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Audience tests: Plot thickens

As technology evolves and competition heats up, this is a time of great change in Hollywood market research.

August 31, 2003|Elaine Dutka Times Staff Writer | Times Staff Writer

Columbia Pictures chief Harry Cohn had his own way of determining whether a movie played well. Sitting in the screening room, he'd use his rump as his guide. "This is a very good picture," the mogul once said, "but it is exactly 19 minutes too long. Exactly 19 minutes ago, my [rump] started to itch, and right there, I know the audience would feel the same thing."

Such was the mind-set that market research gurus Joe Farrell and Catherine Paura encountered when they headed to Hollywood in 1977. The task at hand: to bring the gut-oriented movie world up to the rest of American business when it came to product testing. Though data aren't the whole picture, they argued, only a fool ignores the audience. Conversant with the players and adept at handholding, they became an institution in a numbers-resistant town. He was a born salesman and she had strong organizational skills, but they eventually became interchangeable.

Through the years, the pair developed a virtual lock on the $100 million that studios spend annually to test their movies and costly promotional campaigns. Their National Research Group led movie executives down a path where they, like politicians, have faced criticism for being "survey-driven" -- changing story lines, endings and pacing in response to findings. NRG data became a touchstone for studios laying out $90 million to produce and market an average film.

Having presided over this sea change, however, Farrell and Paura recently left the field (they're making movies for Disney). Their departure -- along with increasing use of online data -- represents a watershed for Hollywood. It's already changed the way some studios market and test films and created a free-for-all.

"It's the wild, wild West -- and everyone is trying to take the reins," one studio marketing chief observes.

While NRG (rebranded Nielsen NRG) remains the industry's gold standard, it's vying with challengers such as perennial No. 2 MarketCast, the computer-oriented OTX (Online Testing Exchange) and C.A. Walker, which are eager to fill the void.

Shaking things up even more are changes on the technological front. Online research is replacing personal and telephone contacts in key aspects of the business.

"Change is scary," says Shelley Zalis, founder of OTX. "But I wanted to give companies that had been doing things the same way for 25 years tools that dig deeper into the moviegoer mind-set. Early on, I told the studios not to put all their eggs in one basket, because I may not come through. But every time there's a difference between traditional pencil and paper surveys and online predictions, online does better."

The new methodology is no substitute for recruited screenings, at which producers and directors "smell" an audience -- taking in the laughs, the boos, the applause. Nor are post-screening focus groups, at which people deliver their verdict on a movie, likely to be phased out. But when it comes to evaluating promotional materials, proponents say, the online approach is faster and cheaper than interviewing people at malls. And it's more efficient than telephone surveys when assessing the awareness of -- and interest in -- a movie.

Dan Rosen, senior vice president of research at Warner Bros., says that even before the departure of Farrell and Paura, he was exploring alternatives because "mall intercepts" and telephone polling became less viable in the 1990s. NRG, wedded to those techniques, he maintains, was synonymous with the status quo.

"Anyone with an extra half-hour didn't represent the sample you were going after -- the person in a hurry," he says of the shoppers interviewed. "And people became more concerned with privacy, putting their names on 'no call' lists. .... We're finally tapping into the Internet, like the rest of the research world."

Paura compares the change in market research to the mid-1970s, when telephone research supplanted the door-to-door variety because of the rising crime rate and women entering the work force.

Kevin Yoder, who with his partner Howard Ballon runs NRG Nielsen, compares it to the mid-1940s, when the studio system began to erode.

"And the introduction of computers is similar to the introduction of TV, which the studios feared -- but ultimately embraced."

An inevitable shift

Zalis, a self-described "computerphobe," was one of the first to realize the limits of traditional methodology and the potential of the Internet approach for movie research. In 1998, she helped develop online research for A.C. Nielsen, but, convinced that corporate culture and technological innovation didn't mesh, she created OTX -- an independent entity within IFILM Corp. 2 1/2 years ago. Warner Bros. and Sony were early supporters when only about a third of all U.S. homes had Internet access. Now that it's double that, she works with most of the studios.

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