Every studio head and film marketer wishes they had a crystal ball. Without one, who can predict why a low-budget action-adventure with a little-known cast performs like a blockbuster on VOD or how a star-studded rom-com that blew away the box-office competition on its opening weekend disappears with as little trace as a small bag of concession-stand popcorn.
While no one can rely on crystal balls (except maybe in the movies), there is a data-driven way to make informed decisions about an on-demand campaign: box office delta.
Simply put, box office delta is the difference, expressed as a percentage, between a film’s opening box office take versus its total box office. And no matter what the genre—costume drama, comedy, horror, or science fiction—having that figure can be revelatory. Films with higher box office deltas tend to exceed their video on demand (VOD) rental revenue goals, and the reverse is true as well: a lower box office delta often means a missed video on demand rental revenue goal that will need to be adjusted.
We analyzed more than 50 VOD rental campaigns from 2018 and found that the average box office delta was 363% (the result of an average domestic opening weekend being slightly over $19 million, while average domestic total box office worked out to slightly under $70 million).
There are, of course, outliers, and those prove especially instructive for Cadent’s purposes. For example, a dark superhero flick pulls in more than $80 million in its opening weekend and more than $200 million in its box office total, by no means a failure for a theatrical performance, but there’s a compelling story there for its VOD performance. The delta for this particular film was less than half the average, telling us that it might be lacking momentum entering the VOD landscape. Whereas an action-adventure remake with an opening weekend gross of a respectable $36.2 million racked up a jaw-dropping total box office of $404.5 million, meaning its box office delta was more than three times the average. It’s reasonable to conclude that there’s significant organic interest in the film as it leaves its theatrical run and enters into the VOD landscape.
Box office hits or failures don’t necessarily make hits or failures in the VOD space; what’s important is whether the title has audience interest and whether that interest is building as the film enters the VOD rental window.
Campaigns with high box office deltas exceeded their revenue goal by an average of 18%, while those with lower deltas missed their goals by an average of 11%. Of the 43 campaigns with under-average delta, almost half missed their revenue goal, while of the nine with over-average delta just a single film missed its goal. With box office delta as a planning variable, this could be anticipated and planned for.
Box office delta can be an enormous help in setting realistic VOD revenue goals during the planning stages by serving as a benchmark. In other words, by adjusting opening box office numbers based on box office delta early on, we can much more accurately foresee VOD revenue.
Let’s take the example “Shape of Water.” It opened up with $3 million (and the chosen comparisons average just slightly over that). Later, however, thanks in large part to positive press and a good showing during awards season, the movie caught some buzz, and its box office delta ended up at 2028%. The takeaway is that the movie still had an active audience despite it no longer being in theaters, Potentially, it could punch above its weight because of overwhelming interest it had coming into the rental window.
Basing a campaign on that modest opening weekend would represent a missed opportunity. Mathematically, the huge box office delta suggests that the film has performed more like one with a $13 million opening (versus the $3 million it had), and that’s the figure that should be considered when setting VOD goals.
In an opposite scenario, a movie with a lot of advance buzz might have an epic opening weekend as fans flock to be in the vanguard; box office delta could then end up being low, because everyone who wanted to see it did so right at the start and the film didn’t build lifetime momentum. Thus, a low box office delta. That state of affairs will naturally affect the VOD outcome, and a marketer who has taken box office delta into consideration might just have averted an expensive debacle.
No two movies are exactly alike, and, admittedly, no one campaign strategy is going to fit every film, but box office delta provides a powerful tool that allows marketers to consider both short-term performance and the long tail while planning for on-demand. When combined with 20+ other variables, we have a pretty solid expectation for how a film will perform in the VOD rental window. It’s not quite a crystal ball, but almost.