Friday, April 02, 2010

Twitter Can Predict Future Movie Box Office Revenues and That Might Be Just the Beginning

From the paper "Predicting the Future With Social Media" from two researchers Hewlett-Packard's Social Computing Lab:

Abstract: In recent years, social media has become ubiquitous and important for social networking and content sharing. And yet, the content that is generated from these websites remains largely untapped. In this paper, we demonstrate how social media content can be used to predict real-world outcomes. In particular, we use the chatter from Twitter.com to forecast box-office revenues for movies. We show that a simple model built from the rate at which tweets are created about particular topics can outperform market-based predictors. We further demonstrate how sentiments extracted from Twitter can be further utilized to improve the forecasting power of social media.

Conclusion: In this article, we have shown how social media can be utilized to forecast future outcomes. Specifically, using the rate of chatter from almost 3 million tweets from the popular site Twitter, we constructed a linear regression model for predicting box-office revenues of movies in advance of their release. We then showed that the results outperformed in accuracy those of the Hollywood Stock Exchange and that there is a strong correlation between the amount of attention a given topic has (in this case a forthcoming movie) and its ranking in the future. We also analyzed the sentiments present in tweets and demonstrated their efficacy at improving predictions after a movie has released.

While in this study we focused on the problem of predicting box office revenues of movies for the sake of having a clear metric of comparison with other methods, this method can be extended to a large panoply of topics, ranging from the future rating of products to agenda setting and election outcomes. At a deeper level, this work shows how social media expresses a collective wisdom which, when properly tapped, can yield an extremely powerful and accurate indicator of future outcomes.

MP: The chart above shows the Predicted vs. Actual box office scores using the tweet-rate as a predictor of box office revenues and the Hollywood Stock Exchange (HSX), "a popular playmoney market, where the prices for movie stocks can accurately predict real box office results.... and which can be considered the gold standard." According to the authors, "the model built using the tweet rate outperforms the HSX-based model."

6 Comments:

At 4/02/2010 5:25 PM, Anonymous gettingrational said...

Hey, Showbiz Folks. Check your contract before your next tweet.The studios are cracking down on Twitter tweets except for authorized social media hubs. Of course they won't prevent PR folks from stoking the buzz.

Social media is a poweful cultural force and Twitter tweets are probably an excellent real-time box-office predictor.

 
At 4/03/2010 2:27 PM, Blogger Bruce Hall said...

Given the age range of most users, it would seem that such correlation would be strongest for products/outcomes that are the focus of that age range.

 
At 4/04/2010 2:06 AM, Blogger play said...

this would appear to be true only for say the top 10 movies of that month/quarter.
For the long tail the predictive power of social tweets might be better than tossing a coin.

 
At 4/04/2010 2:07 AM, Blogger play said...

oops,
might be NO better than tossing a coin.

 
At 4/05/2010 10:14 AM, Blogger Karl said...

There is a lengthy discussion of this in the book, The Numerati, by Stephen Baker...a great read for anyone interested in how social media, open innovation, data mining, modeling and simulations, and other mathematics0based disciplines are changing the world.

 
At 4/12/2010 1:36 PM, Anonymous Anonymous said...

It is no great feat to predict box office after a movie has opened. There are a number of predictors for this, none of which include HSX. Analysis is nothing more than a promotion for Twitter data in the lead-up to the futures market (real-life exchange being contested by the MPAA).

 

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