Matthew Marolda

Supported by Greenhaven Road Capital, finding value off the beaten path.

Thomas Tull thought that Legendary Films could be better after he saw newspapers advertising The Hangover. Is this really how we should market this? Tull thought.

As a sports fan who saw sabermetric’s ascent, he looked for an analytics group he could hire (buy) and found one started by Matthew Marolda who recalled meeting Tull on his jet and getting this pitch:

“‘Legendary is a benevolent dictatorship’ and that helps, having the guy at the top be like, ‘this is what we’re doing, get on board.'”

Listen to analysts in the game and you’ll hear how often this isn’t the case. With support, Marolda built up an analytics staff quite a bit larger than their Hollywood peers, at least at first. Marolda used to joke that his group was about sixty people, which was fifty-nine more than their nearest competitor.

Another thing that contributed to Legendary’s success was separating analytics from creative. This distance “ensures objectivity,” Marolda said in 2016.

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Distance had its drawbacks. They reinvented the wheel, Marolda said, but they also came across new ideas and weren’t unnecessarily influenced by others. Malcolm Gladwell has wondered for years why basketball teams don’t do something like this.

Bill Simmons noted that they kind of do.

Maroldo wanted to figure out how conditions matter. What was the Hollywood equivalent to when baseball hitters were shown heat maps or coaches told about 3-point offense and defense? In what ways did talent fit well and how could data help market movies?

The talent advantage has been nebulous, at least as far as public information goes. The Great Wall likely barely broken even despite starring Matt Damon, an A-List actor who indexes especially well in China.

Legendary has had much more success in marketing movies. They remind people who are in the tent that movies are coming out and they ignore people like Marolda’s mom who’s never seen a Legendary movie. Which kind of makes sense when you see their list of movies.

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Movie marketing is similar to sports sabermetrics. The traditional way was fine until new metrics, tools, and technology led to better outcomes. Traditional movie marketing looks like this:

  • 70% on television
  • 10% on digital
  • 10% on outdoor and print
  • 10% on fees.

However, for Krampus, Legendary flipped the marketing model and spent six times the normal amount on digital and one-third on television. Speaking generally Marolda said:

“It wasn’t to say that TV advertising was bad, in fact, it’s quite effective in the right context. Rather, can you bolster it, flip the order, have targeted digital lead the charge? That’s what I think where the immediate revolution has been.”

Digital’s advantage is being able to not target Marolda’s mom. She shouldn’t know about Godzilla vs. King Kong in 2020.

Marlo Vinasco of Uber spoke about how they’re using data for targeted marketing too. “That’s the key insight for marketing. Instead of randomly targeting hundreds to catch ten (potential churning customers or drivers), I’m going to target twenty to catch five or six. It’s a much more efficient vehicle for marketing investment than before.”

That said, digital still has obstacles. When asked in 2016 if Legendary might go totally digital Marolda balked.

“We’re not opposed to going 100% digital, we’re close to doing it. But the theory is that if you do that and then it fails, then that’s an easy way to point a finger. So we’re cognizant of that.”

Career risk exists, even with data backup.

Part of the reason for career risk is the narrative around a movie. For example, Warcraft was panned by critics, enjoyed by US fanatics, and loved by Chinese viewers, outearning Star Wars for the month. Marolda said, “Our industry is very domestically centric so people were watching the US box office but they didn’t really have their eye on what we were really thinking about, which was China.”

Without the inside story, commentators criticize baseball teams, tennis players, or Michigan brewers. Mike Reiss put it this way:

“At the end of season 4 (of The Simpsons), I left to take my Christmas break. I picked up a year-end magazine that declared ‘the writing on The Simpsons has gone downhill.’ That critique ruined my holiday. I obsessed about what I could have been doing wrong. Twenty years later, that same magazine declared season 4, ‘the greatest season of the greatest show in history.’ Thanks.”

Without the insider’s reasons, we get outsider’s guesses. Warcraft worked for a number of reasons, one of which was the data. Marolda said, “because of our relationship with companies like Tencent and Baidu who actually sell tickets, we’re able to close loops in ways we can’t anywhere else.”

They targeted marketing and it worked.

Movies are an interesting business. Some things have changed, but others haven’t. For marketers who better target customers, it’s a fuller theater. We’ll give the last word to Robert McKee, “For writers who can tell a quality story, it’s a seller’s market—always has been, always will be.”

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