Making a Legendary Data Driven Movie

How will Legendary Entertainment continue to use data in the making of their films?

Legendary Entertainment is a media studio that specializes in the production and marketing of film, television, digital projects, and comics. It was formed in 2000 by Thomas Tull with $500 million from private equity firms. In the past it has been quite successful at the box office, with over 50 film releases including Christopher Nolan’s Dark Knight Trilogy, the Hangover films, and Straight Outta Compton. It has also had success in its other business lines, including the recent television series The Looming Tower for Hulu and the comic book series Holy Terror by Frank Miller.


Tull had been instrumental in making Legendary one of the first film studios to really embrace the use of data in many of the aspects of film production. It began in 2013 with a partial acquisition of a firm called StratBridge that had been building software for sports teams to help them get more sophisticated in analytics. Over the years, the team grew to be a 60 plus person team.


Legendary’s analytics team begins when a film concept is just in its ideation phase. They will look at data through social media to determine whether there would be a market for that specific type of film and, more importantly, how much they generally think they could make at the box office given certain other variables. They look for learnings on how to cast their films, what release dates would work best, and other similar movies to develop comps. From there, they will use that data alongside a host of other factors (e.g. which directors or actors are interested in the project, what other studio partners they have financing the project, is the film part of a larger franchise or storyline, etc.) to determine whether or not to send it to production.


Once the film is made, data analytics are used heavily in the marketing of a film. In the entertainment industry, films tended to be marketed in fairly traditional and conservative manners: there would be billboards, magazine and newspaper ads, and trailers that would appear before other movies and on television. Other than small targeting of certain broad audience demographics (like gender and age), not much else was used in marketing a film. In the last few years, however, Legendary has begun to do micro targeting to try to market more efficiently. They try to steer away as much as possible from the carpet bomb approach where they will advertise to anyone without care whether they will likely see the film. Instead, if you see an advertisement for one of their films while searching for something online, Legendary wants to have decently high confidence that you are actually likely to go see the movie. After assembling lists of thousands of attributes on people, and attaching them to either social media accounts or email addresses, they tried to separate these people into one of three categories: 1) people most certainly going to see the film; 2) people most certainly not going to see the film; and 3) ones that could be swayed either way (called “persuadables”). Once that group is isolated, the goal is then to deliver the right form of advertising to them at the right time through the right channel. Much of this learning and micro targeting was done through the use of AI technology that StratBridge helped to pioneer. Through this process, the goal is to be able to reduce marketing spend significantly.


The amounts of money discussed are significant. Legendary has tended to help finance blockbuster level films, such as The Dark Knight, with budgets that can reach a couple hundred million dollars. While most of this budget is reserved for the actual production of the films, a large part is also allocated for marketing spend. A reduction in marketing spend of 15% per film (some estimates at what Legendary is saving through this process) can yield benefits of tens of millions of dollars per film.


While Legendary has been one of the pioneers in the film industry in using heavily advanced analytics to help become more efficient in their decision making and marketing spend, others in the industry are trying to catch up. They believe they have an advantage given the size of investment they’ve put into their team upfront, but nonetheless it is becoming less taboo in the film industry to discuss analytics in film production. As others catch up, how will Legendary respond?


One thought is to take the data they have been looking at in the production of films and work with movie theaters on the distribution of their content as well. Other than a general release date, Legendary has not worked too much on the distribution side of the viewing experience (it should be noted by law they are not allowed to run their own theaters, so the suggestions here would be considered more advisory). Though obviously Legendary would want movie theaters to show their films on as many screens as possible, they can also help by identifying places that should have more showings or at specific times in the day. For example, as their films skew younger, perhaps they could partner with some other film studios who would allocate screen real estate in the evenings for an additional fee. This could be mutually beneficial, especially for other studios that would like some revenue certainty before releasing their films for wider distribution.


There is also some concern about Legendary’s continued commitment to their investment in data analytics. In January 2017, Tull left the company after the Chinese conglomerate Wanda Group had bought out most investor stakes in Legendary Entertainment. After a brief stint by Jack Gao as CEO, in late 2017, attorney Joshua Grode was appointed the new CEO. This coincided with Legendary’s announcement that they would put up their applied analytics division for sale in the coming months. With these questions still lingering, it is unclear if Legendary will be able to retain its competitive advantage and brand as a leading user of data in the production and marketing of films.






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