Case Studies

Effectively Forecasting Attendance to Manage Movie Theatres

Eliashberg. J., Swami, S., Weinberg, C. B., & Wierenga, B. (2001). Implementing and evaluating SilverScreener: A marketing management support system for movie exhibitors. Interfaces, 31(3), S108-S127.

SilverScreener. Every Monday morning, the management of Path� Theaters in the Netherlands decides which movies in its cinemas to retain and which to replace. It must choose replacement movies from those available at that time. The SilverScreener model, a mathematical programming system, was implemented to help Path� managers make those decisions for one six-screen theater.

SilverScreener is a marketing management support system developed in 1999 by Swami, Eliashberg, and Weinberg. It is designed to provide exhibitors of movies an effective attendance forecasting system. A theater owner trying to manage screens well faces complexity from various sources:

  1. There is a large number of movies to compete for the few screens available.
  2. As distributors release new movies each week, they pressure the owners to provide screens and play time for them.
  3. Theater owners often base a number of theaters in the same geographical area and must manage the interdependency among several facilities.
  4. The distributor/exhibitor contract imposes complicating constraints, such as obligating the exhibitor to play the film for a certain period of time even when audience demand is weak.
In addition, the contractual agreements between movie distributors and exhibitors are unique to the industry. They include a sliding scale system so that over the number of weeks that a movie plays at a theater, the initial advantage in the distribution of revenue is allocated to the distributor, but as the weeks continue, the advantage gradually shifts to the exhibitor. Keeping the bottom line in mind, carefully selecting the movies to be shown is essential for a theater to be profitable. Left to their own devices, most managers make such decisions using their intuition and do not rely on any data sources.

An attendance forecasting system was developed using Path�'s historical data, managerial judgment, and theater specific factors. The performance of the test theater was measured against the performance of two unaided similar multi-screen cinemas. The revenues at the theater using SilverScreener recommendations were higher than those at the two comparison theaters. Managerial attitudes towards the modeling system improved after implementation of SilverScreener.

Although there were other models in place, they had proved very complex from an analysis perspective. The average movie theater manager was not statistically sophisticated enough to either input the data or to interpret the results for accurate decision-making. The results from the experimental implementation of the SilverScreener model were comparable to the results from the much more complex models already in place. The key personnel were comfortable using the SilverScreener model and found it to be a useful tool.

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