On Sunday night we learned the “best picture” in 2012 was Argo. Why is Argo the “best” picture? Because the nearly 6,000 members of the Academy of Motion Picture Arts and Sciences say Argo is “best”.
But as I note in my latest for Freakonomics — An Economist on the Oscars – there is another group that seemed to come to a different assessment. If we look at revenue, the “best” picture was Marvel The Avengers. This film, though, received no love from the Oscars.
And that led me to note:
Movies are not a product made just for the members the academy. These ventures are primarily made for the general public. And yet, when it comes time to decide which picture is “best,” the opinion of the general public seems to be ignored. Essentially the Oscars are an industry statement to their customers that says: “We don’t think our customers are smart enough to tell us which of our products are good. So we created a ceremony to correct our customers.”
This post generated a few responses. The big response (at least, what I thought was big) I will get to in a moment. For now here are three sentiments I saw in glancing over the comments (and I am paraphrasing here). My response is offered in the bullet point below each comment.
We shouldn’t focus on revenue but on some measure of profits.
- I think that this is incorrect. At least, if our interest is in measuring customer reactions (and I am not saying – as I note below – that this is all we should be concerned with), we need to focus on the demand side of the market. And that means we are not concerned with costs. We simply want to know which films customers liked the best. Why they might like those films is beyond the question I am asking.
There are items with high costs (such as expensive steaks) that don’t sell as much as cheap hamburgers. So are hamburgers better than expensive steaks?
- Such a comment doesn’t seem to apply to movies. My sense is that most movie tickets are similar in price. So I don’t think people went to see Marvel the Avengers because it was cheaper than Argo.
People might buy tickets to movies they don’t actually like.
- I imagine it is possible for some people to get “fooled”. I find it hard to believe that Marvel the Avengers just tricked large numbers of people into giving up their money and time.
As noted, I am just paraphrasing some sentiments I saw.
Beyond these issues, let me also respond to one specific comment that expresses a sentiment others offered as well:
Saying The Avengers is the best movie of the year because it grossed the most is like saying that Fifty Shades of Grey is the best book of the year because it sold the most copies.
This comment gets at the heart of my story. We have two evaluations of movies. The Oscars is a statement from the “experts”. The revenue numbers are a statement from the people who buy the tickets. What I am saying is that I see no reason why we should believe the “experts”. By what criteria is Argo “better” than Marvel the Avengers?
This is something we talk about in economics. In discussing the concept of utility we note that you cannot make interpersonal utility comparisons. This means – in less technical language – you cannot say what you like is “better” than what I like.
To illustrate, I once had a colleague (a fellow economist – who I think should have known better) who insisted that classical music (or maybe it was jazz) was “better” than country music or R&B (both of which I like to listen to). He argued that his favorite music was more complex than my favorite music. My response: “Why is more complex better than simple?”
In the end, I don’t think one can argue that one person’s taste is better than another. But I do think there are people who truly believe their taste in movies, literature, music, food, etc… is simply superior to other people’s taste. In the end, I am asking “how do we know that?”
Let me close with one more response to this post that did not appear in the comments at Freakonomics.
Rod Fort, a sports economist at the University of Michigan, offered the following via Twitter:
Berri just argues that Oscars should be an All-Star Game (fan chosen) but never why this is “better” and for whom is it better?
If we read through the entire post at Freakonomics I make the following argument towards the end:
- …should we simply award the “best picture” to the highest grossing film? Such an approach might be pleasing to an economist. But if we took that approach, something would be lost. As noted, because a player’s impact on revenue is still debatable, we can still debate the identity of the “best” player (from the customer’s perspective). But to the millions who spend time watching and debating the Oscars, the economist’s approach is probably less than appealing. If we look at just revenue, the identity of the “best” picture is not debatable. And consequently, the revenue generated by all the discussion the Oscars generate — and this goes beyond the event on Sunday to all the revenue generated by the media the past few weeks — would be lost. After all, if we are simply going to say the “best” is the film with the most revenue, would there be many people who would want to spend time watching the Oscars? Since the debate itself generates value, we should be hesitant to just look at the numbers (an observation that explains some people’s hostility to measuring player productivity in sports).
So at the end I argue that looking at just revenue might not be the “best” way to answer this question. All I am trying to say is there are two possible opinions we could consult with respect to motion pictures and I am not sure the Academy should be the only voice we care to hear.
That suggests that Rod might not have gotten to the end of the post before tweeting.
Rod, though, may not be alone. The post also talks about the NBA. I don’t see too many comments on this part of the post at Freakonomics. So perhaps most people just read the first few paragraphs and concluded they were getting the essential story I was telling. Or maybe they concluded the NBA stuff wasn’t worth noting.
Or maybe they thought the NBA stuff wasn’t that “good”. Of course, who says their taste is better than mine?