Film Sequels - love at second bite

The second film in the 'Twilight' series is thriving at the box office and new research suggests that there is a formula for the perfect sequel. Kaleem Aftab reports

The stellar first-weekend box-office take of New Moon left few surprised, as the Twilight sequel made $279.4m (£167.3m) worldwide. That figure was at the top end of analysts' expectations and the film looks like it will easily surpass the final gross estimate made by a group at the Cass Business School in London who have come up with a formula for predicting the success of sequels.

Sequels are the safest way for studios to make money – they are now planned before the first film has been released. Already there is talk of when Guy Ritchie will make a second Sherlock Holmes film, not if, and a script for the sequel is near completion. The British detective has appeared in more movies than any other character, but this latest effort, which will be released in the UK on Boxing Day, is part of a trend for "rebooting" – repackaging familiar characters to fit modern tastes. The gusto being shown by the producers behind the Holmes film suggests the studio, in this case Warner Bros, knows its movie will be a success.

The top three films at the global box office this year have been Harry Potter and the Half-Blood Prince (the sixth film in the series), Ice Age: Dawn of the Dinosaurs (No 3) and Transformers: Revenge of the Fallen (No 2). New Moon (or The Twilight Saga: New Moon, to give it its full title) is expected to make it into the top four. Even the film currently at No 4 in the chart, the animation Up, has benefited from the brand awareness and values cultivated by the company that made it. Pixar has been so successful that Up has been marketed as part of a body of work comprising both Toy Story films, Finding Nemo and The Incredibles. At No 5 in the 2009 box-office chart is Angels and Demons, the sequel to The Da Vinci Code (2006). A truly standalone film, the comedy The Hangover, is at No6.

Guessing how much money a film will make is a huge business. Studios spend as much time researching the market for a film as any company launching a new product. Cinema chains want to know how many screens they should book; predictions from test screenings and market polling are used by studios to decide the number of prints that are made and how much should be spent on marketing. In the week of release, analysts appear in trade magazines, predicting how much money a movie will take. Test screenings are common and film festivals offer a service to producers and distributors, recording audience reaction in terms of how many people attended and when they laughed, and the perceived general mood.

Most predictions for New Moon were that it would make between $70m and $90m on its first US weekend. It made $72.7m on its first day. Rival studios had estimated that the film would struggle to break £110m, because its audience would be made up predominantly of females under 25, with the second largest segment being females over 25. Indeed, 80 per cent of the American audience for the film was female, and usually this is a sign that a film will perform moderately (the notable exception to the rule is Titanic, from 1997, the highest-grossing film of all time). The popular belief is that "fanboy"-driven films or family films are the best way to ensure a huge opening. Whether a film is a success will not usually be determined by how much it made compared to its budget, but by how it performed in line with such estimates.

The formula being put forward by the Cass Business School puts less emphasis on the gender divide and more on the brand value of a franchise. Under the formula, factors that determine box-office success include the time between the original and the sequel and whether members of the original cast are kept. For example, Professor Thorsten Hennig-Thurau argues that Basic Instinct 2 (2006) had no chance at the box office because Michael Douglas was absent and 14 years had elapsed between the two films, meaning that audiences were given a less glamourous Sharon Stone.

The Cass Business School research, published in the Journal of Marketing, examined data from all 101 sequels released in North America between 1998 and 2006 and compared it to what it called "twin" movies, films which shared characteristics with sequels, such as genre, budget, advertising expenditure and screen exposure. The research showed that New Moon would be expected to return $34m more in its US run than a comparable vampire teen romance.

The last time a non-sequel took the No 1 spot when box-office totals were totted up was 1998 – surprisingly, the movie in question was the Michael Bay disaster film Armageddon.

A huge secondary market has developed in the selling of sequel rights. The Teenage Mutant Ninja Turtles franchise was sold for $60m this month and the rights to the Terminator franchise are shortly to swap hands again.

Studios have become so proficient in the marketing of sequels that when Bruce Willis was promoting Die Hard 4.0 in 2007, he said: "When we made Die Hard 2 [in 1990], it was at the birth of the whole sequel business and studios really didn't know what they were doing. We just pretty much remade the first one, but now studios have a far better idea of what will be a success."

These days, audiences are told to expect a franchise. Spectators going into the first Harry Potter film knew there would be seven more (although the success of the franchise has seen this turn into eight) – Twilight also arrived on the back of a series of books.

When the British director Christopher Nolan signed up to the Batman franchise, which had spawned four films since Tim Burton's first reinvention in 1989, he suggested he was going to make three films, in a "rebooting" of the series. If a franchise is dying, studios know audiences will come out to see much loved characters if the new film is positioned as a complete reimagining. This year's great success, of course, was was Star Trek, a reimagining by JJ Abrams, the creator of the hit television series Lost, of a franchise which had already spawned 10 films.

When sequels first appeared, they lacked a story strand that ran through several movies. Nowadays, the first film in a franchise is not a standalone product: audiences expect that characters and actors will reappear in sequels and that storylines will continue from one movie to another. The Oscar winner Adrien Brody, for example, recently signed up to appear in the next instalment of the Predator franchise – on doing so, he was asked to sign a contract that said he would appear in sequels if required.

Nonetheless, if the opening film in a franchise fails to meet expectations, planned sequels can be abandoned. That is what happened with the 2007 Philip Pullman adaptation The Golden Compass. In the case of Ang Lee's Hulk (2003), the studio tried to pretend the film did not exist and gave the character another try five years later.

In 1974, the modern sequel got off to a great start with Francis Ford Coppola's The Godfather: Part II. The only sequel to win an Oscar for best film, it is considered by many critics to be the best of all time. In the later 1970s and the 1980s, however, sequels became subject to the law of diminishing returns, until it was deemed that they were no longer viable – a decision that seemed to take forever regarding the Police Academy series. However, the advent of the home video market, combined with a better understanding of audience taste, ensured that in the 1990s sequels started to make more money than originals. Fanbases were built up on video and then capitalised upon in the cinema. The Cass Business School research speaks warmly about the effect on DVD sales of earlier entries in a franchise when a new film is released.

At the end of 2010, it will be a huge surprise if the top three box-office hits are not Toy Story 3, Iron Man 2 and Harry Potter and the Deathly Hallows: Part I. That Harry Potter title is quite something – a sequel with "Part I" latched on to its title, without a hint of irony.