Priceonomics

Credit: “Siskel & Ebert At the Movies,” Disney-ABC Domestic Television.

This author remembers the first time he discovered Tyler Perry.

The year was 2005, and the author worked as an assistant at a Hollywood talent agency. The building was spectacular, the suits were sharp, and movie stars graced the halls. Agents hammered out multimillion-dollar deals with studio execs in corner offices. Everything smelled of money, power, and $2000 shoes.

Being an assistant was considerably less glamorous. It involved answering two dozen phone calls a minute, shuffling nonfat soy lattes into meetings, dodging flying office supplies, and swerving through traffic to get scripts to studios. A typical workday started at 7, ended around 9, and paid eight bucks an hour.

But of all the trials the job demanded, one was particularly onerous: the weekend box office report. Every other Saturday, the author dragged himself into the building before 6am. There, he awaited a top-secret fax (yes, a fax) with a dump of raw data: box office reports for all the major movies released that Friday. Through a haze of hangover and sleep deprivation, he put those numbers into a spreadsheet. Then he picked up the phone, connected to voicemail, affected his best Tom Brokaw voice, and recorded the report as an outgoing message to the entire company and its A-list clients. There was no room for error. It was like living a really bad James Bond movie.

Harrowing as the experience was, it was educational. In sorting through the numbers, one gained an appreciation for the business of filmmaking. Ninety percent of the time, which movies cracked the top ten was predictable. But on any given Saturday, a surprise could pop up on the charts.

One of the biggest surprises crinkled its way through the fax machine on the morning of February 26, 2005. Diary of a Mad Black Woman, a film by an obscure director named Tyler Perry, opened at #1 that weekend. It beat out Million Dollar Baby, Hitch, The Aviator, Sideways, and other recognizable titles. 

Most critics savaged Diary. Even today, it holds a score of 15% on aggregated-review site Rotten Tomatoes - despite an audience rating of 88%. Roger Ebert’s review was typical:

“Grandma Madea, who is built along the lines of a linebacker, is a tall, lantern-jawed, smooth-skinned, balloon-breasted gargoyle with a bad wig, who likes to wave a loaded gun and shoot test rounds into the ceiling. This person is not remotely plausible; her dialogue is so offensively vulgar that it's impossible to believe that the intelligent, sweet, soft-spoken Helen doesn't seem to notice.”

That “tall, lantern-jawed, balloon-breasted” woman, however “remotely plausible,” made Tyler Perry a star. Over the next decade, he continued to churn out hits in the Madea franchise. He also branched out into higher-brow fare, such as his adaptation of the Tony-nominated play For Colored Girls Who Have Considered Suicide When the Rainbow is Enuf. Today Forbes ranks Tyler Perry the 12th most powerful celebrity in the world, with an annual income exceeding $70 million and a prolific output in film and television projects. 

But for all his box office gold, Perry can’t seem to please the press. He’s a paradox of sorts: adored by a sizable fan base, but loathed by those whose opinions are supposed to count for a lot: major movie critics, the ostensible “influencers” of pop culture. 

A sampling from the first six years of Perry’s filmography reveals a stark contrast between popular appeal and critical reception. Here we see data from Rotten Tomatoes showing Perry’s “Critics’ Score” (aggregated from reviews in mainstream publications) and “Audience Score” (aggregated from reviews and ratings by thousands of Rotten Tomatoes users).

Perry’s median Audience Score is 80%. His median Critics’ Score is 30%. The median differential is 40%. That differential has not narrowed as Perry has gained commercial success and mainstream recognition. In fact, there doesn’t appear to be any statistical relationship between Critics Scores and Audience Scores in the Tyler Perry filmography. It’s as if a Tyler Perry film gets screened on two different planets: one with a population of 100 critics, and the other with a population of 100,000 reviewers.

Perry’s films play to predominantly African-American audiences. Most of the critics writing for mainstream American magazines, newspapers, and review sites are white. On at least some level, these cultural differences account for the stark differential between Tyler Perry’s Audience Scores and Critics’ Scores. Perry isn’t making films for the likes of Roger Ebert, and Ebert isn’t accustomed to seeing films like Tyler Perry’s.

But race and culture don’t fully explain the Tyler Perry Paradox. Other prominent and successful African-American filmmakers have done just fine by Ebert and his contemporaries. Spike Lee, for example, is a polarizing figure to some degree – but his Rotten Tomatoes differential tells a very different story from Perry’s.

Furthermore, Tyler Perry is not a stand-in for all African-American filmmakers. He is just one filmmaker of many. His audiences are not the set of all African-American moviegoing audiences; they are a subset. Perhaps they are even a very unique subset. Let’s call that subset Tyler Perry Fans. 

The difference of opinions between Tyler Perry Critics and Tyler Perry Fans is best explained by the dynamics of niche cultures. Perry makes an idiosyncratic type of movie, and in the context of Tyler Perry Fans, he makes that type to near perfection. In fact, he has made so many of these films, and he’s done so well at it, that he’s essentially a genre of his own. With a total box office take of over $557 million to date, he’s a household name and a box office titan. The Tyler Perry genre – no matter which races, backgrounds or creeds it appeals to – appeals to a lot of people. It’s huge business. It matters.

Niches like Tyler Perry Fans exist throughout the moviegoing landscape. There are broad niches (science fiction; soap opera) and narrow niches (“hard” science fiction; Korean soap opera). There are genre-based niches (romantic comedy) and taste-based niches (“Cerebral Independent Comedy,” an algorithmically derived taste profile from the author’s Netflix account). 

Perry succeeded by identifying an underserved niche, recognizing its buying power, and meeting its needs on a consistent basis. He built a niche audience into a commercially significant constituency, and in so doing, he’s legitimized his niche. Other niches have risen to significance through similar circumstances.

Critics disrespect many of these niches they same way they do Tyler Perry Fans. In fact, the mathematical differential we saw in Tyler Perry’s case plays out almost identically across many categories of film – categories that, like Perry’s, carry significant cultural and commercial cachet. These categories are blind spots for many of today’s biggest critics. Critics who wish to remain relevant in the niche-powered future need to take a closer look. 

The Critic’s Dilemma

Is it art, or is it trash? Is it entertaining, or is it a complete waste of time? And what gives a critic the right to make those calls? Even the most prominent reviewers in the business are uneasy with the idea of being justices in pop culture’s Supreme Court.

Consider A.O. Scott, the chief film critic for the New York Times, and easily one of the most prominent movie journalists of our day. Even he admits that “...the idea of critical authority has always struck me as slippery, even chimerical. Authority over whom? Power to do what?”

Scott, like many of his peers, considers Pauline Kael (film critic for The New Yorker from 1968-91) to have been the most influential critic of all time. Kael enjoyed a tenure longer than almost any print reviewer in the 20th century. In her prime, The New Yorker was considered the highest authority in the country for serious movie reviews. She counted among her readership the cream of American intellectuals and high society.

On the other side of the spectrum, critics like Roger Ebert and Gene Siskel spoke to the common man. Their words didn’t echo through the halls of ivory towers. But they reached a massive readership (and TV viewership), and their two thumbs could make or break a movie’s chances at the box office.

Engaging movie fans – be they highbrow, lowbrow, or somewhere in between – means serving in two capacities: as speaker for one’s audience, and as speaker to that audience. It means seeing movies through the eyes of one’s readership, but at the same time, assuming a sort of unique qualification among that readership. An influential critic is both the host of, and a guest at, a great cocktail party (or perhaps, in the case of Siskel & Ebert, a rockin’ tailgate).

Speaking for and to an audience is easy when the critic and the audience share the same tastes, run in the same cultural circles, and come from the same backgrounds. In the heyday of print and TV journalism, critic/audience fit was a relatively simple equation. Readers opted into the papers, magazines, or broadcast shows of their choice. If they were moviegoers, they listened to Ebert. If they were cinéastes, they listened to Kael. They might have had a few other choices (perhaps the local papers), but not much more than that. The marginal cost of movie attendance was high – there was no Netflix or video-on-demand (VOD) – so people weighed the critics’ picks carefully before making decisions.

The movie studios, in turn, used the critics as sounding boards and public relations channels. As media channels were far more concentrated than they are today, studios could reach big audiences through a handful of reviewers.

But technologies like Netflix, streaming video, file sharing, and iTunes have leveled the costs of importing and distributing content to anywhere around the world. They’ve reduced the marginal costs of discovering and consuming content to nearly zero. And they’ve allowed niche audiences – limited in buyer power or cultural influence in the age of media concentration – to branch out, expand their influence, and create market demand for genres and subgenres previously deemed so small as to be unprofitable.

The Problem With Mainstream

Netflix believes this author would fail a drug test.

Or at least that’s what its taste-matching algorithm implies. Interest in such films as The Big Lebowski, Grandma’s Boy and Dude, Where’s My Car? has given Netflix more than enough information to tip off the Feds and any future employers. 

A typical search results page resembles this one:

After watching these titles, many members consume Funyuns and Chex Mix. Image taken from Netflix.

In this case, Netflix hints that “many members” streamed these titles after watching (or searching for) any of them. These movies consistently correlate as a cluster in Netflix’s database. That cluster is a niche that’s occasionally described as the “Stoner Comedy” genre.

Here’s how some of the movies in that results page, as well as some of the most frequently streamed movies in the Stoner Comedy genre, stack up with critics and audiences:

These nine films follow an almost identical pattern to the one we observed in the nine Tyler Perry films we analyzed earlier. The median Audience Score for these titles is 79%, and the median Critics’ Score is 35%. The median differential is 41%. Tyler Perry’s titles had an 80% Audience Score, a 30% Critics’ Score, and a 40% median differential.

Stoner Comedy is an interesting genre to study because it’s based on a subculture. Unlike, say, Tyler Perry’s work, many of the films on the Stoner list didn’t set the box office ablaze. Some of them, like Grandma’s Boy, were flops in wide release that found second lives on services like Netflix and iTunes, gaining traction from matching algorithms or word of mouth.

Others, like The Big Lebowski, were fairly well received upon release, but grew quickly in the home video and VOD market into subcultures in and of themselves. (Lebowski Fest, an annual fan gathering that started in 2002, has toured in over 30 cities; its online forum boasts over 100,000 members.) And some films that were never intended for Stoner consumption (March of the Penguins, Planet Earth, RoboCop, etc.) have nevertheless been adopted into the subculture. 

In Stoner movie culture we see a niche that may not influence others, per se, but which can prove a powerful market for movies that don’t fit in anywhere else, or have reached saturation with their intended audiences. Critics evaluate these movies based on their ostensible merits as pieces of mainstream entertainment – but Stoner culture is, if anything, a rejection of the mainstream.

But subcultures aren’t the only niches critics misunderstand. Take the case of Nicholas Sparks, bestselling author of 18 (and counting) romance novels adored by legions of predominantly female fans. Eight of his books have been adapted into major motion pictures, and those eight films have grossed a collective total of almost $500 million in the US (a figure that does not include foreign box office, home video sales, or VOD streaming figures).

Source: Box Office Mojo.

Do critics care about Nicholas Sparks movies? Have they adapted their considerations of the category to reflect widespread audience acceptance? Not exactly. Here’s how audiences and critics have weighed in over the years:

We can add Nicholas Sparks Fans to the list of niches to whom, and for whom, critics don’t seem to be speaking. 

In the eyes of a few critics (and, perhaps, to many viewers outside the Sparks niche), these movies are formulaic, emotionally manipulative tearjerkers. But to millions of fans – the target audiences, the ones who care, the ones who pay – these movies are romantic, cathartic, rewarding experiences. 

Those fans would be better served by critics capable of judging the latest Sparks adaptation from their perspective. As for everyone outside the Sparks niche? They’re unlikely to care in the first place; they’ve opted out of the genre. So an outside critic, trashing the movies for the benefit of opted-out audiences, is probably wasting his words.

Are Critics Themselves a Niche?

Thus far, we’ve established that critics don’t seem to speak for, or matter to, certain niches. But what happens when we flip the equation, considering audience responses with respect to critics’ picks? Do critical favorites impact audience reception? Is a critical darling necessarily an audience favorite?

There’s an old joke that American critics will love any movie you put in front of them, so long as it’s French. True to form, a 2012 editorial in the New York Times, “French Film in Its Year of Triumph,” raved about a crop of seven movies released as part of that year’s “Rendez-Vous With French Cinema” series. 

We should note that these weren’t snobby art house films. These were mainstream French movies, intended for mass audiences, and about which even the Times conceded that “entertainment matters more than art.” (Intouchables, one of the French films reviewed, is the second-highest-grossing domestic movie of all time in France, with a French box office take of over $240 million.)

Were American audiences entertained as predicted?

With the exception of Intouchables, which American audiences actually liked more than critics did, most of the films exhibited a significant gap. The median Critics’ Score for these films was 76%, the median Audience Score was 57%, and the median Critics/Audience gap was 26%. This is not as dramatic a gap as we’ve seen with previous niches, but it is significant. It implies that French cinema – with all due respect to the author’s high school French teacher and at least two ex-girlfriends – is overrated.

The Riches of Niches

For most of movie and TV history, small niches were commercially risky propositions for studios and distributors. International content, for example, was once hard to come by because localization was expensive, and the addressable markets seemed tiny. Physical distance between viewers often kept some niches geographically constrained. And few big companies were willing to take commercial risks on content with no proven track record or audience size. Micro-independent filmmakers and distributors had to fill the gaps. But their reach was still small, and their access to distribution channels (such as theater chains and TV syndication) was almost nonexistent. 

Consider the example of Czech cinema. Miloš Forman is probably the most recognizable filmmaker in this category to American audiences. Still, the author suspects few American readers will be able to name more than two of his movies (if that many). Almost no Americans know the movies he made before coming to Hollywood. But outside of the United States, Czech New Wave cinema is often considered one of the most influential film movements of the 1960s. Forman and his contemporaries won multiple Academy Awards for Best Foreign Film, but few of those movies were imported or distributed in significant quantity to the United States. 

They would have been positioned as arthouse fare, presumably subtitled, and referenced cultural norms (like critiques of life under Communism) with which American audiences were unfamiliar. Rather than import Forman’s work, Hollywood chose to import Forman – bringing him over to direct studio productions like One Flew Over the Cuckoo’s Nest and Amadeus.

Few mainstream critics got their hands on niche material, such as Forman’s early work, because the typical distribution channels to critics – involving studios sending “screener” copies of new releases to publications – were controlled by the big players, and depended on economies of scale to support.

But today’s technology has eased many of these constraints and erased some of them altogether. Access to previously unreachable or hard-to-come-by content can grow the size of a niche exponentially. Consider some recent examples:

- Consumer research firm NPD estimates that the success of Pokemon in the United States is responsible for over 60% of anime-related goods sold at retail, currently a $2.42 billion market. 

- The runaway success of Psy’s “Gangnam Style” has made Korean pop music (“K-Pop”) a recognizable phenomenon in the US and an unlikely commercial smash in Latin America

- British sci-fi series Dr. Who has been a hit in Great Britain since it first aired in 1963. But in all the ensuing years, it never rose above the status of minor cult curiosity in the US. In 2009, with exposure to new audiences on Netflix, the show started breaking viewership records for BBC America. It continues to do so year over year.

- Documentaries accounted for about 2% of all movies released in the US in 2000; by 2011 they accounted for 18%. The low barriers to financing and filming a documentary, combined with the dramatically lowered barriers to distributing documentaries online, have resulted in a growing library of films catering to a growing niche audience.

On-demand streaming has broken down international content borders, reduced importation costs, and allowed audiences to “opt into” niches by way of their taste profiles. (As we rate the movies we’ve seen, we leave behind data for the movie stores and streaming providers that helps them feed us more of what we like.) This trend seems unlikely to abate, barring major restrictions on importing and exporting content, or “content wars” between major VOD providers.

With barriers to access low, and with more niches breaking into the mainstream every year, it’s a safe bet we’ll see more Tyler Perrys in the near future.

The success of Tyler Perry films, or of low-budget slashers, or of Nicholas Sparks tearjerkers, suggests that a one-size-fits-all approach isn’t necessary to justify the costs of producing, marketing, and distributing a major motion picture. The latest Madea movie may not reach more than a small percentage of the total US market – but if it gets 100% of Tyler Perry Fans out the door and into the theaters, it could do just as well as a title that shoots straight down the middle.

Niches are fairly easy to market to, thanks to concentration in online forums, conventions, browser cookies, purchase histories, and other retargeting mechanisms. The relative simplicity of reaching and engaging a niche audience helps defray the risks associated with marketing a new property. Conversely, for a mainstream film, a studio will need to blast all channels and airwaves with expensive, shotgun-style advertising.

Studios, both independent and major, have begun to take notice and to adapt their strategies accordingly. Comic-Con, once a geeky gathering on the fringes of popular culture, is now a must-stop tour for major movie studios looking to showcase their upcoming titles.

But critics are struggling to keep up. By and large, they’re still writing reviews for a presumed audience like themselves: an audience that believes in a universally applicable grammar, style, and tone of cinema. 

To an extent, universal rules still apply. There is still a right way and a wrong way to shoot a conversation between two characters. There is still a generally acceptable runtime to which most audiences have grown accustomed. And there is still a roughly three-act narrative structure to which films adhere, tracing its lineage as far back as Aristotle. Some of these elements haven’t changed in decades, and some of them haven’t changed in thousands of years. Many of them won’t change for decades (or millennia) more.

But for more basic considerations – what’s funny, what’s sexy, what’s cool, what’s touching, what’s relatable, what’s thrilling – there are no absolutes. Here critics descend into the messier territory of relative values, the strength of which rely on the size of the audience who shares them. Lowered costs of content discovery and consumption, exposure to new ideas and new forms, and connection to new people en masse, will constantly shift the boundaries of these audiences.

In this crazy new world – a world inhabited by taste profiles as specific and adjective-laden as “Violent, Thought-Provoking, Foreign Action & Adventure Movies” (a subcategory suggested to the author by Netflix) – the idea of one person who speaks for everyone is untenable. Even the idea of aggregated reviews, such as those found on Rotten Tomatoes and MetaCritic, will only go so far. So long as those reviews are aggregated from critics not writing for that niche, the aggregate score will be relatively useless.

The Long View

It’s tempting to think that critics are a dying breed, and that whatever influence they once had is fading away. But that’s probably not the case. In fact, the opposite may be true. Critics will still matter, but the lines between critics and consumers will blur. The old critics will fade from the scene, but new systems will fill the void.

Today we have more options than ever before. There are over 45,000 for-purchase movies and 85,000 TV episodes on iTunes. There are over 52,000 movies on Amazon’s VOD service. And for $8 a month, a Netflix streaming subscriber can access 60,000 titles at will. 

That’s a lot of choice. As consumers, we won’t have time or energy to sample it all. It’s an embarrassment of riches. If anything, we could end up more dependent on guides to help us sort through the ever-growing crop.

Increasingly we may turn to niche critics: subject-matter experts, or even friends and peers, whose tastes match our own. (Although some of us may just sit back and let the algorithms do the thinking for us.)

This author believes the most influential critics of the digital era will be those who’ve watched the most content, who’ve rated the most movies, whose ratings overlap with the largest cohorts, and who can leverage (or create) platforms by which to reach those cohorts. The dividing lines of genre will give way to taste-based networks. The critical soapbox will yield to emergent tastemakers within those networks. There won’t be a Roger Ebert for half the world and a Pauline Kael for the other. Instead, each genre and every niche could have both. Or many.

As the old saying goes, everyone’s a critic. That’s not necessarily a bad thing.

This post was written by contributor Jon Nathanson. Follow him on Twitter here. To get occasional notifications when we write blog posts, sign up for our email list.


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