Preston Lerner last wrote for the magazine about the Southern California aerospace industry

Joseph Farrell clicks furiously from screen to screen on his laptop, pausing every now and then to point out an impressive feature but never long enough to divulge any secrets. Developed by the National Research Group, Farrell’s Hollywood market-research leviathan, the software program tracks every major motion picture released since 1982, cross-referenced by actor, director, box office, genre, studio, country and just about any other index imaginable. “I don’t think any individual outside NRG knows just how comprehensive the work we do actually is,” Farrell says with a faint smile. “We give each studio what it needs to know, but no more than that.”

A shadow force in the filmmaking process, the National Research Group tests movie concepts, titles, television commercials, print advertisements, trailers and, most important, films themselves. Over the past two decades, hundreds of movies have been reshaped as a result of its research. Dozens have been re-shot, often with brand-new endings. These days, as many as nine out of 10 films released by the major Hollywood studios bear NRG’s fingerprints. Not surprisingly, Farrell is regarded warily, if not with outright revulsion, by producers and filmmakers who feel their movies have been sabotaged by NRG’s research.

Still, Farrell enjoys the confidence of virtually every studio head and marketing chief in town. Elusive, accessible only to insiders, he twice has been named--to his immense annoyance--to Premiere magazine’s annual compendium of the 100 most powerful people in Hollywood. At the mere mention of this list, he bounds out of his chair. “It’s a joke,” he says, exasperated. “I don’t greenlight movies. I don’t determine how much money is spent. Am I talking all day long to people that other people would like to have the ear of? Yes. Can I decide on anything they do? No. All I can do is give them my best advice, and either they use it or they don’t.” All of which is true as far as it goes. And all of which misses the point.


A onetime seminary student and the brother of an Irish priest, Farrell is Hollywood’s secular confessor. He is privy to the marketing sins, creative faux pas and blockbuster mistakes that have destroyed careers and toppled regimes. And in a town where the paranoia barometer perennially hovers at Nixonian levels, he is the rare individual with entree to the inner sanctums of every major studio. “I’ve seen some very funny things happen. But,” he adds quickly, “I’ve vowed to be confidential about everything.”

A well-preserved 64, with pale skin and fine features framed by white hair that’s tall on top and closely cropped on the sides, Farrell has fashioned a singularly mysterious niche out of shunning the Hollywood spotlight. It’s somehow telling that his wife, 30-year-old actress Jo Champa, is a movie star in Italy rather than the United States. (He has three grown sons from a previous marriage.) And while he sells art furniture of his own design, he does so under the name Guiseppe Farbino.

NRG works out of purposefully anonymous quarters on the Miracle Mile with claustrophobic corridors, lots of opaque glass and all the personality of a CIA front. From a window of his 29th floor corner office, Farrell has a panoramic view of the Hollywood Hills. A sliding door leads to the office of his longtime partner, Catherine Paura. The room’s most conspicuous feature is the color scheme--green carpet, green tabletop, green computer screen and dozens of dossiers in green jackets. These confidential reports, alternately revered and reviled throughout the industry, contain the results and analyses of the questionnaires, or test cards, filled out by audiences at NRG test screenings. Typically reduced to a number grade, these NRG scores often play a leading role in deciding where a movie is cut, how it’s marketed and when it’s released.

“In general, I think research screenings are extremely valuable,” says Bob Daly, who recently stepped down after a long tenure running Warner Bros. “Filmmakers are so close to the material, and they’ve been living with it for so long, that they sometimes lose their objectivity. I’d say that 50% of the movies we did at Warner Bros. over the past 20 years were improved by the process.” NRG’s favorite warhorse, certainly, is “Fatal Attraction,” which got a new-and-improved ending when test screenings showed that audiences wanted Glenn Close’s character to be punished. More recently, director Steven Soderbergh trimmed down an ambitious single-take scene lasting seven minutes in “Out of Sight” after a preview audience hated it. “There’s no substitute for sitting in a theater with 500 people and seeing where you’re losing them,” Soderbergh says. “But chasing a number is a bad idea.”

Therein lies the greatest danger of the uneasy partnership between artiste and social scientist. “Everybody calls market research a tool,” says Russell Schwartz, president of USA Films. “Well, sure, it’s a tool. The question is, do you use it as a hammer to pound a director into submission, or a chisel to reshape his vision?” And in many cases, especially movies positioned as mainstream entertainment, the blunt-instrument approach is preferred. “A lot of studio executives fixate on the numbers,” says a screenwriter who declined to be identified. “There’s a cover-your-ass mentality in Hollywood. If you have to make a marketing or creative decision and you can back it up with a number, you have something to blame if everything goes wrong.” Writer-director John Milius, who’s had several run-ins with NRG, says flatly: “Joe Farrell has ruined more films than anybody in Hollywood. You think anything great ever came out of asking 20 idiots [from a focus group] to judge a movie?”

Farrell has heard it all before, and he answers his critics with a brand of weariness tinged with irritation. No, test scores aren’t the Holy Grail, and yes, he acknowledges, movies are a creative enterprise whose performances can’t be forecast as accurately as the sales of toothpaste. But he wants to make a few things clear: “First, we are not the destruction of creativity. Second, just because something’s too complicated to measure with complete accuracy doesn’t mean that you shouldn’t measure what you can. You’re going to miss sometimes: Some movies are just too creative, and if you’ve got no analogs, it’s hard to predict how they’re going to do. But by and large, most movies are measurable in terms of how they’ll do and how best to approach them.”

Market research has been part of movie making since the industry was in its infancy. Many early movie directors came from the theater world, where it is common to open out of town to tweak a show into shape. Silent movie comedians routinely tested their films to determine which bits were working. During the height of the studio era, test audiences filled out questionnaires known in the trade as idiot cards. Later, the tele-voting system developed by George Gallup allowed audience members to twist a dial to register their opinions about a movie while it was being shown. By the ‘70s, Hollywood was taking shape as an industry town dominated by media conglomerates more comfortable with MBAs than with movie moguls. The new breed of studio executive already spoke the language of market research. Several marketing firms moved to Hollywood to take advantage of what promised to be a booming business opportunity. One of them was pollster Lou Harris, who dispatched his vice chairman--Joe Farrell--to open a West Coast office in 1977.

A Harvard-trained lawyer with plenty of political savvy, Farrell also was an artist--he painted professionally as a young man and still maintains a studio--who’d spent much of his career lobbying and crafting legislation for cultural arts groups. After a year in L.A., he and Paura, his onetime Lou Harris assistant, formed NRG. Their first big project was a night-long series of screenings of “Apocalypse Now.” Director Francis Ford Coppola was so pleased with their work that he not only became a fanatical supporter of the research process, but he loudly championed NRG to anybody who would listen. Armed with this recommendation, Farrell and Paura made the rounds with a pitch touched with genius: “Catherine and I went to each of the studios,” Farrell recalls, “and we said, ‘You don’t know who were are, and we know this sounds strange, but we not only want to do all of your [market-research] work but everybody else’s as well, so that way we can serve as a clearinghouse.”’

By the early ‘80s Farrell had befriended the executives who, for the most part, continue to run Hollywood. “The film business is a relationship business,” says one studio chief, “and NRG basically owns the town.” Just how strong is its stranglehold? In 1993, the Wall Street Journal ran a front-page story alleging--incorrectly, Farrell says--that NRG falsified test data. Not only did Farrell not lose a single account as a result of the charges, but he picked up another studio as a client.


Hundreds of people long, the line snakes around the Mann Marketplace 4 movie theater and curls into the indoor parking lot of a gigantic outdoor mall in Glendale. The crowd looks well-fed, well-scrubbed and well-behaved, plucked from the heartland of the bell curve. For more than an hour, these people wait without complaint while NRG employees check names against checklists. The carrot is a test screening of “The Whole Nine Yards,” described in the yellow NRG invitation as “an outrageous dark comedy” culminating in “a life-and-death struggle with disastrous but hilarious consequences.” Bruce Willis is billed as the star. The tickets are free. Rarely do researchers enjoy a more grateful group of guinea pigs.

Most of the moviegoers were recruited by entry-level, part-time NRG employees who roam suburban malls and multiplexes with ever-present clipboards. Paid on the basis of how many warm bodies they deliver, these recruiters are notoriously and understandably reluctant to reject test-screening candidates. A more senior, more professional grade of NRG employee works the crowd here in Glendale, verifying ages (between 17 and 49) and occupations (no entertainment industry types). But there’s an unmistakable going-through-the-motions quality to the operation. In one case, audience members are asked to stipulate that they had attended two of the following movies: “Scream,” “Scream II,” “Wild Things,” “Mimic,” “American Werewolf in Paris,” “I Know What You Did Last Summer,” “Alien Resurrection.” But with 550 people to vet in an hour, FBI-style background checks simply aren’t possible.

NRG has come a long way from the days when it shared a building with a sex shop in Hollywood, and Farrell and Paura conducted their own “intercept” interviews in parking lots by bribing kids with ice cream cones. According to insiders, test screenings cost about $15,000 apiece, with at least three per movie and sometimes as many as a dozen. Factor in analysis, and up to $250,000 may be spent testing a big-budget movie and an equal amount testing promotional materials. In 1996, shortly before it was bought by a Dutch media conglomerate, NRG reported revenues of $44 million. And now? “We’re a wholly owned subsidiary, so I don’t think I can say,” Farrell replies coyly. “But I can tell you that we’re always progressing.”

NRG has more than 2,000 full-time employees worldwide. Yet in some respects, the company edifice rests on the shoulders of those part-time recruiters charged with finding the proper sample audiences. “So often I look at a test audience and I realize that these aren’t people who would [pay to] see the movie,” says a producer who’s convinced that poor NRG scores prompted the studio he was working with to lose faith in his critically acclaimed but edgy comedy. “It’s like showing an X-rated film to a church group.”

Here in Glendale, NRG has amassed a lowest-common-denominator audience. Before the lights go down, an NRG executive addresses the crowd to explain that the movie is a “work in progress"--no credits, an unfinished soundtrack, etc. This isn’t unusual: At the first test screening of “Twister,” half the special effects were missing. “The Whole Nine Yards” is closer to completion. A gooey love scene elicits groans, but pratfalls play well and a fart gets the biggest laugh of the evening. When the movie ends, two-page questionnaires are distributed: “How would you rate the performances? Which scenes did you like? What do you think of the ending? Where were you confused?” More detailed opinions are elicited later from a small focus group. “I’m a strong believer in the value of this kind of research because it sometimes shows you things you couldn’t necessarily get just by watching the movie,” says Gareth Wigan, co-vice-chairman of the Columbia TriStar Motion Picture Group. “In ‘My Best Friend’s Wedding,’ test audiences loved Rupert Everett and couldn’t understand why he didn’t come back to help Julia Roberts. So we shot a new ending, and people found it much more satisfying.”

For shorthand purposes, the test card results often are referred to by a single number, with an 85, for example, meaning that 85% of the audience rated a movie “excellent” or “very good” and would “definitely” recommend it. “If you think that the numbers are the only thing that matter, then you’re a fool,” says Mark Gill, president of Miramax L.A. “But they’re the best way to settle an argument because--properly interpreted--they have a funny way of being a lot more accurate than anything else.”

Even NRG critics generally agree. But they take great delight in exceptions to the rule, which is why industry lore is full of stories about well-intentioned mainstream fare that tested through the roof, then stiffed at the box office--"Dad,” “October Sky,” “Opportunity Knocks” and “Simon Birch,” to name a few. Then, there are offbeat films such as “The Blair Witch Project,” “12 Monkeys,” “Seven” and “Cape Fear” that tested poorly but did terrific business. Test audiences said they despised the black comedy “War of the Roses.” “GoodFellas” succeeded only after it was showered with critical praise. Ditto for “Pulp Fiction,” which inspired love it or leave it (literally) responses during test screenings.

Although Farrell refuses to discuss specific movies, he says there’s a fundamental difference between playability and marketability. Insiders say, for example, that “Strictly Business” played great--that is, people who saw the film loved it--but few moviegoers could be coaxed to see a middle-class African-American romantic comedy. Farrell acknowledges that scores alone don’t necessarily predict how a movie will fare. “Sometimes a movie doesn’t play well overall. But it plays well with certain people. The studio can still make it a success if it really concentrates on the sector that enjoys it.”

Unfortunately, these nuances are sometimes lost on fearful executives who imagine their careers going into turnaround when they see grades in the 30s and 40s. Not wanting to throw good money after bad, they cut marketing budgets, and the movies vanish after opening without fanfare. Producer Barry Mendel calls this “a self-fulfilling prophecy.” He recently had just the opposite experience with the summer smash “The Sixth Sense.” “When they greenlit the movie, we just didn’t know. But when we screened the movie, the trailer and the TV spots, it tested very well. So we knew right away it would be a hit.”


“I hate green,” Catherine Paura says with a contagious laugh as she sits with her legs crossed in NRG’s green conference room. “Using green as our signature was Joe’s idea.” Color preference is one of the rare differences between Paura and Farrell, two legendary workaholics who have been partners for so long that they can finish each other’s sentences. “Somebody once said, ‘Catherine and Joe is a unique entity,”’ she jokes with another expansive laugh.

Looking toward the new millennium, Paura, 49, says the biggest challenge facing NRG is the Internet. Movie Web sites, most notably Harry Knowles’ ain’, have threatened to corrupt the market research process by posting reviews written by people who have infiltrated test screenings. (The fear of leaks prompted the cancellation of test screenings of the new Arnold Schwarzenegger action-adventure film, “End of Days.”) Meanwhile competitors are aggressively promoting new Internet-based market-research products. Although NRG has a confidential Web site of its own, Paura says the technology isn’t yet sophisticated enough, nor is the Internet available in enough households, for online research to be much more than a curiosity. Ten years down the road, who knows? But no matter what the medium, Paura says, “it comes down to the people you talk to, the questions you ask them and how you interpret their answers.”

Back in his office, Farrell says he envisions significant change in the way movies are made and shown. But in terms of market research, the revolution is already over. “In the early days, we had to explain what we were doing before we could tell [studio executives] what we’d found out. Now, everybody knows the drill,” he says. “Almost nobody sees anything wrong with research today.” Call it the greening of Hollywood.