Dynamic Demand in the Movie Industry:

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Dynamic Demand in the Movie Industry:

Criteria in selecting Mainstream and Independent Movies

MASTER THESIS

Vanny Pattinama 1504991 Supervisor : dr. Gerda Gemser Co-assessor: dr. Clemens Lutz

Master of Science in Business Administration Strategy and Innovation Rijksuniversiteit Groningen

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Dynamic Demand in the Movie Industry: Criteria in selecting Mainstream and Independent Movies

Abstract

The movie industry is segmented into two major segments, the mainstream and the independent movies. Both segments have its own characteristics which influence the decision of the moviegoers in watching either the mainstream movies or the independent movies. In this study, I argue that there are differences between the criteria that the moviegoers use when selecting movies from both segments.

Moreover, that criteria would change over time. The study then indicates that there are some significant differences in terms of the demography of the moviegoers as well as their decision influencers. These influencers tend to be in the same level, for both mainstream and independent movies, but different in how they develop over time.

Key words: Mainstream Movies, Independent Movies, Reviews, WOM, time aspect

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ACKNOWLEDGEMENTS

I would like to thank God, the Almighty Lord above, for giving me all of His blessings, enabling me to finish my study as well as my thesis, and also to do other great things. Thank you God. m(_ _)m

I would also like to thank my family, for providing me the chance to study here in Groningen.

Thank you all for your support to me, keeping me in touch with Indonesia, neighborhood’s gossips, mental supports, and other indescribable supports. Thank you Papa, Mama, my sister Eka, Tante Goos (providing me with Indonesian recipes), Mbak Par. Not to mention the Fujiokas, thank you Papa John, Mama Mieko, orenoAi, and Yokkun, for supporting me with e-mails as well as postcards, saying GAMBATTENE….!!! Oups, almost forgot, my Basalt #56 Family, Jessica and Giuseppe, for comforting me during my stressful days!!! MONSTER is the best, rite?? v(*o^)

Thank you Mrs. Gerda Gemser, for being my supervisor, helping me (a lot #(^-^)#) during my whole study in RuG, not to mention the support on my thesis project, feedback, inputs, ideas, things that enables me to finish my thesis smoothly. q(^-^)p

To Mr. Clemens Lutz, thank you very much for your time to give comments, feedback, and also for being the co-assessor in such a short notice. Thank you sir, I really appreciate your help.

And for my friends, especially the PPI kids (Indonesian Student Association in Groningen). I could never have finish my survey without your help!! Hahaha, thanx a zillion guys…. And girls! All those time we spent in Images as well as in Pathé….. It is an unforgettable memories. Pandu, Mahesa, Bima, Mbak Mutie, Julius, Lingkan, Bang Deny, and others, you rock my survey!!! Especially to Mbak Wina, thank you for your advice regarding my statistical calculations, feedback on my research method, and for staying online YM anytime to answer my questions.

There are also other individuals that I have not mentioned above, helping me with their own ways, that I could never thank enough.. Thank you very much for all of your supports in my Groningen life! #(^o^)# tot ziens

Groningen, August 2005 Grand regards, Vanny Pattinama

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CONTENTS

Abstract ……… 2

Acknowledgements ……….. 3

Contents ……… 4

List of Tables ……… 5

Chapter I Introduction ……….. 6

Research Question ……….. 8

Thesis Outline ………. ……….. 8

Chapter II Theoretical Background ………. 9

Movies as Innovation ……….. 9

Mainstream Vs. Independent Movies ……… 10

Influencers Vs. Predictors ………. 12

End Consumers ………... 14

CHAPTER III Methodology ……….. 16

Research Design ……….. 16

Method of data Collection ………. 17

Sampling ………... 17

Variables ………... 19

The result ………... 20

Data Analysis ………... 23

CHAPTER IV Analysis ……….. 24

CHAPTER V Conclusions ……….. 37

References ……… 40

APPENDIX ……… 43

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LIST OF TABLES

Table 3.1 The number of Respondents ……….………. 21

Table 3.2 Attribute Variables ………..………. 22

Table 4.1 Descriptive Statistics and ANOVA result (overall Mainstream Vs. Independent) … 24

Table 4.2 Descriptive Statistics and ANOVA result (Mainstream 1^st & 2^nd Week) ………. 26

Table 4.3 Descriptive Statistics and ANOVA result (Independent 1^st Vs 2^nd Week) ….... 27

Table 4.4 Descriptive Statistics and ANOVA result 1^st Week (Mainstream Vs. Independent)... 29

Table 4.5 Descriptive Statistics and ANOVA result 2^nd Week (Mainstream Vs. Independent) Compared to ANOVA result 1^st week ……….……… 31

Table 4.6 Correlation Matrix (Mainstream) ………. 33

Table 4.7 Correlation Matrix (Independent) ……... ………. 35

APPENDIX (correlation table) ………... 43

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CHAPTER I Introduction

Movie-going is one of the activities that people do in order to entertain themselves. However, among the wide variety of movies to watch, people can only watch one movie at a certain time. In his article, De Silva (1998) stated, “…consumers are well aware of the choices and use them in a selective fashion…” The decision regarding what movie to watch, when to watch it, and how to watch a certain movie, could influence the satisfaction level of a consumer.

The movie industry itself is divided roughly into two strategic groups, namely the mainstream group and the independent group. The mainstream group, which is the dominant group in the movie industry, usually refers to movies produced by Hollywood major studios, namely the Warner-Bros.

Pictures, Disney, Sony, Fox, etc. The second strategic group, known as the independent or art group, serves the niche market.

The mainstream group is usually using big production and marketing budgets, superstars, and a large number of opening theater screens. This strategy is known as the blockbuster strategy (De Vany and Walls, 2002).The aim of this strategy is to capture a high movie demand and high revenues.

On the other hand, the independent group relies heavily on the art-side of a movie (Hirschman and Pieros, 1985), with less budgets then mainstream ones. As a result, movies coming from the independent group are less “popular” or less known to the moviegoers.

Prior studies suggested that mainstream movies, using the blockbuster strategy, give signals that can reduce uncertainty about their qualities (Lampel and Shamsie, 2000). On the other hand, independent movies have a relatively low signal regarding their qualities (Lampel and Shamsie, 2000), and therefore, the moviegoers tend to have a limited knowledge about the quality of independent movies. Regardless of this condition, there is a growing popularity of independent movies among moviegoers, as well as among major movie distributors (Austin, 1984 p.74). The Singapore Film Commission also reported that art movies are gaining more and more audiences (SFC e-bulletin, July 2002).

Some questions can be derived from these facts, for example: What are the factors that stimulate the growth of interest for independent movies? With limited signals of quality, what

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motivates the moviegoers to see independent movies? Are the triggers that motivate the moviegoers to see mainstream movies different than those that motivate to see independent movies?

These questions motivate me to conduct a deeper investigation regarding these two movie segments. Previous studies have come up with several clues regarding the factors that affect movie- going preferences (Austin, 1984; Gemser et al, 2005; Eliashberg and Shugan, 1997; Litman, 1983; De Vany and Walls, 2002, De Silva, 1998), namely the studios’ marketing efforts, budgets, stars, awards, directors, numbers of screens, ratings, word-of-mouth, sequels, critics and reviews, and not to mention the factors that come from the moviegoers themselves, such as age, educational background, marital status, sex, and income.

Another interesting fact to point out is that there are only few, or even no studies which directly compare the preferences in choosing a movie to watch, between the mainstream and independent movie group. Most of the studies deal with either mainstream movies only, or independent movies only. This fact encourages me to do a research that compares these two strategic groups.

As mentioned before, mainstream movies give strong signals of qualities by using the blockbuster strategy (Lampel and Shamsie, 2000). The mainstream studios believe that the strong signals of quality would influence many “early” moviegoers to watch the mainstream movies, which then will influence more “late” moviegoers to also watch the mainstream movies (De Vany and Walls, 2002). The aim of this strategy is to generate a good opening week, which can leverage the following weeks, making the movie a success. In short, the studios producing and marketing mainstream movies believe that the opening week would be the key to success.

In contrast to the strong signaling properties of the mainstream movies, independent movies have low signaling properties (Lampel and Shamsie, 2000). And in the case of independent movies, positive reviews have an essential role in generating the consumers’ interest (Lampel and Shamsie, 2000), as well as the number of reviews (Gemser et al, 2005). Moreover, the result of a study conducted by De Vany and Walls (2002) indicates that information among moviegoers, or the word- of-mouth (WOM), would also determine the success of movies. Low signaling properties, reviews, and the spreading of information among moviegoers indicated that it takes time for the independent movies to develop their “success”.

The influence of time, as described in the above passages, over the development of the success of movies also encourage me to put the aspect of time in this research. Therefore, assuming that the impact of reviews as well as WOM on moviegoers’ preferences in watching a movie(s) would change over time, I would also conduct my research on the mainstream and independent movies on the basis of two time frames, the first week and the following week of the release of the movies.

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These two time frames can provide some insights regarding the changes in factors that influences the moviegoers’ preferences in selecting a movie(s) to watch in the cinema over time.

The aim of this research is to provide empirical evidence of the movie selection process of the end consumers, or the moviegoers. In other words, this research will be approached from the demand side. In a more broad and general term, this research is trying to describe what factors influence moviegoers in choosing a certain kind of movie to see. The result of this research will be heavily influenced by quantitative information. On the other hand, this quantitative information will also be supported with qualitative information for more explanation.

Research Question

The main research question is:

“Over time, do the criteria end consumers use when selecting movies to watch differ between the mainstream movies and independent movies ?”

Thesis Outline

My thesis will be divided into five chapter, namely the introduction chapter; theoretical issues;

methodology; the findings and calculations; and finally conclusions.

The first chapter deals with the introduction and main research question, as well as hypotheses regarding the movie industry. The following part will describe previous findings from that are connected with my research. The third part is about my research methodology, how I obtained the primary as well as the secondary data. After the methodology section, I will describe the findings of my research. The final part deals with conclusions based on the findings in the previous chapter.

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CHAPTER II Theoretical Background

Movies as Innovation

Wijnberg (2004) describes innovation as something new which is presented in such a way that the value will be determined by the selectors. Innovation itself should be something that never existed before, or it is made, introduced, discovered for the first time. Something new can also means that the item is an upgraded version from the previously introduced item. Furthermore, Lipczynski and Wilson (2001)¹ reveal that the innovation itself should be introduced in a market, so that its’ value can be established (Wijnberg, 2004). The selectors themselves serve as a particular party who determine the value of the innovation.

Following this theory of innovation (Wijnberg, 2004), there are at least two conditions that movies must fulfill in order to be labeled as innovation, namely something new and the presence of selectors that determine the value of the movies.

Caves (2000) considered a movie to be a complex creative product, which has more than one creative input, such as actors, directors, screenwriters, costume designers, etc. Each input contributes different aspects for the enrichment of a single movie. “Movie are essentially projects… possesses some unique, important characteristics… each project is unique” (Ravid, 1999). Since it is a creative product, and consists of more than one creative input, a movie is always unique, there is always something that a movie has but other movies do not have. Each movie has its own theme, and because of that, every movie that is ready to be launched to the market can be labeled as new. A new movie will always be different than the existing movies.

There are three selection systems that determines the value of “something” new, namely market selection, peer selection, and the expert selection (Wijnberg, 2004). In one of his speech, president of the Motion Picture Association of America, Jack Valenti, proclaimed, “…no one, absolutely no one can tell you what a movie is going to do in the marketplace… Not until the film

1 Quoted by Nachoem M. Wijnberg in his article “Innovation and Organization: Value and Competition in Selection Systems” (2004)

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opens… and the audiences can you say this film is right…” The value of a movie will be determined when it is being released to the audiences, and by the audiences themselves. This proves that the classic selection, market selection, exist in determining the value of a new movie.

Return to the Wijnberg’s idea on innovation, it can be concluded that the products of the movie industry are innovations. The movies are new, and selectors (i.e. end consumers) determine their value.

Mainstream Vs. Independent Movies

As mentioned before in the previous chapter, the movie industry is roughly divided into two strategic group, the mainstream group, which produces mainstream movies, and the independent group, which produces independent movies.

Before going deep into the definition of these two strategic groups, I would like to describe first the areas in which these two strategic groups can be distinguished. These two strategic groups can be distinguished, based on the degree of artistic qualities; the available production or marketing budget; the presence of movie stars or special effects; the number of screens; the content; style; genre;

‘market identity’ or the ‘market role’; or narrative structure of the movies (Gemser et al., 2005). For this research, I intend to use the approach of the market role. The market role refers to the organizations that occupy themselves with the movies, such as the producer, the distributors, or the theaters(Zuckerman and Kim, 2003). To be more specific, I will distinguish the mainstream and the independent movies based on the character of the theaters in which the movies are released. Similar approaches have been adopted by Zuckerman and Kim (2003), and also by Gemser et al (2005).

Mainstream movies, as argued by Gemser et al. (2005), are the dominant species in the film industry aimed at the mass market, while independent movies are in general aimed at the art-house niche. In other words, mainstream movies are made to capture a bigger market share in the movie industry, while the “leftovers” share of the market goes to the independent movies.

Barnett and Allen (2000) argued that there is a different level of cultural capital possessed by the moviegoers of mainstream and/ or independent movies. They further argued that there is less cultural capital needed to “comprehend” mainstream movies than to comprehend independent movies.

In other words, independent movies are more sophisticated, in term of art, than mainstream movies.

Independent movies are not “light” movies like mainstream movies, moviegoers should be able to understand independent movies in order to appreciate them.

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Twomey (1956)², define art movies as “films from other countries, reissues of old-time Hollywood classics, documentaries, and independently made films on offbeat themes”. The Singapore Film Commission (2002) define art films as films which usually are being produced independently and shown exclusively in art theaters. From these quotes, I would like to conclude that mainstream movies can be considered as Hollywood movies, movies that are being produced by Hollywood major studios, such as Warner Bros., Disney, Fox, and others. While, on the other hand, independent movies, which are also considered as art movies, are created outside the boundaries of Hollywood major studios with non-conventional ideas, usually coming from outside the US (Austin, 1984 p. 76), and also shown exclusively in special theaters for art.

Other factors that distinguished mainstream and independent movies is the presence of superstars and/ or special effects, number of screens, and the availability of marketing effort. Most studios that produce movies, or to be more precise, the mainstream movies, relied heavily on the strategy of using superstars, or stars who have “opening power”, heavy advertising, and a large number of screens (De Vany and Walls, 2002). This strategy is known as the blockbuster strategy.

The basic argument of this strategy is that the opening week of a movie will determine the destiny of that movie.

The theory behind this blockbuster strategy is that the moviegoers choose movies according to how heavily they are advertised, what stars are in them, and their revenues at the box office tournament (De Vany and Walls, 2002). De Vany and Walls (2002) describe another interesting fact behind this strategy, that the studios believe that late moviegoers will be most influenced by the early moviegoers, or the leaders, simply because they engage in “follow the leader” behavior. The late moviegoers believe that the leaders are more informed and they should follow what the leaders are executing. Following this strategy, the studios hope that a better opening week would create a better leverage to the following weeks, and thus making the movie a success.

Concluding from this strategy, I could say that mainstream movies are packed with high production and marketing budgets, and the mainstream studios usually concentrate their marketing effort on the first opening week of their movies. The high production budgets are used mainly for the super stars, directors, and special effects (Ravid, 1999). The blockbuster strategy can also be used as a signaling method, which can reduce the uncertainty of the consumers, regarding the quality of the mainstream movies (Lample and Shamsie, 2000).

Opposing to the strong signaling properties that the mainstream studios have, the independent studios generally have weaker signaling properties (Lample and Shamsie, 2000). As a result, independent studios cannot ‘sell’ their products as heavy as mainstream studios do. Moreover, as

2 Quoted by Bruce A. Austin in his article “Portrait of an Art Film Audience” (1984)

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independent movies serve the niche market (Gemser et al, 2005), the information about the movies themselves is more inadequate, in terms of quantity. Smythe et al. (1953)³ discovered that the recommendations by friends was one of the most common influence in choosing an art movie to see.

These findings suggest that for independent movies, where information is relatively scarce, WOM strongly influences the decision to watch independent movies.

The blockbuster strategy relies much on the effect of “follow the leader”, and neglects the fact that information, as well as WOM, would also effect the performance of the movies in a longer time span. “Moviegoers share their experiences with others and in this way reveal more than just their attendance” (De Vany and Walls, 2002). In their research, De Vany and Walls (2002) discovered that the moviegoers of mainstream movies cannot be manipulated by the studios’ strategy. Furthermore, they also found out that positive WOM can influence the success of a mainstream movie.

From the above sections, I can conclude that Mainstream movies are packed with the believe that the blockbuster strategy is effective in creating good quality signals to the leaders, the early moviegoers. But, this strategy neglects the fact that WOM plays an important rule in influencing movie attendance behavior in the following weeks. On the other hand, Independent movies generally produce weak quality signals to the moviegoers, and therefore WOM would strongly influences the movie attendance behavior. This also means that as more people watch a movie, more people will have information to distribute to more people. This conclusion leads to my first hypothesis:

H1 : Over time, WOM is important for both Mainstream and Independent Movies

Influencers Vs Predictors

Some prior studies (Litman, 1983; Eliashberg and Shugan, 1997; De Silva, 1998; Gemser et at., 2005) were done to test the relevance of reviews and critics on the moviegoers’ behavior in selecting and watching the movies.

The result of the research conducted by De Silva (1998), indicated that reviews for the mainstream movies are significantly related with the moviegoers’ attendance to a theater, along with other factors such as director, advertising, age, and marital status. However, among these factors, advertising and promotional factors are largely influencing the attendance decisions.

Supporting the above findings, Eliashberg and Shugan (1997) find that critics tend to be related with late and cumulative box office receipts of the mainstream movies. In other words, this

3 Quoted by Bruce A. Austin in his article “Portrait of an Art Film Audience” (1984)

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finding suggested that critics serve more as predictors, than as influencers, of the performance of a movie. Both studies (De Silva, 1998; Eliashberg and Shugan, 1997) were using the mainstream movies as their subjects.

Gemser et al. (2005) made a research regarding the impact of reviews on the performance of Mainstream and Independent Movies. They argued that reviewers possess much more cultural capital, and therefore can influence the preferences of moviegoers in selecting art movies, as these moviegoers are interested to find out the ’correct taste’ (Shrum, 1991). On the other hand, the moviegoers of the mainstream movies are looking for entertainment, and are less interested with the art side of movies (Bourdieu, 1984; De Silva, 1998).

The result of the research by Gemser et al. (2005) imply that, in the case of art house movies, number of reviews could influence and predict movie-going behavior, whereas the content of the reviews themselves only serve as predictors. In the case of mainstream movies, Gemser et al. (2005) suggested that the number of reviews has no influence nor prediction effect over the demand of movies. The content of the reviews serves only as predictors. These findings support the previous studies by Eliashberg and Shugan (1997) and De Silva (1998).

Base on the findings by Gemser et al. (2005), I would like to use the number of reviews as one of my research variable, instead of the content of the reviews themselves.

Thus, it can be concluded that critics and their reviews can predict the performance of a mainstream movie. Moreover, as critics possess much more cultural capital, which is less needed in appreciating mainstream movies, they can be used, or most likely be used, by the moviegoers in order to select which independent movies to see. The critics, or the reviews, are acting as tools to support independent movies’ quality signaling.

In other words, in the case of Mainstream movies, reviews do not influence demand in the opening week nor in the following weeks. On the other hand, in the case of independent movies, reviews would act as influencers in the opening and in the following weeks.

H2a : In the case of Mainstream Movies, the number of reviews will have no significant effect on the movie attendance in any time period

H2b : In the case of Independent Movies, the number of reviews will have significant effect on the movie attendance in any time period

H2 : The effect of the number of reviews on movie performance differ per type of movie and per time period

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End Consumers

Brown (1978) discovered that reviewers have different standards in evaluating movies. They would use less strict criteria for mainstream movies, compared to independent movies. In other words, the reviewers have different criteria in movie evaluation, depending on the type of the movie. Hirschman and Pieros (1985) provided a suggestion that the audience of independent movies possess similar evaluative criteria with those of professional critics.

On the other hand, the evaluation criteria of mainstream movies’ audience are different than or even conflicting with the reviewers (Hirschman and Pieros, 1985). De Silva (1998) also supported this findings, by suggesting that the majority of moviegoers attending the mainstream movies, which are the younger group, are quite indifferent to the quality of the movie itself. The majority of the moviegoers for the mainstream movies are making their decisions based on advertising and promotional factors (De Silva, 1998). While on the other hand, the older audiences are more influenced by the quality factors such as story type, critical reviews, and ratings.

Given the fact that reviewers have a similar judgments with the moviegoers of the independent movies (Hirschman and Pieros, 1985), and different or even conflicting judgments with the moviegoers of the mainstream movies (Hirschman and Pieros, 1985; De Silva, 1998), I could conclude that, both consumers of mainstream and independent movies possess different criteria in selecting which movie to see.

H3 : there is a difference in the criteria end consumers use when selecting the mainstream movies or independent movies

To test these hypotheses, I use variables included in the previous studies, namely the demographic variables such as age, marital status, and educational background (Austin, 1984; De Silva, 1998); directors, stars, promotion to test the effect of blockbuster strategy (Austin, 1984; De Silva, 1998; De Vany and Walls, 2002); reviews (Eliashberg and Shugan 1997; De Silva, 1998, Gemser et al., 2005); WOM (Austin 1984; De Silva, 1998; De Vany and Walls, 2002; Gemser et al.

2005) ; story type (De Silva, 1998; Austin, 1984) and the availability of the movie in the theater (De Vany and Walls, 2002).

The variables above will be used in my research base on the fact that previous similar studies on the mainstream or the independent movies suggested that these variables are significantly related with the movie attendance. For examples, De Silva (1998) concludes that the variables, namely

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director, advertising, reviews, age, and marital status are always significantly related to the mainstream movie attendance. Similar conclusion on the variables of age, marital status, and educational background, were also made by Austin (1984) regarding the art film audience. Moreover, previous studies by Eliashberg and Shugan (1997), De Silva (1998), and Gemser et al. (2005) also point out the relevance of reviews, both by the content as well as the quantity of reviews, to the decision of the mainstream or the independent moviegoers. De Vany and Walls (2002) also made an interesting study regarding the influence of information, WOM, on the behavior of the mainstream moviegoers, and discovered that positive information would influence the decision of the mainstream moviegoers. This conclusion is also supported by De Silva (1998) and Austin (1984).

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CHAPTER III Methodology

Research Design

“The design module describes what you are going to do in technical terms. This section should include as many subsections as needed to show the phases of the project” (Cooper and Schindler, 2003 p. 102).

There are several types of research design, namely the experimental design, a research design that rules out alternative explanations of findings deriving from it by having at least an experimental group, a control group, and random assignment to the two groups; cross-sectional or social survey design, a research design that entails the collection of data on more than one case and at a single point in time in order to collect a body of quantitative or quantifiable data in connection with two or more variables, which are then examined to detect patterns of association; longitudinal design, a research design in which data are collected on a sample on at least two occasions; case study design, a research design that entails the detailed and intensive analysis of a single case; and comparative design, a research design that entails the comparison of two or more cases in order to illuminate existing theory or to generate theoretical insights as a result of contrasting findings uncovered through the comparison (Bryman and Bell, 2003).

For this research, I intend to use mainly the cross sectional, which is also known as the social survey design. This type of research design is well suited and is widely used for the purpose of descriptive analysis (de Vaus, 2001), and it is supported with extensive sampling theory, multivariate analysis, and scaling methods, as well as sophisticated analytical tools, such as computer program SPSS (Aldridge and Levine, 2001 p. 9), making a survey design adequate for my research. My design is also similar, to some extend, with longitudinal design, since I track several movies in two periods of time. Finally, my design can also be termed as Comparative, since this research is comparing two movie strategic groups.

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Method of Data Collection

There are two kinds of data collection methods, namely the monitoring and the interrogation/

communication method (Cooper and Schindler, 2003). In the monitoring method, data is being collected by means of inspecting the activities of a certain subject or the nature of some material, without considering other kinds of interference.

The second method, the interrogation/ communication method, refers to questioning the subject and collecting the subject’s responses. The collection of data can be achieved through direct questioning by means of interviews, or by using the self-reported instruments that the subject should response by itself, and by using experiments. My research will use mainly the interrogation/

communication method, by means of questionnaires. I choose this method, because the monitoring method tend to be more subjective, depending on the individual who conducts the monitoring process.

On the other hand, communication method by means of questionnaires will be focusing more on the answers of the subjects.

A questionnaire will first be developed, and then later on, this questionnaire will be the base of my interrogation of the moviegoers that go to a cinema to watch a movie. In this sense, the research will focus more on the interpretation of the primary data, which is quantitative data. The same questionnaire will be spread among moviegoers of both mainstream and independent movies to see whether or not there are differences in criteria of choosing a movie to watch between these two groups.

On the other hand, secondary data, which include journals, related websites, past studies, articles, books, will be used as tools in providing and supporting the formulation of the questionnaire as well as the findings of this research.

Sampling

The sample of this research will be taken from the moviegoers visiting movie theaters in Groningen, The Netherlands. The term moviegoers, in this research, will refer to an individual who is coming to a theater to see one movie or more. As mentioned in the above passages, I intend to distinguish between mainstream and independent movies based on the character of the theaters in which the movies are released. Therefore, the survey will be conducted at two theaters located in Groningen, namely IMAGES, which shows art movies, and PATHÉ, which shows mainstream movies.

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Art cinema IMAGES, established in an old mansion house, is located on the northern end of the Poelestraat which begins in the south-eastern corner of the Grote Markt, the main square of Groningen. Apart from the weekly program consisting mainly of Dutch art house premieres and repertoire cinema, IMAGES is affiliated to the International Film Festival Rotterdam and organizes every year a pocket edition of this prestigious festival. IMAGES is also co-organizer of the yearly French film festival CINE PREMIERES and participates in the annual master class "film criticism"

with the Faculty of Humanities of Groningen State University. Furthermore IMAGES participates in two national circuits, one for young audiences called MOVIEZONE and one for documentaries called DOCUZONE. IMAGES is currently developing a new film festival under the banner "Metropolitan Images". (www.images.nu).

PATHÉ group has different business areas, namely the filmmaking business, Movie theaters business, and television. I will focus on the movie theater business. PATHÉ, which is part of a theatrical chain from France, is located in the old town Groningen. It exploits its own films and buys rights for other films, mostly from Hollywood studios, which are being played in PATHÉ’s Movie Theater and distribute in video and to TV Channels as well. It plays mainly the Hollywood movies, which are also known as the mainstream movies.

There will be two kinds of samples regarding the timing of the distribution of questionnaires.

The first sample will be taken on the opening week of a movie, shown in both IMAGES and PATHÉ.

And the second sample will be taken on the following week. Hopefully, this dual sampling can provide insight regarding the factors that influences the moviegoers’ choice of movies between a certain period of time. To gain the needed numbers of respondents, there will be approximately two or three movies’ audiences taken into account in both theaters, IMAGES and PATHÉ.

The needed minimum numbers of sample is assumed to be 100 respondents, taken from each theater, for every week. So, the minimum total sample is 400 respondents, 100 respondents from each theater, and for each week, the first and the following week. Due to the fact that this research was conducted in a limited time, conducted from May 2005 to June 2005, and there were some uncertainties about how long the independent movies in IMAGES will be played, it is assumed that each movies will be played at least for two weeks in IMAGES. This assumption was also applied to the movies played in PATHÉ. Therefore, the samples are taken from the first and the second week of playing.

The mainstream movies which are in the samples of this research are: Kingdom of Heaven, genre: drama / action, premiered on May 5, 2005; Without a Paddle, genre: action / comedy, premiered on May 12, 2005; and The Wedding Date, genre: romantic comedy, premiered on May 12, 2005. The independent movies are as follows: Confituur, genre: drama comedy, premiered on May

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12, 2005; Le Conseguenze dell’amore, genre: drama, premiered on May 12, 2005; and Dear Wendy, genre: drama, premiered on May 19, 2005. The movies played in PATHÉ are more likely to be played more than three times daily. On the other hand, the movies played in IMAGES are usually played once daily, and for some movies are played twice on Saturday, Sunday, and Monday.

In gathering the needed data, I had some assistance from colleagues.

Variables

Variables can be classified mainly into three broad types, namely: attributes (characteristics such as age, sex, marital status, previous education); behavior (questions such as what, when, how often); and opinion, beliefs, preferences, attitudes (questions on these four characteristics are probing the respondent’s point of view) (Aldridge and Levine, 2001).

For this research, the variables are taken from previous similar studies and research about movie industry (De Silva, 1998; De Vany and Walls, 2002; Austin, 1984; Gemser et al, 2005; Ravid, 1999), namely age; education; marital status; Director; Story type; Advertising; Actors; Reviews;

word of mouth; and the availability of the movie. Two other variables which will also be used are the current occupation and the question of whether or not the respondent has seen the movie before.

The variable of age, labeled [AGE], will be divided into 8 group, namely: below 16; 16-20;

21-24; 25-29; 30-39; 40-49; 50-59; and 60 or over. The youngest group will number 1 as its value and the oldest group will be valued 8. The second variable, marriage status, labeled [MARITAL], will only have two values, 1 for respondents who are still single, and 2 for respondents who are married or living together with his/her partner. Educational background, labeled [EDUCATION], are divided into 6 groups with the value as follows: 1= less than high school; 2= high school completed; 3= some college; 4= college graduate; 5= post graduate; and 6= associate degree. The variables such as Age and Education, which were also used in a similar research conducted by De Silva (1998), are the variables used by the annual MPAA surveys.

The second group of variables, consists of the respondent’s scale of importance from “not important”, labeled as number 1, less important [2], so-so [3], important [4], and “very important”, labeled as number 5. These variables represent the factors that are assumed to motivate the respondents in selecting movies to watch in theaters. The variables are as follows: famous director(s), labeled as [DIRECTOR]; famous actors or actresses, [ACTORS]; story type, [STORY]; advertising efforts from the studios or the theaters, such as previews, posters, from the internet, television advertisement, and so on, [ADVERTISEMENT]; many reviews about the movie, which means the

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number of reviews, [REVIEW]; influence from a friend(s), such as comments about the movie, ask to come along with, suggestions, etc., which referred as Word-of-Mouth [WOM]; and the last variable, the availability of the movie itself, for example, because of the schedule of the movie, available when a respondent comes to the theater, etc., [AVAILABLE].

The variables of Director, actors, story, advertisement, and available, are the variables that a movie has. While Review and WOM are the variables coming from outside the movie. As mentioned before in the previous chapter, these variables have also been used in several similar studies (Austin, 1984; Eliashberg and Shugan 1997; De Silva, 1998; De Vany and Walls, 2002;

Gemser et al. 2005).

For this study, I consider the number of reviews to be subjective to the respondents’ point of view. This means that it is up to the respondents to consider the quantity of reviews on a certain movie to be a lot or less, and how this quantity influences their decision to watch the movies. I also consider variable WOM to be related with the information as well as influence from the friends or relatives of the moviegoers. For example, comments, suggestions, knowledge of a certain movies from friends are considered as WOM in this study. Moreover, requests by friends to come along to the theater are also considered as WOM, since the requests, which coming from informed friends or relatives, also influence the decision of the moviegoers.

One additional variable, which is a binary variable, experience in watching the same movie before, [EVER], labeled 1 if yes, and 2 if no.

The Result

The following Table 3.1 shows the number of the respondents as well as the week in which the survey was conducted.

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Table 3.1 The number of Respondents

MOVIE Σ

Frequency Percent Opening

Week Percent Second

Week Percent Σ Cumulative Frequency

Cumulative Percent

Mainstream

Kingdom of Heaven 69 16.6 35 16.6 34 16.6 69 16.6

Without a Paddle 66 15.9 33 15.6 33 16.1 135 32.5

The Wedding Date 72 17.3 36 17.1 36 17.6 207 49.8

Independent

Confituur 63 15.1 33 15.6 30 14.6 270 64.9

Le Consequence 69 16.6 37 17.5 32 15.6 339 81.5

Dear Wendy 77 18.5 37 17.5 40 19.5 416 100.0

Total 416 100.0 211 100.0 205 100.0 416

Table 3.2 presents the attributes variables, namely the age; marital status; and educational background, of the respondents coming to watch the movies in IMAGES or in PATHÉ. Additional variable, the experience of ever watching the same movie before, is also projected in this table 3.2 on the next page. The table is divided mainly into four columns, namely the variables, total, mainstream (%), and Independent (%). Column total is divided into two sub columns, F for frequency and % for the percentage of each variables over the total respondents (416 respondents). The mainstream (%) column is divided into 4 sub columns, namely KoH , stands for the movie Kingdom of Heaven; WaP for the movie Without a Paddle; TWD for The Wedding Date; and Σ% for the total percentage for each variable of the mainstream movies. The independent also divided into 4 sub columns, namely Conf. for the movie Confituur; Le Cons. For the movie Le Conseguenze dell’amore; Wendy for Dear Wendy; and Σ%. Each movies, mainstream and independent movies, is divided into two columns, I and II, which stand for the first week and the second week.

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Table 3.2 Attribute Variables Total Mainstream (%) Independent (%) KoH WaPTWDConf. Le Cons.WendyVariables F % I II I II I II Σ % I II I II I II Σ % Age Below 16 - - - - - - - - - - - - - - - - 16-2044 10.6 2.1 .51.9 1.4 1.7 2.9 10.6- - - - - - - 21-2499 23.8 2.6 4.3 4.3 2.6 4.3 3.6 21.9- .2.5- .7.51.9 25-2991 21.9 1.2 2.4 1.4 2.1 1.0 1.0 9.1 1.0 1.2 1.7 1.4 3.1 4.3 12.7 30-3956 13.5 1 .5- .5.2.52.6 - .74.1 1.7 2.6 1.7 10.8 40-4929 7.0 .5- - .5.5.21.7 .21.4 1.2 1.0 .51.0 5.3 50-5930 7.2 .7.5.2.2.5.22.4 1.7 1.9 - .8.2.24.8 60 or over 67 16.1 .2- - .5.5.21.4 5.0 1.7 1.4 2.9 1.7 1.9 14.7 Marital Status Single 215 51.7 6.5 6.0 7.0 5.5 7.2 7.5 39.7.21.4 3.1 1.7 4.1 1.4 12.0 Married/ living together 201 48.3 1.9 2.2 1.0 2.4 1.4 1.2 10.17.7 5.8 5.8 6.0 4.8 8.2 38.2 Educational Background Less than high school- - - - - - - - - - - - - - - - high school completed 227 54.6 3.6 5.0 6.7 4.6 7.2 8.7 35.84.6 2.6 3.8 2.2 1.7 3.8 18.8 Some college 55 13.2 1.4 1.4 - 1.4 1.0 - 5.3 1.7 1.4 .71.7 2.4 - 7.9 College graduate 123 29.6 2.6 1.4 1.2 1.9 .5- 7.7 1.4 2.4 4.3 3.4 4.8 5.5 21.9 Post graduate 11 2.6 .7.2- - - - .1.2.7- .5- .21.7 Associate Degree- - - - - - - - - - - - - - - - Ever watch before Yes1 .2- .2- - - - .2- - - - - - - No415 99.8 8.4 7.9 7.9 7.9 8.7 8.7 49.57.9 7.2 8.9 7.7 8.9 9.6 50.2 Total416 100.0 8.4 8.2 7.9 7.9 8.7 8.7 49.87.9 7.2 8.9 7.7 8.9 9.6 50.2

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Data Analysis

For the data analysis, I use mainly the statistical ANOVA for each of the factor above. Statistical measurement Regression cannot be used for the analysis of my research, since it requires at least two alternatives that the same respondents would chose in a period of time. The respondents of my research have no alternative, since they will definitely or have watched the movie(s) from the sample.

Regression can be used if my samples have other alternative beside watching the movie, such as going to the arcade, shopping, etc.

ANOVA is used to compare means for the variables in both Mainstream and Independent movies. From this test, the difference will be considered as significant or not significant, and therefore, the hypotheses can be answered.

Descriptive as well as correlation matrix will also be used to describe the nature of audiences of both mainstream and independent movies and to describe what are the connections between the factors. These tools will be used as additional information, backed up by literature from previous studies.

Using ANOVA as well as descriptive and correlation matrix, I expect to find some differences in the factors that motivate the moviegoers of Mainstream movies and independent movies. Moreover, I also expect that time will also influenced these differences.

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CHAPTER IV Analysis

Table 4.1 provides both descriptive statistics as well as the result of the ANOVA analysis for the whole sample, Mainstream and Independent movies. The total sample is 416, divided into 207 respondents of Mainstream movies, and 209 respondents of Independent Movies. The samples are being categorized into age [AGE], marital status [MARITAL], educational background [EDUCATION], whether or not the respondents have ever watched the same movie before [EVER], famous director [DIRECTOR], famous actors / actresses [ACTORS], story type [STORY], advertisements [ADVERTISEMENT], number of reviews [REVIEW], Friends’ effect [WOM], and the availability of the movie [AVAILABLE].

Table 4.1 Descriptive Statistics and ANOVA result (overall Mainstream Vs. Independent)

Mainstream Independent ANOVA Category

Mean S.D. Mean S.D. F Sign.

AGE 3.52 1.468 5.84 1.681 225.674 .000

MARITAL 1.20 .403 1.76 .428 187.361 .000

EDUCATION 2.47 .823 3.13 .965 55.579 .000

EVER 2.00 .070 2.00 .000 1.010 .316

DIRECTOR 1.52 .918 1.97 .948 24.145 .000

ACTORS 2.04 1.192 2.05 1.011 .007 .933

STORY 3.58 .883 3.49 .991 .992 .320

ADVERTISEMENT 1.98 1.005 2.16 .652 4.812 .029

REVIEW 1.53 .886 2.02 .901 32.226 .000

WOM 3.63 .876 3.86 .980 6.017 .015

AVAILABLE 3.95 .874 3.43 .769 42.427 .000

N 207 209 416

Bold characters indicate the categories which are significantly different below 5%

The results indicate, that there is a significant difference between those watching mainstream and those watching independent movies in the following categories: age, marital status, educational

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background, famous director, advertisements, number of reviews, WOM, and the availability of the movie.

The consumers of Mainstream movies are, on average, 21 to 24 years of age, while the consumers of independent movies are older, 30 to 39 years old. This is also probably the reason why most of the consumers of mainstream movies are most likely to be single and have a lower educational background, while more married people are the consumers of independent movies, with higher educational background than the consumers of mainstream movies.

One of the characteristics of the movies that proved to significantly differentiate the consumers’ behavior in watching mainstream or independent movies, is the inclusion of a famous director or not. The descriptive statistics imply that a famous director is a less important factor in watching mainstream movies then in watching independent movies, although both consumers of mainstream and independent movies suggested that famous director is not so important , or at least less important, than the story type, WOM, and the availability of the movie itself.

An interesting finding on this analysis is the fact that, despite the fact that both consumers of mainstream and independent movies consider advertisements to be less important stimuli for them to watch movies, and also the fact that this factor significantly differentiate mainstream and independent consumers, descriptive analysis showed that the consumers of independent are more influenced by the advertisements than the consumers of mainstream movies. The mean for advertisement effect (previews, trailers, etc.) in the case of mainstream is 1.98 (not important), while in the case of independent is 2.16 (less important).

As expected, there is also a significant difference between the mainstream and the independent moviegoers in terms of the number of reviews. The descriptive statistics imply that the number of reviews seems to be ranging from not important determinant to less important determinant factor in attending the mainstream movies (mean 1.53 and standard deviation .886). While in the case of independent movies, the number of reviews have a stronger effect on the decision to watch movies, even though it is still on the “less important” level (mean 2.02), ranging from “not important” to “so- so” level (standard deviation .901). These findings suggest that indeed, the number of reviews can act as influencers of the decision to watch movies, in the case of independent movies.

The ANOVA calculation also suggests that there is a significant difference, below 5% level, between the Mainstream movies and the independent movies regarding the variable WOM. The descriptive statistic indicates that both Mainstream as well as Independent moviegoers consider WOM to have “so-so” influence in their decision to watch the movies. However, the descriptive statistic also points out that WOM has slightly more influence on the Independent moviegoers, than on the Mainstream moviegoers.

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Another interesting findings, is the significant difference in the terms of the availability of the movie. As mentioned before, the availability of the movie refers to for example because of the schedule of the movie fits the vacant time of the moviegoers, or the movie is available when the moviegoers come to the theater, etc. The descriptive statistics suggest that the influence of the availability, is stronger for the mainstream moviegoers than for the independent moviegoers, even though it is on the same level “so-so”. The standard deviation is also smaller for the independent moviegoers, indicated that the level “so-so” is more constant than in the case of the mainstream moviegoers. Looking at the fact that the mainstream movies in the sample are played more than three times daily, it can be assumed that the moviegoers have more chance to watch the mainstream movies. While in case of independent movies, the samples are usually only played once daily, therefore the moviegoers might have to be more careful in planning their movie-going activities.

The second table (Table 4.2), is the descriptive statistics and the result of an ANOVA calculation for the case of mainstream movies, comparing the first week and the second week. With the total sample of 207 samples, divided into 104 samples in the first week and 103 in the second week.

Table 4.2 Descriptive Statistics and ANOVA result (Mainstream 1^st & 2^nd Week)

1^st 2^nd ANOVA