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HOLLYWOOD ENDING

Why bad data make bad movies

Hollywood-movie-data
Reuters/Mike Blake
They can't all be winners.
  • Allison Schrager
By Allison Schrager

Reporter

Published This article is more than 2 years old.

This article is based on a chapter from An Economist Walks into a Brothel, a new book from Quartz economics reporter Allison Schrager.

Hollywood is often called the land of broken dreams. Every day young, talented people come to Hollywood hoping to make it big, only to leave with bitterness and regret. Hollywood could also be called the land of broken risk models. Investors, including banks, hedge funds, and insurance companies, have a long history of coming to Hollywood thinking they can tame the market with science and data. Those dreams also can end in tears—and lawsuits.

A recent casualty is Ryan Kavanaugh, a Los Angeles native who charmed Hollywood with talk of his Monte Carlo simulation—an economic forecasting technique—that lived in an elaborate Excel spreadsheet and promised to make the unpredictable predictable. He claimed his model could forecast which movies would do well and which ones would bomb. It was a seductive pitch.

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