Internet Week
20th Century-Fox may rake in huge profits from sci-fi blockbusters like "Star Wars: Episode 1," but until recently its box-office reporting techniques were about as advanced as the special effects in the studio's 1958 classic "The Fly."
To bring its data-collection practices into the Internet age, Fox is constructing an intranet to track the millions of records associated with box-office receipts. The payoff is real-time data analysis that lets the studio spot regional and competitive trends and act quickly enough to exploit them.
"This application allows us to manage our business more intelligently by giving us actual information on what's happening in the theaters, whereas before, we relied on intuition and gut feel," said Justin Yaros, CIO and senior vice president at Fox.
The intranet, which took nine months to develop at a cost of $1 million, gets information about 18,000 theaters nationwide through a clearinghouse.
Prior to the intranet, information about box-office returns was manually extracted from each data source and reentered by hand in an Oracle database to create reports.
"Our executives and branch managers would call me or another person in IT, and we had to query box-office returns at different theaters one at a time. Now, we are able to put the information at their fingertips so they can manipulate it to their needs," said Tom Roach, vice president of domestic theatrical IT at Fox.
Experts said the studio is one of the first to track box-office returns in an automated fashion.
"This kind of aggregation of internal and external information to make executive decisions affecting the business is a good idea and, if anything, it moves the movie industry out of 1900s technology," said analyst Joe Butt of Forrester Research. Fox's application sets the stage for future electronic film delivery systems that can match supply and demand on a daily basis, Butt said.
For now, instant data analysis could translate into big savings. For one thing, films could be selectively extended in markets or individual theaters where they are doing well. Or, conversely, films could be pulled from theaters where they are slumping to cut losses. Fox officials also can instantly measure the impact of promotional dollars spent on new films and adjust their campaigns accordingly.
Savings could amount to $6 million in the intranet's first year of operation, during which Fox will release as many as 28 films, Roach said.
Apart from collecting the data, the greater challenge was feeding information to executives and branch managers in a format that would permit greater flexibility for analysis. It's the difference between packaged reports that anticipate trends users may want to analyze and tools that let the same users create any report they want.
Compounding the challenge, Fox did not believe it had the internal IT skills-or the time-to handle the job. So it turned to USWeb/CKS, a consulting firm that specializes in Web applications.
"It would have taken us years to develop this application internally because our talent is limited, whereas USWeb/CKS are experts in creating Internet applications," Roach said. The IT group at Fox has 200 people and an annual budget of $30 million.
The information about box-office returns is gathered from three sources: Entertainment Data Inc., a clearinghouse that feeds mainframe-based information to Fox and other competing film companies; an internal Fox transactional distribution system that runs on Microsoft SQL Server and handles box-office information, including overall revenue mapped to revenue sources; and Excel spreadsheets that track advertising spending.
All this information needed to be consolidated into a common data format and fed into the Oracle databases for analysis, said Abe Wong, a consultant at USWeb/CKS.
The Oracle database runs on HP-UX and is the primary repository for 43 million records on distribution information about Fox and its competitors. A Web-based analytical tool from Microstrategies, running on Windows NT, lets Fox's 32 branch managers create canned and customized reports in HTML.
The competitive information collected on Entertainment Data's mainframe is reformatted for Oracle by Informatica, a third-party application running on NT. The reports also are shared with local theater owners so they can see how movies running at their theaters are faring against others.
The box-office application went live in April. An application that links ad dollars directly to theater receipts in 150 geographical areas will be ready by the end of the month.
"It'll basically tell us how much revenue we make as compared to advertising we spent over different media in specific geographical markets," Roach said. "Our media group is now able to make intelligent decisions on Mondays because we now have box-office information about our movies and that of the competition on a daily basis."
**Reprinted from Internet Week, August 9, 1999