Abstract: In recent years, social media has become ubiquitous and important for social networking and content sharing. And yet, the content that is generated from these websites remains largely untapped. In this paper, we demonstrate how social media content can be used to predict real-world outcomes. In particular, we use the chatter from Twitter.com to forecast box-office revenues for movies. We show that a simple model built from the rate at which tweets are created about particular topics can outperform market-based predictors. We further demonstrate how sentiments extracted from Twitter can be further utilized to improve the forecasting power of social media.
Conclusion: In this article, we have shown how social media can be utilized to forecast future outcomes. Specifically, using the rate of chatter from almost 3 million tweets from the popular site Twitter, we constructed a linear regression model for predicting box-office revenues of movies in advance of their release. We then showed that the results outperformed in accuracy those of the Hollywood Stock Exchange and that there is a strong correlation between the amount of attention a given topic has (in this case a forthcoming movie) and its ranking in the future. We also analyzed the sentiments present in tweets and demonstrated their efficacy at improving predictions after a movie has released.
While in this study we focused on the problem of predicting box office revenues of movies for the sake of having a clear metric of comparison with other methods, this method can be extended to a large panoply of topics, ranging from the future rating of products to agenda setting and election outcomes. At a deeper level, this work shows how social media expresses a collective wisdom which, when properly tapped, can yield an extremely powerful and accurate indicator of future outcomes.
(ViaMarkPerry)
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