Why are movie box office results reported in dollars, rather than tickets sold?
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Listener Stan asks:
Why are movie box office results reported in dollars rather than tickets sold?
Observing how well a movie does in theaters is something of a national pastime. Movie theaters are struggling, but a phenomenon like “Barbenheimer” last year shows the public has an appetite for success stories
“As the numbers get bigger, people get more interested, particularly when it comes to money or currency,” said Paul Dergarabedian, senior media analyst for Comscore, an analytics company that tracks box office data.
Telling them which films raked in hundreds of millions or billions is one way to catch their eye. Historically, trade journals reported box office results by dollars, a tradition that continues to this day.
In the 1930s, Variety published movie grosses by U.S. city, said John Sedgwick, co-editor of the book “An Economic History of Film.”
“Variety got its answers from the managers of first-run cinemas across 20 or so cities in the U.S. The weekly data was rounded up and probably exaggerated,” Sedgwick said.
After World War II, Variety published the annual box office grosses of the most successful films in North America, Sedgwick said.
AC Nielsen, now known as the Nielsen Corporation, collected box office returns for movie distributors. Sedgwick theorizes that this data was made public when the studio system went into decline in the 1940s because “film performance data became important information for investors to evaluate the risk associated with individual film productions.”
Since then, newer companies like Comscore and Box Office Mojo have continued to report box office grosses in dollars.
“Number of admissions, let’s just say it, is not as sexy as millions of dollars or hundreds of millions of dollars,” Dergarabedian said.
Those figures are more intriguing, and better for headlines, he said.
It’s important for industry pros to know a film’s box office performance because downstream deals are tied to that metric, said Brett Danaher, a data scientist and associate professor of economics and management science at Chapman University.
“If a movie clears a certain box office revenue number, Redbox or a streaming service might contractually end up paying more for the subscription rights,” Danaher said.
Prices also widely vary, not just by city but by the theater experience you’re paying for.
“Consumers pay more for 3D movies or for Imax. Consumers pay more for luxury seating in theaters with meals and drinks. If a movie can really draw people to the Imax screen – where they might pay double the ticket price – that can make the movie very successful relative to a movie that can’t do the same,” Danaher said.
But revenues aren’t perfect, of course. Because of inflation, movies that set records might actually be less successful than older films. For example, “Star Wars: The Force Awakens” is the highest grossing film at the U.S. box office, earning more than $936 million. For comparison, 1939’s “Gone with the Wind” raked in about $200 million domestically. That’s more than $4.5 billion after adjusting for inflation.
The global box office makes things even more complicated, underscoring one of the advantages of measuring attendance sales. “Avatar” has earned $2.9 billion worldwide, becoming the highest grossing movie of all time (again) after it was rereleased in China. “Avengers: Endgame” temporarily snagged the title in 2019 after earning about $2.8 billion worldwide.
The COVID-pandemic caused upheaval in the movie industry. Theaters performed badly due to dwindling attendance numbers, and films like “Lightyear” and the fifth “Indiana Jones” movie failed to meet expectations. On top of that, the actors’ and writers’ strikes delayed some much-anticipated releases until this year and 2025. Some exhibitors are relying on repertory screenings of classic films to fill in the gaps
People are especially attuned to box office receipts now that the movie industry is in a precarious position. A particular movie’s failure could mean that executives are less willing to take a risk on similar films.
Or its success could mean studio executives will greenlight similar films. At least, that’s what movie pundits and directors like Martin Scorsese are hoping for.
Our obsession with stats will likely never go away. Dergarabedian, who’s been tracking the box office for over 30 years, said that people have always been enamored by these numbers.
Just like baseball fans want to know a pitcher’s average fastball, movie fans want to know how fast a film got to $1 billion.
“If you love baseball, you’re going to be all about those stats. You love movies, you’re going to be all about the box office,” Dergarabedian said.