Abstract:
The objective of the study is to develop a parsimonious model to predict the box office success of a Bollywood movie before its release based on historical data. A movie is considered successful if it is able to generate a ROI (return on investment) higher than the weighted average risk-free rate of return. The performance of a total of 447 movies over a 9 year period were examined. A set of variables that were identified as determinants of a movie’s box office success by previous literature were tested for their applicability in the Indian context. In addition, certain variables that were unique to the Indian movie industry were investigated for their influence on the box office success of movies. The results demonstrate that factors like budget, screen count, genre, and release period all have significant influence on the outcome of a movie at the ticket window. However, contrary to popular belief, the historical box office performance of the lead actor, director or music director, and retelling of an existing narrative in the form of a remake were not found to add footfalls during the release of the movie.
