Drunkard's Walk - Leonard Mlodinow [7]
Given the fact that green light decisions are made years before a film is completed and films are subject to many unpredictable factors that arise during those years of production and marketing, not to mention the inscrutable tastes of the audience, Goldman’s theory doesn’t seem at all far-fetched. (It is also one that is supported by much recent economic research.)10 Despite all this, studio executives are not judged by the bread-and-butter management skills that are as essential to the head of the United States Steel Corporation as they are to the head of Paramount Pictures. Instead, they are judged by their ability to pick hits. If Goldman is right, that ability is mere illusion, and in spite of his or her swagger no executive is worth that $25 million contract.
Deciding just how much of an outcome is due to skill and how much to luck is not a no-brainer. Random events often come like the raisins in a box of cereal—in groups, streaks, and clusters. And although Fortune is fair in potentialities, she is not fair in outcomes. That means that if each of 10 Hollywood executives tosses 10 coins, although each has an equal chance of being the winner or the loser, in the end there will be winners and losers. In this example, the chances are 2 out of 3 that at least 1 of the executives will score 8 or more heads or tails.
Imagine that George Lucas makes a new Star Wars film and in one test market decides to perform a crazy experiment. He releases the identical film under two titles: Star Wars: Episode A and Star Wars: Episode B. Each film has its own marketing campaign and distribution schedule, with the corresponding details identical except that the trailers and ads for one film say Episode A and those for the other, Episode B. Now we make a contest out of it. Which film will be more popular? Say we look at the first 20,000 moviegoers and record the film they choose to see (ignoring those die-hard fans who will go to both and then insist there were subtle but meaningful differences between the two). Since the films and their marketing campaigns are identical, we can mathematically model the game this way: Imagine lining up all the viewers in a row and flipping a coin for each viewer in turn. If the coin lands heads up, he or she sees Episode A; if the coin lands tails up, it’s Episode B. Because the coin has an equal chance of coming up either way, you might think that in this experimental box office war each film should be in the lead about half the time. But the mathematics of randomness says otherwise: the most probable number of changes in the lead is 0, and it is 88 times more probable that one of the two films will lead through all 20,000 customers than it is that, say, the lead continuously seesaws.11 The lesson is not that there is no difference between films but that some films will do better than others even if all the films are identical.
Such issues are not discussed in corporate boardrooms, in Hollywood, or elsewhere, and so the typical patterns of randomness—apparent hot or cold streaks or the bunching of data into clusters—are routinely misinterpreted and, worse, acted on as if they represented a new trend.
One of the most high profile examples of anointment and regicide in modern Hollywood was the case of Sherry Lansing, who ran Paramount with great success for many years.12 Under Lansing, Paramount won Best Picture awards for Forrest