# at the effect of 1eather on the movie/ in each of the top $0 /pot/

for a iven 1eeen5 When the cumulative revenue of the $0 top4ro//in film/ are con/iere, the rere//ion

/ho1/ that the revenue for a iven film in the top $0 on a 1arm 1eeen 1ill be expecte to be more than $0

percent lo1er than 1hat a /imilar film 1oul have mae on a cooler 1eeen, all el/e e?ual5 iven film in the

top $0 1oul be expecte to earn nearl# > percent le// on a r# 1eeen than it 1oul be expecte to earn on a1eeen 1ith an# mea/urable rainfall, aain a//umin all el/e to be e?ual5

TABLE 3: E&&e't o& weather on revenue &rom top(grossing &ilms) *y *o+ o&&i'e ran,

hihlihte coefficient/ are /tati/ticall# ifferent from .ero at the $0P /inificance level

When /plit into /eparate rere//ion/ ba/e on ran 1ithin the top $0, the rere//ion/ of lo1er4rane film/ re/ult

in 1et 1eeenG coefficient/ that are much larer in manitue than tho/e for the top4ro//in film/5 While the

number one film for a iven 1eeen i/ /een to earn, all el/e e?ual, >5$ percent le// on a 1arm 1eeen than on

a cooler 1eeen, the film/ rane eihth throuh tenth at the box office are expecte to earn more than 90

percent le// than the# 1oul have been expecte to earn ha the 1eather not been /o 1arm5 The revenue from

lo1er4ro//in film/ in the top $0 i/ /een to be far more /en/itive to temperature than that of the hihe/t4

ro//in film/5

The r# 1eeenG coefficient/ tell a /lihtl# ifferent /tor#5 While all of the coefficient/ are neativeK

impl#in that revenue from each film in the top $0 1ill be lo1er over a r# 1eeen than over a rain# 1eeen,all el/e e?ualKthe coefficient for the top4rane film i/ not /tati/ticall# /inificant5 Thi/ ma# impl# that the

pre/ence or lac of rain on a iven 1eeen oe/ not have a /inificant effect on the revenue from the 1eeen3/number one film5 (t coul al/o be a re/ult of the relativel# hih /tanar error/ from /uch variable ata5

Relative to revenue from lo1er4rane film/, revenue from number one film/ /ee/ hue variation bet1eenaveraeG 1eeen/ an 1eeen/ urin 1hich a hihl# anticipate film lie arr# LotterG or Lirate/ of the

'aribbeanG i/ relea/e, an thi/ variation mae/ it harer to ientif# 1ith certaint# the effect of 1eather on

revenue5

Dr# 1eeen/ 1ere much rarer, compri/in onl# 77 of the 00 1eeen/ uner con/ieration5 / the/e

1eeen/ 1ere al/o more liel# to occur urin the rier /ummer month/ in 1hich the bie/t film/ are often

relea/e, it i/ liel# that the r# 1eeenG roup ene up 1ith a particularl# 1ie/prea i/tribution of

;

#ar$ #ee&en' 'ry #ee&en'

(10.3% (8.8%1 (9.1% (8.9%

2 (10.4% (14.7%

3 (14.9% (9.6%

4 (19.3% (11.6%

5 (21.6% (13.7%

6 (23.2% (15.4%

7 (27.9% (14.1%

8 (31.2% (9.1%

9 (32.6% (9.7%

10 (31.3% (9.8%

all 10 tp(gr))*ng +*l$)



revenue/5 Thi/ 1oul re/ult in a hih /tanar error for the r# 1eeenG coefficient in the rere//ion, an

coul mean that the effect appear/ a/ in/inificant 1hen in realit# the lac of rain reall# oe/ impact the revenue

of number one film/5

>



8-*(* B- +O8T

The follo1in table ive/ an interpretation of the rere//ion coefficient/ for the /ea/onal effect of 1eather on

top4ro//in film/ at the box office, an i/olate/ ho1 1arm 1eather an r# 1eather affect box office revenue

ifferentl# at ifferent time/ of the #ear5

When anal#.in the effect of 1eather urin each iniviual month, the temperature thre/hol for a 1arm

1eeenG ha to be a@u/te, a/ ifferent month/ have var#in averae temperature/5 *o, in /uch rere//ion/, a1arm 1eeenG 1a/ efine a/ one for 1hich the 1eeen temperature 1a/ above the averae mean '%T for

that monthKan averae of the ail# mean temperature value/ for that month over the la/t thirt# #ear/5 *imilarl#,

the efinition of r# 1eeenG ha to be chane /ince /ome month/ /a1 ver# fe1 completel# r# 1eeen/

bet1een $>>; an 20075 Thu/, a r# 1eeenG i/ taen here to mean that the total rainfall for the 1eeen 1a/

le// than three time/ the averae ail# rainfall for that month5 *ee Table $ for the/e monthl# averae/5C

TABLE -: E&&e't o& weather on revenue &rom top(grossing &ilms) *y month

hihlihte coefficient/ are /tati/ticall# ifferent from .ero at the $0P /inificance level

Warmer than u/ualG 1eeen 1eather ha/ the reate/t effect on the box office bet1een +a# an uu/t,

re/ultin in revenue/ that are /inificantl# lo1er than 1hat 1oul have been expecte ha the 1eather been

cooler5 Durin the/e 1armer month/, it i/ po//ible that particularl# 1arm 1eather over a certain 1eeen coul

in/tiate more outoor activitie/, 1herea/ 1arm 1eeen/G urin coler month/ miht /till be too col foroutoor activitie/5

pril, Aune, an Aul# ma# be /imilarl# affecte b# 1eeen/ that are le// rain# than u/ual5 Dr# 1eather in a

1armer month ma# be better outoor 1eather than a r# /pell urin a coler month5 Thu/, 1hen the rain ea/e/up in the /ummertime, people ma# be more liel# to reuce their time /pent inoor/5 uu/t, ho1ever, mar/ the

earlie/t a#/ of the rain# /ea/on, 1ith the number of 1et a#/ t#picall# /tartin to increa/e after a relativel# r#

/ummer5 Bein rier than u/ualG in uu/t i/ often /till 1et, /o movie theater attenance oe/ not rop over

/uch 1eeen/ a/ it oe/ earlier in the /ummer /ea/on5 (n October, the month 1ith the hihe/t averae ail#

rainfall, box office revenue fall/ on 1eeen/ that are rier than u/ual5 Dr# 1eeen/ in October ma# have

particularl# lare impact, becau/e the averae temperature rop/ precipitou/l# in 8ovember, main October the

la/t t#picall# outoor month before 1inter 1eather officiall# /et/ in5

Mraphicall#, the/e tren/ can be illu/trate b# plottin revenue aain/t the relevant 1eather variable/5 The

$0

#ar$ #ee&en' 'ry #ee&en'

Jan 9.8% 2.1%Feb (9.7% 0.2%

Mar (0.6% (3.1%

Apr (2.7% (8.6%

May (19.0% (1.2%

June (10.3% (12.3%

July (9.2% (11.4%

Aug (9.1% 1.2%

Sept (4.3% 1.0%

Oct (2.6% (5.7%

N! 3.2% (1.4%"ec (4.6% (7.3%



follo1in chart/ u/e the /um of revenue from the top $0 film/ at the box office a/ the 1eeen3/ actual

revenueG an tae the averae total revenue for each /eparate 1eeen an holia# 1eeen of the #ear to be the

expecte revenueG for that 1eeen or holia# 1eeen5 The 1eeen/ 1ere then ivie into roup/ ba/e on

rane/ of the 1eather variable/, an the averae of the actual to expecte revenueG ratio/ 1ithin each roup 1a/

plotte aain/t the rane of 1eather value/ 1ithin 1hich the/e 1eeen/ fell5

!"#$E 2: April Bo+ .&&i'e $evenue vs/ re'ipitation

pril=/ box office revenue /ho1/ i/tinct tren/ ba/e on 1eeen rainfall Fiure 2C5 The hiher the rainfall, the

hiher the ratio of actual to expecte revenue increa/e/5

!"#$E 3: uly Bo+ .&&i'e $evenue vs/ Temperature

Aul#=/ box office revenue reflect/ the impact of 1eeen temperature on the ratio of actual to expecte revenueFiure 9C5 Durin Aul#, a/ the averae temperature ecrea/e/, /o oe/ box office revenue5 Thi/ ma# inicate that

filmoer/ are motivate to /ee inoor entertainment 1hen lo1er temperature/ occur urin month/ 1hen

hiher temperature/ are expecte5

$$

0.7

0.73

0.75

0.78

0.8

0.83

0.85

0.88

0.9

0.93

0.95

0.98

1

1.03

1.05

1.08

1.1

1.13

0 c$ ,0 *n-

0(0.1 c$ ,0(0.04 *n-

0.1(0.5 c$ ,0.04(0.2 *n-

0.5(1.0 c$ ,0.2(0.39 *n-

1.0(2.0c$ ,0.39(0.78 *n-

ee&en' /a*n+all

/ a t * + A c

t u a l t 0 1 p e c t e ' / e ! e n u e

0.8

0.83

0.85

0.88

0.9

0.93

0.95

0.98

1

1.03

1.05

1.08

1.1

un'er 15 ,59F-

15(16.5 ,59(62F-

16.5(18 ,62(64F-

18(19.5 ,64(67F-

19.5(21 ,67(70F-

A!erage ee&en' e$perature

/ a t * +

A c t u a l t 0 1 p e c t e ' / e ! e n u e

Box Office Profit Projection

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