What Can Business Learn from Film Remakes and Sequels?

Sequels seem to be a pattern with the movies. But are most sequels successful and what makes one a hit at the box office or not? And what can business learn from them?

Sequels seem to be a pattern with the movies. But are most sequels successful and what makes one a hit at the box office or not? And what can business learn from them? One of the reasons movie studios do sequels is because of lower risks filming the sequels in comparison to original films. Success, however, is really based on a number of factors. Research on what makes success of sequels gives some reasons for the success or lack of it of repeat films, research the authors believe could be adapted to other industries. The report is titled, “Conceptualizing and Measuring the Monetary Value of Brand Extensions: The Case of Motion Pictures.” Dr. Mark B. Houston of the M.J. Neeley School of Business at Texas Christian University, and Dr. Thorsten Hennig-Thurau and doctoral student Torsten Heitjans, both of Bauhaus University of Weimar in Germany are the principal authors. It will appear in an edition of the Journal of Marketing later this year. “We found that sequels have two advantages over original movies that are not sequels: They have higher average box office returns and are less financially risky,” says Dr. Houston, a professor of marketing. “We can predict outcomes with more certainty because of the known value of the parent brand. The venture is less risky because of more precision in predicting the outcomes.” In order to make these predictions and evaluation of outcomes the researchers look at the quality of the original film, public awareness of the original, how widely the parent film was distributed, the popularity of the stars, continuity of certain elements to include the star, director, genre and rating. Star continuity, though, was found to be particularly significant. Spider-Man sequels would not have been as popular without Tobey Maguire, researchers found. “We found that the new product complements the parent brand because a sequel stimulates significant new sales for the DVD of the parent film both at the theatrical release of the sequel and when the sequel is released on DVD,” says Dr. Houston. He points out that the valuation model can be adopted for other products, not just movies. Industries can examine industry-specific measures to determine the value of extending a new product from the parent brand. Night at the Museum 2 with Ben Stiller is showing now in theaters across the country. Critics gave the original 2006 film a rating of “C+” The sequel has a rating of 3.1, which is also a “C+” rating. It is ranked #4 in the list of top ten films this week. The original was ranked #1 for the first several weeks after it came out in December 2006, but by February it was ranked #4. The sequel was released to theaters on May 22 so it has been in theaters approximately three weeks and is ranked #4, whereas the original was ranked #1 within the same time period. But what about movie remakes? Are they successful? What would that tell businesses about actually repeating the same product with different actors and perhaps slightly different stories? And would some of the same factors apply? The original Taking of Pellum 1,2, 3 starred Martin Balsam as the lead villain and Walter Matthau as Walter Garber, the transportation executive manning the phones. The present film stars John Travolta as the lead man involved in hijacking the subway train and Denzel Washington as Walter Garber as the transportation chief at the computer involved as the hero in the film. Presently the film is ranked #3 with the release date of June 15. One critic maintains the second film is better than the first, with better film actors / but maintains the remake wasn’t worth it. Having seen both films, one might disagree, given Matthau’s stature as a film actor; and not everyone might agree that the remake is better, perhaps just has more action in color rather than black and white. Both films, however, show popularity with viewers, indicating remakes can do well using some of the information researchers found for sequels. This is likely another lesson for business that the same formula with good advertising and prominence might work again for success of a product.