Revealed: How to make your movie a box office smash

I t's the time of year when big-budget films are released in the hope that they become box-office summer blockbusters, so in recent weeks we have witnessed the release of films such as Iron Man and Speed Racer, quickly followed by the long awaited next instalment of the Indiana Jones franchise, and Sex and the City.

But which will be hits and which will be turkeys? And what role does the media play in determining a movie's success? Over many months, I and my colleague Rob Simmons have conducted research using data from 527 films to try to pinpoint the factors determining box-office results. We looked at hits, such as Notting Hill and The Sixth Sense, but also at flops such as Glitter.

Not surprisingly, nominations for the highest-profile Oscars and Baftas help films, and so we find that films such as Brokeback Mountain, American Beauty and A Beautiful Mind are box-office hits. These award nominations increase advertising budgets by 56.6 per cent. Favourable newspaper critics' reviews – an early indication of film quality when it is first released – are found to increase box-office revenues directly by 14.5 per cent. Bad reviews can also ensure films do badly at the box office despite large investments and well-known actors. Consider, for example, the recent relatively weak opening figures for Speed Racer compared to Iron Man, and previously such films as Glitter in the US and Eyes Wide Shut.

Yet the media are not as influential in the success or otherwise of a movie as they might like to think. Word-of-mouth recommendations are highly influential and some films – such as My Big Fat Greek Wedding and Billy Elliot – are eventually very successful even after being made with relatively low production and advertising budgets and with limited launches, in the US at least. My Big Fat Greek Wedding and Billy Elliot both had production budgets of £5m compared to an average budget of £114m for the films in our study. Each film opened on a very low number of US screens – 108 and 10 respectively – when often films are initially shown on between 2,000-3,000 US screens in their opening week. Despite the media attention currently focused on Indiana Jones and Sex and the City, our results indicate that Kung Fu Panda may ultimately be one of the most successful films in the UK in the summer of 2008. A children's film, with A-list celebrities such as Jack Black, Jackie Chan and Dustin Hoffman providing the voice-overs, this caused a stir at the Cannes film festival when promoted by people dressed in giant panda costumes pretending to be fighting.

Our study indicated that children's films tend to do better at the box office whether or not they receive strong media backing. Not only is a trip to the cinema a good way to entertain children when the weather is bad, but each trip typically involves multiple tickets to a film being sold. The children themselves may have been influenced by seeing advertisements on buses, billboards and television, but they also may have heard about them in the playground. The key factor is the 'U' certificate, and the magnitude of this document's contribution to the success of a film at the box office may come as a shock. Controlling for other factors, 'U'-certificate films enjoy more than 68 per cent higher revenues than films with other certificates.

The timing of the release of a film is important. We find that distribution companies are right to look carefully at the release dates of slates of films, as movies do better when released in weeks when there are a smaller number of rivals. Releasing films in the same week as a large number of other releases can reduce box office revenues by 13.5 per cent. Films expected to do well may be launched in the UK and the US on very similar dates, possibly in an attempt to persuade the public of a film's quality, as well as a method of reducing the risk of film piracy. But movies released in the same week on both sides of the Atlantic suffer from 35 per cent lower revenues, despite being associated with almost 40 per cent greater advertising budgets than other films.

For UK film-makers a word of caution: the distribution of a film by one of the big US studios rather than an independent distributor not only ensures a 20 per cent greater initial allocation of screens when a film is first released, but this translates into almost 5 per cent greater total box-office revenues.

Surprisingly, the appointment of a big-name director, the decision to release a film in time for the summer or Christmas peak cinema attendance periods or the making of a film based on a TV show do not affect the likelihood of box-office success.

This is interesting given the current hype surrounding Sex and the City, and despite being a sequel, the success of the newly released Indiana Jones film remains to be seen.

Caroline Elliott is director of the Masters' programmes in management and a lecturer in economics at Lancaster University