Difference Between Flop and Commercial Failure

In the world of marketing and advertising the terms Flop and Commercial Failure are collectively and extensively used. For a common man, these two may sound and appear to be the same but there are subtle and significant differences between the two in the business world.

Knowing the differences between them can prove to be useful in understanding the universe of marketing.   

Flop vs Commercial Failure  

The main difference between Flop and Commercial Failure is that Flop is a term that is used when a product has failed collectively but the manufacturer did not suffer any losses in the due course, whereas Commercial Failure is used when a product fails but the manufacturer has incurred huge losses.   

Flop vs Commercial Failure

Flop is when a product, for instance, a movie, is not at all appreciated by the masses and critics, but during the running of the movie the producer or the distributor did not suffer any losses.

So, technically the movie did achieve financial success but it didn’t receive appreciation from the critics.   

Commercial Failure is when a product, for instance, a movie procured a tremendous amount of appreciation and praises along with a good review but suffered hugely at the box office as the production cost, actor’s fees, the budget was huge and the collection of the movie could not meet the budget.   

Comparison Table Between Flop and Commercial Failure  

Parameters of Comparison    Flop    Commercial Failure   
  
 Financial loss    Absolutely No    Yes 
Critically Acclaimed    No  Yes 
Audience Recognition    No  Yes 
Production/ Manufacturing cost recovery  Possible    Almost Impossible    
 
More often used in    Movies, concerts, music videos, etc.    Marketing, product placement, etc.    

What is Flop?

Aforementioned, Flop is a term extensively used when a product performs poorly in the hands of the audience but the product manufacturer or producer does not incur any losses from the sale of the product.

Any product including commodities, movies, music videos can flop in the market but can incur good income.  

For instance, if a pop singer arranges a concert with low production and people do not turn up at the show despite buying the tickets, the singer can be considered as a flop but as the singer and producer received the desired amount of income from the show, the show will not be termed as a failure.   

Similarly, if a newly ventured company launches a product into the market with a minimum budget and the masses purely dislike it but as the company didn’t put in much money into it they won’t incur a loss and the company will recover soon from the minor loss.   

The word Flop is currently popularly used as an abbreviation to describe Failure in Launch, Operations, or Premise.

Failure in Launch signifies that even if the product is precisely designed and manufactured due to the wrong marketing strategy in PR, social media, the product fails miserably at the market.   

Similarly, Failure in Operations signifies that the product had a good launch but the performance, reliability of the product has reduced drastically leading to the flop of the product.

Failure in premise signifies that the product launched is currently of no use to the buyers or has good competition presently. Nevertheless, a product flopping in a market is not so detrimental to the company/ manufacturer as there is no financial loss.   

What is Commercial Failure?  

As mentioned above, Commercial Failure is substantially used when a product even if receives praises and appreciation from the masses and still suffers huge financial loss due to high production costs.

Commercial Failure can impact the producer/ manufacturing company for a long-time due to the loss incurred.  

For instance, a music video by a massive production house that includes the top actors and musicians is released and is considerably loved by the audience, but did not bring in the desired income due to the involvement of vast cast and their fees, high-end production cost, it can be termed as a commercial failure.   

A Commercial Failure is often described as a product or company that does not reach the expectations or goals of success. This can be understood with another example of video games launched.

Back in the early 21st Century many newly launched games collectively failed in the market which hugely impacted the video game scene during that period.   

Some video games failed miserably due to hardware failure, console hardware failure, software failure, and huge production costs. Rarely did any video game succeed back then.

Although many video games failed tragically, in the masses, they are considered cult classics and highly appreciated even now.    

In the world of stock marketing, the stock marketing bubble dot-com bubble was a bubble of internet-related companies that grew drastically in the late 1990s using the internet.

But it fell to the ground by 78% in October 2002 and various websites related to them fell tragically and suffered huge losses. Almost no company can recover easily from a commercial failure. 

Main Differences Between Flop and Commercial Failure  

  1. Flop is a term used when a product fails in the masses, on the other hand, a Commercially Failed product need not be rejected by the masses.   
  2. A Flopped product need not suffer financially, whereas a product that is a Commercial Failure undergoes financial loss.   
  3. A product that Flops will not get critical and audience recognition, while a Commercial Failed product may get the recognition it deserves.   
  4. The production company will not suffer any losses from a Flopped product and can recover easily from the loss, on the other hand, a product that is a Commercial Failure brings in huge losses and usually many companies fail to rise from a commercial failure.  
  5. A movie that is Flop can be disliked by the audience but can be a box-office hit, on the other hand, a Commercially Failed film can be loved by the audience and still perform poorly at the box office.   

Conclusion 

From the above-mentioned points, it is clear that the terms Flop and Commercial Failure may tend to be over-lapping but they are intrinsically different.

A Flopped product may be hated by the audience but can bring in substantial income, whereas a product that is a Commercial Failure will usually be appreciated by the audience and is critically well acclaimed but bring in no income.   

A Flopped product may not get the recognition whereas a Commercially Failed product will get the recognition.

Usually, companies will prefer a product to be a Flop rather than being a Commercial Failure because recovering from a financial loss is difficult. Both these terms appear to be the same in layman’s terms but are different in the business world.  

References 

  1. http://cs229.stanford.edu/proj2013/cocuzzowu-hitorflop.pdf 
  2. https://www.clevelandfed.org/~/media/content/newsroom%20and%20events/publications/economic%20commentary/1990/ec%2019900901%20underlying%20causes%20of%20commercial%20bank%20failures%20in%20the%201980s%20pdf.pdf?la=en 
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