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Of Subtitles and Signals

2/27/2014 --

New research by U-M Ross Professor Michael Jensen and PhD student Heeyon Kim shows foreign films need the right mix of market signals and distributors.

ANN ARBOR, Mich. — Foreign films are often a tough sell, as they are cultural products subject to a lot of uncertainty. You don't really know what you're going to get until you see it.

Audiences use market signals to help them guess if they would like a foreign movies. Two big signals are commercial success in the home country and grades from the big film festivals in Cannes, Venice and Berlin.

New research by U-M Ross Professor Michael Jensen and PhD student Heeyon Kim shows how those signals are interpreted differently by different types of movie-goers, and it depends on who is communicating what.

Their work can help distributors of foreign films make better marketing decisions and shines new light on ways people interpret those signals. Their paper, "Audience Heterogeneity and the Effectiveness of Market Signals: How to Overcome Liabilities of Foreignness in Film Exports?", is set to be published in a forthcoming edition of the Academy of Management Journal.

"Audiences matter, particularly in an international context where there are cultural differences across countries," says Jensen, associate professor of strategy and an expert on social structures in markets. "Most of the research focuses on producers and the market signals they send. There's not as much about how the signals are received and processed by the audience."

Jensen and Kim studied a large sample of movies made in various European countries between 2004 and 2009, how they were marketed in other countries, and their box office performance. The goal was to find out not only when market signals are important, but also what types are the most effective with which audiences.

Previous work focused on signals sent by producers and largely assumed audiences to be pretty much alike, or homogeneous. Jensen and Kim, however, looked harder at the how audiences reacted to which messages and came away with a more nuanced view.

They showed that audiences for foreign films — and for cultural products in general — are heterogeneous and react differently to different marketing ploys.

In the case of foreign films, they found that people interpret messages differently from different types of distributors. If a major studio — one normally associated with mainstream films — distributes a foreign film, the movie doesn't benefit at all by touting film festival jury accolades. It's better off telling people how popular it was in its home market.

"A foreign movie has to match up its signals with the type of distribution it has," says Jensen. "A foreign film that touts great reviews from the juries at Cannes or Venice doesn't get any extra benefit if it's being distributed by a major studio. It goes to show different audiences expect different things."

A movie handled by a smaller, independent distributor should indeed tout festival jury awards, because that plays well with that section of the movie audience.

"A foreign film with a lot of critical acclaim, especially from the major festivals, is better off with an independent or smaller distributor," he says.

Their study is the first to examine the multi-stage nature of film exports and explain the role of distributors as intermediaries.

Read the paper.

— Terry Kosdrosky



For more information, contact:
Terry Kosdrosky, (734) 936-2502, terrykos@umich.edu