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DETERMINANTS of the BOX OFFICE SUCCESS in the EUROPEAN FILM MARKET Faktory Finančního Úspěchu Filmu Na Evropském Filmovém Trhu

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DETERMINANTS of the BOX OFFICE SUCCESS in the EUROPEAN FILM MARKET Faktory Finančního Úspěchu Filmu Na Evropském Filmovém Trhu Masaryk University Faculty of Economics and Administration Department of Finance DETERMINANTS OF THE BOX OFFICE SUCCESS IN THE EUROPEAN FILM MARKET Faktory finančního úspěchu filmu na evropském filmovém trhu Master thesis Supervisor: Author: Ing. Daniel NĚMEC, PhD. Mgr. Bc. Adéla DVOŘÁKOVÁ Brno, 2017 MASARYKOVA UNIVERZITA Ekonomicko-správní fakulta ZADÁNÍ DIPLOMOVÉ PRÁCE Akademický rok: 2016/2017 Studentka: Mgr. Bc. Adéla Dvořáková Obor: Finance Název práce: Faktory finančního úspěchu filmu na evropském filmovém trhu Název práce anglicky: Determinants of the Box Office Success in the European Film Market Cíl práce, postup a použité metody: Předmětem práce je identifikace faktorů, které mají vliv na tržby filmů na evrop- ském filmovém trhu a odhad velikosti tohoto vlivu, formulace závěrů ohledně možností producentů ovlivnit tržby jejich filmu, který lze chápat jako rizikovou investici. Práce se tedy bude zaměřovat na film jakožto projekt spojený s vyso- kou mírou nejistoty a rizika. Náplní práce bude zanalyzovat vzorek filmů vypro- dukovaných na evropském filmovém trhu a identifikovat faktory, které ovlivňují ekonomický úspěch filmu, s důrazem na ty, které mohou být ovlivněny již pro- ducenty v prvotních fázích projektu (pre-release factors). Výstupem by měly být závěry ohledně možnosti producenta ovlivnit tržby filmu a případná doporučení v tomto ohledu. Použitá data: databáze IMDb.com (International Movie Database) Metody: studium literatury a předchozích výzkumů na dané téma, regresní ana- lýza, syntéza Postup práce: 1. Vymezení cíle práce a pracovních hypotéz, charakteristika filmového trhu a jeho specifik (bariéry vstupu na trh, produkce filmu, finanční aspekty produkce filmu, důraz na riziko pro investory). 2. Rešerše předchozích výzkumů na dané téma se zaměřením na přístupy a me- tody v nich užité. 4. Představení zdrojů dat a datové báze užité v práci, představení použitých eko- nometrických nástrojů, formulace ekonometrického modelu a jeho věcný popis, odhad parametrů, provedení diagnostických testů, ověření robustnosti výsledků. 5. Prezentace závěrů (interpretace dosažených výsledků), formulace doporučení, shrnutí hlavních výsledků, verifikace v úvodu stanovených hypotéz, porovnání výsledků s jinými studiemi na dané téma. Rozsah grafických prací: Podle pokynů vedoucího práce Rozsah práce bez příloh: 60 – 80 stran Strana 1 z 2 Literatura: KOOP,Gary. Introduction to econometrics. Chichester: John Wiley & Sons, 2008. 371 s. ISBN 9780470032701. FINNEY, Angus a Eugenio TRIANA. The International Film Business: A market guide beyond Hollywood.. 2nd. New York: Routledge, 2015. 287 s. ISBN 978- 0-415-53153-5. TERRY, Neil, John W. COOLEY a Miles ZACHARY. The determinants of foreign box office revenue for English language movies.. Journal of International Busi- ness and Cultural Studies, 2010, roč. 2, č. 1, s. 1-12. ISSN 1941-5087. DENIZ, Borga a Robert B. HASBROUCK. WHEN TO GREENLIGHT: Examining the Pre-release Factors that Determine Future Box Office Success of a Movie in the United States. International Journal of Economics and Management Sciences, 2012, roč. 2, č. 3, s. 35-42. ISSN 2162-6359. Vedoucí práce: Ing. Daniel Němec, Ph.D. Pracoviště vedoucího práce: Katedra ekonomie Datum zadání práce: 11. 6. 2016 Termín odevzdání diplomové práce a vložení do IS je uveden v platném harmonogramu akademického roku. V Brně dne: 10. 5. 2017 Strana 2 z 2 Jméno a příjmení autora: Adéla Dvořáková Název diplomové práce: Faktory finančního úspěchu filmu na evropském filmovém trhu Název práce v angličtině: Determinants of the Box Office Success in the European Film Market Katedra: financí Vedoucí diplomové práce: Ing. Daniel Němec, Ph.D. Rok obhajoby: 2017 Anotace Předmětem diplomové práce „Faktory finančního úspěchu filmu na evropském filmovém trhu” je film, jakožto podnikatelský záměr spojený s vysokou mírou rizika. Jejím cílem je identifikace faktorů ovlivňující filmové tržby za pomoci analýzy veřejně dostupných dat a ověření hypotéz týkajících se možných strategií sloužících ke snížení podnikatelského rizika. Úvodní část obsahuje charakteristiku současného evropského filmového trhu a shrnutí dosavadních poznatků. Následuje popis datové báze a analýza dat. V poslední části práce jsou prezentovány výsledky analýzy, shrnuty závěry a formulována doporučení. Annotation The subject of the thesis: “Determinants of the Box Office Success in the European Film Market” is a film – a project connected to a high level of business risk. Its goal is to identify the factors which influence the theatrical revenues using publicly available data and to test hypotheses on possible risk-mitigation strategies. The first part, containing characteristics of the contemporary European film market and literature review, is followed by the description of the data set and data analysis. At the end the results are presented and summarized and recommendations are formulated. Klíčová slova Film, filmový trh, tržby, riziko, koprodukce Keywords Film, film market, box office, risk, co-production „Prohlašuji, že jsem diplomovou práci vypracovala samostatně pod vedením Ing. Daniela Němce, PhD. a uvedla v ní všechny použité literární a jiné odborné zdroje v souladu s právními předpisy, vnitřními předpisy Masarykovy univerzity a vnitřními akty řízení Masarykovy univerzity a Ekonomicko-správní fakulty MU.“ Brno, 11. 5. 2017 Acknowledgments I would like to express my sincere gratitude to my advisor, Daniel Němec, for his helpfulness and responsiveness, useful advice and kind support. My thanks also go to Michał Kazimierczak for his initial ideas, help with the data and suggestions, but most importantly, for being such a good example to me, both professionally and personally. A big thank you goes also to Cristina Rujan for her advice, comments, technical assistance and proofreading, but most of all, for her enthusiasm and friendship. Last but not least, I would like to thank my family for having supported me during the whole period of my studies and Luis for being here for me under all circumstances. Table of Contents 1 Introduction ......................................................................................................................... 9 2 Risk, revenues and profits in the film industry ................................................................. 11 2.1 Risks associated with the film production ................................................................. 11 2.1.1 Completion, delivery and costs escalation risk ................................................... 12 2.1.2 Distribution risk .................................................................................................. 12 2.1.3 Marketing risk ..................................................................................................... 12 2.1.4 Performance risk ................................................................................................. 13 2.2 Risk mitigation strategies ........................................................................................... 13 3 Specifics of the market of the European Union ................................................................ 16 3.1 Major operators .......................................................................................................... 16 3.2 Budgets and profits in the EU film industry .............................................................. 16 3.3 Ambivalence of the EU market – single market vs territoriality ............................... 17 3.4 Challenges of the EU film industry ............................................................................ 18 4 Literature review ............................................................................................................... 19 4.1 Measures of financial success .................................................................................... 20 4.2 Methodology .............................................................................................................. 20 4.2.1 Linear regression ................................................................................................. 20 4.2.2 Path analysis ....................................................................................................... 21 4.2.3 Three-stage least squares .................................................................................... 22 4.2.4 Alternative techniques – modelling the probability mass ................................... 22 4.2.5 Alternative techniques – artificial neural networks ............................................ 23 4.3 Factors of success ....................................................................................................... 23 4.3.1 Pre-release factors ............................................................................................... 23 4.3.2 Post-release factors ............................................................................................. 30 5 Hypotheses ........................................................................................................................ 34 6 Data source: The Internet Movie Database ....................................................................... 36 6.1 Qualitative data on films ............................................................................................ 36 6.2 Financial data on films ............................................................................................... 37 6.3 Additional data sources .............................................................................................. 37
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