Studio executives carefully examine how a film performs on its opening

Question

Studio executives carefully examine how a film performs on its opening weekend in order to determine whether – and how – to invest more in that film.

Many decisions are best made after reaction can be gathered from audience who actually purchased tickets.

Therefore, to maximize returns on their marketing investments,
studios should initially release all their films on a small number of screens and with a limited advertising campaign.

The plan to maximize returns by initially releasing films on only a small number of screens and limiting advertising depends on which of the following assumptions?

(A) Large marketing investments made before the opening weekend never eventually yield greater profits than small initial marketing investments.

(B) New advertising technique such as web-based viral marketing, haven’t substantially reduced the average marketing cost for films.

(C) A film’s prior performance in noncommercial settings, such as festivals, is not well correlated with how the general public tends to react to than film.

(D) Across the movie industry, marketing investments do not influence the eventual financial returns of films in predictable way.

(E) How a film performs during its opening weekend is a strong indicator of the film’s financial performance over its lifetime.

CrackverbalGMAT · Accepted Answer

Hello Shriti,
A quick tip regarding CR questions.
When it concerns questions that require understanding the assumptions of an argument (Weaken, Strengthen, Assumption) the correct response CAN use words such as "Never", "none", "Most" or "only".

Remember an assumption CAN be an Extreme - exclusionary perspective. NEVER eliminate an option in an assumption based question just because it uses the extreme words.

There is One question type though where you SHOULD watch out with options with extreme / exclusionary words.
That's the inference questions that require you to make an inference based on the data provided. Here option with extreme words are generally wrong!

Hope that clarifies things

Ajeeth Peo
Verbal Trainer - CrackVerbal

Hope that clarifies things Ajeeth Peo Verbal Trainer - CrackVerbal

Nevernevergiveup · Answer

Studio executives carefully examine how a film performs on its opening weekend in order to determine whether – and how – to invest more in that film. Many decisions, such as increasing the number of screens that show the film and expanding the marketing campaign, are best made after reaction can be gathered from audience who actually purchased tickets. Therefore, to maximize returns on their marketing investments, studios should initially release all their films on a small number of screens and with a limited advertising campaign.

Opening weekend plays an important role in determining about future investments made in that film.
Why should studios release all the films on a small no. of screens and with limited ad campaigns?

So that they can avoid any loss.

The plan to maximize returns by initially releasing films on only a small number of screens and limiting advertising depends on which of the following assumptions?

A. Large marketing investments made before the opening weekend never eventually yield greater profits than small initial marketing investments.
Negated st. : Large marketing investments made before the opening weekend eventually yield greater profits than small initial marketing investments.

Then the studios should invest its money rather than waiting for the reactions and all........This hurts the conclusion. Keep it.
B. New advertising technique such as web-based viral marketing, haven’t substantially reduced the average marketing cost for films.
Out of scope.

C. A film’s prior performance in noncommercial settings, such as festivals, is not well correlated with how the general public tends to react to than film.
Out of scope.

D. Across the movie industry, marketing investments do not influence the eventual financial returns of films in predictable way.
But it does not really answers the question.........
Across the industry.....? Out of scope. We are just talking about this particular case.

E. How a film performs during its opening weekend is a strong indicator of the film’s financial performance over its lifetime.
Negated st. :How a film performs during its opening weekend is not a strong indicator of the film’s financial performance over its lifetime.

Financial performance over its LIFETIME?? This kind of supports the conclusion. So the decision to release on small screens and all is correct.
Incorrect.

A it is.

but here is an explanation from MGMAT below which clears the air.

conty911 · Answer

I will go with E. ohh close but good one missed on this completely, The answer will be A. A) Large marketing investments made before the opening weekend never eventually yield greater profits than small initial marketing investments.- -this is too strong a statement, if this assumption were to be correct then there would be no point in marketing. Although it, is strong but it defends the argument.I am at a loss here. B) New advertising technique such as web-based viral marketing, haven’t substantially reduced the average marketing cost for films. --- it just talks about a type of marketing, no relation what so ever with conclusion. C) A film’s prior performance in noncommercial settings, such as festivals, is not well correlated with how the general public tends to react to than film.-irrelevant D) Across the movie industry, marketing investments do not influence the eventual financial returns of films in predictable way.--This option does not fits in since the argument is about whether to spend in pre-marketing or post-marketing. E) How a film performs during its opening weekend is a strong indicator of the film’s financial performance over its lifetime.-- This seems plausible, fills in the gap that the first weekend is a sure indicator for further investments. Avantika seems right on this one .Completely missed

Avantika5 · Answer

Ans: A.
Also, E is explaining the first statement of the question and not providing with any assumption.

Carcass · Answer

Official Explanation:

The correct answer choice eliminates an ALTERNATE PATH TO THE SAME END.

According to the argument, all films should be released conservatively, in order to obtain the greatest return on marketing investments. The rationale given is that audience reactions can only be properly gathered and interpreted after the opening weekend; these reactions then serve as the basis for marketing decisions such as expanding the films release. However, the argument ignores other possible means to achieve the stated goal of maximum returns on marketing investments. Specifically, the argument overlooks the impact of marketing decisions that are made before opening weekend, such as the initial number of screens or the initial size of the advertising campaign; such decisions could influence the results of the opening weekend. In fact, investing a great deal in marketing before a film opens might be the best way to generate profits, as in the case of blockbusters or of films predicted to collapse after the opening weekend. Note that several of the incorrect answers reinforce a conservative attitude toward releasing a film, but none of them are critical to the validity of the conclusion, and thus none are assumptions upon which the conclusion depends.

(A) CORRECT. In order to conclude that all films should have limited releases, it must not be possible for large pre-release marketing spending to lead to the best returns on investment, no matter what film is considered. Also, check the LEN: large marketing investments made before the opening weekerid could eventually yield greater profits than small initial marketing investments.

The author's conclusion would fall apart if this were true.

(B) If marketing costs fell, then releasing films might be less risky. However, the conclusion here is concerned with how to maximize profits. This choice does not address whether a conservative release plan is the best method to maximize profits.

(C) This is a tempting choice. A premise in the argument says that reactions from commercial audiences are the most useful indicators in making marketing decisions. Try the LEN strategy: performance in non-commercial settings is at least somewhat correlated with how the general public tends to react. Does this destroy the conclusion? No. The non-commercial audience reactions could be decendy correlated without being the most useful type of audience
reaction.

(D) The author claims that limited releases are the best means to maximize returns on marketing investments. In other words, the author is predicting something about the expected return on a marketing investment. At the same time, the author's conclusion does not logically depend on whether marketing investments have predictable effects or not.

(E) The opening weekend's results may be a strong indicator of future performance, but that does not allow us to conclude that the given plan will always result in the best financial returns on a marketing investment. There may be other, better indicators of future performance.

JarvisR · Answer

Edited the post to refine the explanation.
Regards. 
Conclusion:
 to maximize  returns on their marketing investments, studios  should  initially release  all their films  on a small number of screens and with a limited advertising campaign.

Why?

Premise:
Many decisions, such as  increasing the number of screens that show the film and expanding the marketing campaign, are best made after reaction can be gathered  from audience who actually purchased tickets.

The plan to maximize returns by initially releasing films on only a small number of screens and limiting advertising depends on which of the following assumptions?
B and C are irrelevant.
To me A & D are close but A wins.

Argument is about when to make investment.Lets start from E and D and then we will come to A.

A) Large marketing investments made before the opening weekend never eventually yield greater profits than small initial marketing investments.
Negation:A) Large marketing investments made before the opening weekend yield greater profits than small initial marketing investments.
If that is true then it impacts the conclusion to limit the screening and initial budget.

B) New advertising technique such as web-based viral marketing, haven’t substantially reduced the average marketing cost for films.

C) A film’s prior performance in noncommercial settings, such as festivals, is not well correlated with how the general public tends to react to than film.

D) Across the movie industry, marketing investments do not influence  the eventual financial returns of films in predictable way. 
>>
 #1: We are concerned abt when to invest.This option doesn't mentions that. 
#2: Even if there is predictable behavior, does it affect conlusion. We dont know as argument doesnt mention any detail to evaluate that.
 
E) How a film performs during its opening  weekend is a strong indicator  of the film’s financial  performance over its lifetime. 
>> Marked items make the option vulnerable to doubt. Even if its not a strong indicator may be its sufficient to make the final call on investment hence argument doesn't fall.Also lifetime performance is too extreme assumption in regard to make sound investment in starting to gain max profit.

Abhishek009 · Answer

IMHHO (A)

suresh8055 · Answer

Premise1  : Studio executives carefully examine how a film performs on its opening weekend in order to determine whether – and how – to invest more in that film. 
 Premise2  :Many decisions, such as increasing the number of screens that show the film and expanding the marketing campaign, are best made after reaction ca be gathered from audience who actually purchased tickets. 
 Conclusion  :Therefore, to maximize returns on their marketing investments, studios should initially release all their films on a small number of screens and with a limited advertising campaign.

A. Large marketing investments made before the opening weekend never eventually yield greater profits than small initial marketing investments. -  Correct

B. New advertising technique such as web-based viral marketing, haven’t substantially reduced the average marketing cost for films. -   Irrelevant

C. A film’s prior performance in noncommercial settings, such as festivals, is not well correlated with how the general public tends to react to than film. -  Out of Scope

D. Across the movie industry, marketing investments do not influence the eventual financial returns of films in predictable way. -   Out of Scope

E. How a film performs during its opening weekend is a strong indicator of the film’s financial performance over its lifetime. -  Similar to one of the premise stated in the argument 
If we negate the answer choice A , it will affect the conclusinon So A is the best choice

Ekland · Answer

I really like this question. Its subtle.
E cannot be assumed because if it is assumed then the conclusion cannot hold. If the performance on the opening week is a strong indicator of lifetime financial performance, then the studio guys would ensure it premiers everywhere in the world. they can should even set up new viewing centres in every street in the town and markdown price while ensuring biggest possible viewership with blockbuster advertising... and so on...
D is a tempter! And what if it does influence? Hows does that show that you wouldnt maximize returns still by being conservative in the opening week? It does not. The assumption must link to the conclusion. 
B and C are talking nonsense.

A is the assumption because it links the premise and the conclusion. We are talking about being conservative in the opening week so as to maximize. And that assumes that we if we are "extravagant" we wouldnt even maximize more. Our move to be conservative on the opening week would be STUPID if we would actually need to be more extravagant to maximize.

Rumikido3 · Answer

Good Question! 
I was between A & E, and finally choose E. However, E is not only a partial restatement of one of the premises, but also an extreme situation (lifetime) . So A is correcT.

My analysis is below...

Argument Structure  
Conc: To   maximize R   on MK investments, release all films on few screens and with a limited Ads.
P1: Executives examine how a film performs on its opening weekend in order to determine whether – and how – to invest + in film. 
P2: Many decisions, (Increasing the number and expanding the MKT), are best made after reaction is gathered from audience who purchased tickets.

Pre-thinking
The author is trying to find the find the assumption behind the conclusion that the best way to maximize Returns on MKT investment would be to release all films and real ease them with limited Ads. Then they examine the performance on the opening weekend and decide the strategy to follow to maximize Returns.
In order to find the assumption I will falsify the conclusion:
In which scenario the release of all films on few screen and with a limited Ads won't help to maximize Returns on MK investments? Well, if you could better maximize the return deciding for a different strategy: large investment in MKT before the release. 
So the assumption would we the negation of this scenario: Large investment in MKT before the release of film won't maximize returns on MKT investments.

Answer choice analysis  
Options B, C, and D are OFS.

A) Large marketing investments made before the opening weekend never eventually yield greater profits than small initial marketing investments.  Correct!
Aligned with pre-thinking. If negated, the resulting scenario will break the conclusion apart.

E) How a film performs during its opening weekend is   a strong indicator   of the film’s financial performance   over its lifetime  .  Incorrect!
This option is a a partial restatement of P1. Also, assuming that a film performance during its opening weekend is an  strong indicator  of the film's financial performance  over its lifetime is too extreme . This unseated premise is not necessary for the conclusion to be true. The basis of the conclusion is an strategy: that studios should release all their films in a small number of screen and with limited campaign in order to maximize profits. So the assumption should be wether this strategy works. For example, perhaps they release all films in a small number of screen and with limited campaign, resulting in an bad financial performance. This outcome was probably because there was not enough time to market the film and lot of people were not aware of it it. So it doesn't mean that this result would be a strong indicator of a failure over the film's lifetime. What if they strongly market the film before the release weekend? More people would be aware, and therefore a lot of people would buy tickets.

Hope it helps!

Mahmud6 · Answer

A

By negation: If large marketing investments made before the opening weekend  SOMETIMES  eventually yield greater profits than small initial marketing investments, why should we make small initial marketing investments? Conclusion falls apart. A is correct.

Shiv2016 · Answer

Studio executives carefully examine how a film performs on its opening weekend in order to determine whether – and how – to invest more in that film.

Many decisions are best made after reaction can be gathered from audience who actually purchased tickets.

Therefore, to maximize returns on their marketing investments,
studios should initially release all their films on a small number of screens and with a limited advertising campaign.

Opening weekend plays an important role in determining about future investments made in that film.
Why should studios release all the films on a small no. of screens and with limited ad campaigns?

So that they can avoid any loss.

The plan to maximize returns by initially releasing films on only a small number of screens and limiting advertising depends on which of the following assumptions?

A. Large marketing investments made before the opening weekend never eventually yield greater profits than small initial marketing investments.
Negated st. : Large marketing investments made before the opening weekend eventually yield greater profits than small initial marketing investments.

Then the studios should invest its money rather than waiting for the reactions and all........This hurts the conclusion. Keep it.
B. New advertising technique such as web-based viral marketing, haven’t substantially reduced the average marketing cost for films.
Out of scope.

C. A film’s prior performance in noncommercial settings, such as festivals, is not well correlated with how the general public tends to react to than film.
Out of scope.

D. Across the movie industry, marketing investments do not influence the eventual financial returns of films in predictable way.
But it does not really answers the question.........
Across the industry.....? Out of scope. We are just talking about this particular case.

E. How a film performs during its opening weekend is a strong indicator of the film’s financial performance over its lifetime.
Negated st. :How a film performs during its opening weekend is not a strong indicator of the film’s financial performance over its lifetime.

Financial performance over its LIFETIME?? This kind of supports the conclusion. So the decision to release on small screens and all is correct.
Incorrect.

A it is.

Yuvaraj6030 · Answer

Option E 
In order for an assumption option to be true it should be a "must be true option". That is if you change an option and if it still works, then it isn't a correct assumption. 
Now coming to the option E.

How a film performs during its opening weekend is a  strong indicator  of the film’s financial performance over its lifetime. Now change the option to  not a strong indicator

Even if the film is not a strong indicator it can still maximise the profits. Ex : If the film performed poorly in the initial weekend, then the film producers can analyse what went wrong and what steps if taken can maximise their profits. So the option still works even after negating.

MPRS22 · Answer

The negation of A is sometimes eventually leads. This doesn't seem to make the argument collapse. Experts any idea?

Vishalcv · Answer

I agree with you. Those "some" movies may well turn out to be outliers. Moreover, out of 100000 movies, 10 might have performed better if large initial investments were made. That doesn't mean one would go with that strategy whose success rate is so low. Poor answer options.

Vishalcv · Answer

Hello Sir  EducationAisle  ,

Can you help me out with this question? IMO , on negating option A, those "some" movies may well turn out to be outliers. Moreover, out of 100000 movies, 10 might have performed better if large initial investments were made. That doesn't mean one would go with that strategy whose success rate is so low. Poor answer options.

EducationAisle · Answer

Hi Vishal, while I agree with your argument, kindly be aware that this is an unofficial question.

It's best to stick to official questions, while preparing for GMAT.

NPProb · Answer

No, it doesn't clear the air at all.
The explanation from MGMAT states that:
 
But if you can't judge whether a movie is valuable to invest over the remaining life of it, why do you choose   this very movie   to do the campaign strategy adjustment and invest more money on it? It doesn't make any sense. So you have to assume "h ow a film performs during its opening weekend is a strong indicator of the film’s financial performance over its lifetime. "
This is a typical "  explanation just for finding an explanation  ".

gullyboy09 · Answer

Hi  KarishmaB , can you please help me with this question, and really thanks for your earlier help, even for some stupid Qs I asked. I have three doubts here!

1. From passage - "..to maximize returns on their marketing investments, studios should initially release all their films on a small number of screens and with a limited advertising campaign", does this mean this is the only way? In simple words, to get A, one should do B. Does it mean A is the only way? If not, in which case it would be like this is the only way (must/need?).

2. In option C, "A film’s prior performance in noncommercial settings, such as festivals, is not well correlated with how the general public tends to react to than film.", if we negate - its highly correlated, then we don't need to arrange small screen presentation during weekend to get the understanding of the audience, we have this information already from the festivals. (if conclusion meant this is the only way, then C can also be an answer)

3. Can you help me with option E, the last part over its lifetime - I am not sure if we think about lifetime here or not.

Studio executives carefully examine how a film performs on its opening

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Studio executives carefully examine how a film performs on its opening

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