Friday, July 20, 2012

Market predicts Dark Knight audiences unafraid

An insane gunman at a Dark Knight Rises midnight showing killed 12 people. Networks are taking down TV spots for the movie, at least for now. Will fear and decreased advertising cause a slump in ticket sales, or will the increased publicity draw in interest?

The Hollywood Stock Exchange says it's mostly a wash as a derivative that pays based on total box office revenue went nowhere today (up 1.28% or an expected increase of $6.24 million).

There are a few caveats in order. When a good movie is released the stock usually jumps up just prior to release and again over the release weekend. (See the pattern for The Avengers here.) The increase prior to release reflects information from reviewers saying the movie is good, which suggests more repeat viewers and good word of mouth down the road. The increase at release reflects resolution of uncertainty over whether the general public agrees with the critics (usually it does) and new information like new box office tracking data. In the case of The Avengers critics gave the movie a big thumbs up but when CinemaScore revealed the average viewer gave the movie an A+ the stock jumped substantially (on 5/5) as it became clear repeat viewings and word of mouth would be particularly strong. Data on sales at midnight release and Friday and Saturday estimates may have contributed to the increase as well.

In light of that pattern we might have expected the TDKR stock to jump a few percentage points today on resolution of uncertainty (in its favor) and good word of mouth. I'll plug my positive review here: it's as good as the other two. Reports do indicate that TDKR broke midnight box office records by a nice margin ($25-30 million vs The Avengers $18) but I think that was widely expected based on tracking data as this report from yesterday indicates. So I think taking the slight upward movement at face value is reasonable.

That's good news. It'd be ironic, and sad, if fear kept the masses from seeing a film largely about overcoming fear.

"Why do we fall Bruce? So we can learn to pick ourselves up." - Thomas Wayne

Update: Today, July 21st, TDRK is down $11 million and the opening at $77.2 million was somewhat weaker than some projections in the $80-90 range. It looks like some people are being deterred by fear but only something like 2% of people interested in the film. I'm think it's a good showing for American courage.

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