Method for The Genre Factor (Finding Out Which Genres Have Best Return on Investment)

Genres with a high potential return on investment are appealing to investors and therefore important to identify as a producer.

Aside from genre, this study also identified two other key factors in potentially high ROI. They weren't that surprising, but they're important to stress. These two factors are Source Material and Name Talent Attached.

As mentioned in the main article on The Genre Factor, the four genres that do best without name talent or well-known source material are: Horror, Comedy, Thriller, and Faith-Based.

All of these are still dependent on execution, but less likely to fail compared to genres like romance, science fiction, action, and drama. 
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The Hypothesis

Established audiences exist for name talent (stars), well-known source material, and some genres. Certain genres will stand out if we take the "starpower" element out of the equation.
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Data Collection

The data used was from the-numbers.com and IMDBPro. Most of these numbers are rough and sometimes estimates, but it will work for the relative nature of this test. 

Each theatrical film from 2016 was added to a spreadsheet and a few types of films were removed. Animated films, those produced solely for foreign audiences, films without available budgets online, sequels, and mass-culture spinoffs were all cut from the list. These films weren't useful for testing the type of information needed.

Information for each film included Studio, Director (with IMDBPro Starmeter ranking), Two Highest Ranked Actors (on IMDBPro's Starmeter), Genre, Budget, Box Office Earnings, Largest Theater Weekend, and Home Video Earnings.

View and Sort Data For Yourself

​Calculated Information

​RETURN ON INVESTMENT (BOX OFFICE)

With the information from IMDBPro and the-numbers.com, the ROI was determined as Box Office Earnings less Budget divided by Budget. This returns a percentage representative of return on investment.

It's worth mentioning that this percentage doesn't take into account where the earnings are going (as most ROI projections do not). An investor would actually only be returned a portion of that percentage; however, in terms of testing the hypothesis, this ROI calculation will work to determine relative returns.

EARNINGS PER THEATER

The earnings per theater were also calculated and not used later. It wasn't clear if that information would be useful... it's not. ​

RETURN ON INVESTMENT (AFTER HOME VIDEO)

The Home Video (BluRay and DVD) earnings were added to the Box Office earnings and run through the same formula. Home Video plus Box Office less Budget divided by Budget. This returns another flawed representation of ROI, but satisfactory in relative terms.

ATTACHED TALENT "STARPOWER"

The Starmeter Ranking numbers for the Director and two highest ranked actors for each film were added together to come up with a "starpower" for each film.

This number is a bit misleading, because the smaller numbers actually mean more starpower. Think of it like golf.

ACTING STARPOWER

The starpower was also calculated using only the two highest ranking actors; however, this number wasn't used later.​

It proved to be too important to consider the director with names like Steven Spielberg and Woody Allen on the list.

REFERENCE RANKS

The data was sorted and given numbered ranks by categories Attached Starpower, Actor Starpower, ROI, and ROI after Home Video. These are just an easier way to see how films stack up against each other with varying factors and compare across factors.

ROI RELATIVE TO STARPOWER

This was the most important data piece to figure out. The number needed to represent the films relative to one another based on how high their ROI was if Starpower was negated.
The formula was ((ROI after Home Video x 100 + 100) / starpower) / 1000.​

Basically the ROI after Home Video needed converted from a percentage back to an usable positive number. Then it was dived by starpower to negate starpower from the earnings. It was then divided again by 1000 just to make the numbers easier to handle.
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Results

With films sorted by the ROI Relative to Starpower, it is clear which genres are least effected by name talent attached. Although that factor still weighs heavily on some of the top films, there are a few with very low Starpower that made significant returns at the box office.

The clear outliers here are Horror, Thriller, Comedy, and Faith-Based genres. 

These results show that Starpower and Source Material are still influential factors in drawing audiences to the theater.

​The conclusion from these results also show that Horror, Thriller, Comedy, and Faith-Based movies have the potential to draw audiences as well without the prior two factors necessarily. 

If you would like to see or use this data for yourself, I have made the spreadsheet public through google sheets.

Notice any glaring errors or have different interpretations of the data? Let me know in the comments.

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Technical Errors

The ROI percentages leave out a variety of factors such as theatrical split, distribution costs, and marketing costs (if not included in budget). These would be impossible to test in the circumstances.

The ROI Relative to Starpower formula may favor films with lower starpower disproportionally. This was intended but has a very significant effect when further out from the center of the scale. An example is how highly Blood on the Leaves ranked far above any other films if the exact IMDBPro numbers are used ranking Vincent nearly 18,000,000 behind any other director on the list. Another example is how low Cafe Society's starpower number is and it ends up far on the bottom of the list.

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