ROI in the Film Industry

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

Inherent Marketability

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

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

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

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

Moviegoers’ input on production spending leads to a better return on the investment Note: Example Only Helps you understand how much each element matters… In this example, Romantic interest had the greatest impact on consumer choice 1 7 1Director 2Lead detective 3Romantic interest 4Serial killer 5Mood 6Action/Effects 7Side plots 234 5/6

Strong performance at screenings is predictive of stronger box office Note: From historical dataset of ~700 titles from past five years.

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

Likewise, movies that have higher public user ratings also have stronger box office returns and a stronger multiplier Note: From NRG historical dataset of ~500 titles from past five years. X 2.4 X 2.8 X 2.9 X 4.0 User Rating vs. Box Office

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

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

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