Cinemath: Adjusting Box Office for Inflation and the Problem with Comparing GONE WITH THE WIND to STAR WARS to THE AVENGERS

     September 23, 2013

cinemath adjusted box office

The New York Times Best Seller list is based on the number of books sold.  Television ratings report how many people watched the program.  Broadway World posts the number of seats sold for each show each week alongside the gross.  Hell, you can see how many tickets each movie sold in Japan and France, yet in the domestic market (U.S. and Canada), we only get box office grosses.  Box office is a measure of profitability, not popularity.  Box office says the New Yorker who buys a $20 ticket for an IMAX 3D showing at the AMC Empire 25 is four times as important as the Illinoisian who buys a $5 ticket for a Sunday matinee at the AMC Mt Vernon 8.  Let the accountants worry about revenue—I only care about how many people saw the thing.

Eventually I’d like to find a better way to rank the highest-grossing movies of all time, but this edition of Cinemath will start where most other box office statisticians do: adjust for ticket price inflation.  More after the jump.

hard days night lineThe adjusted gross is calculated by dividing the total domestic gross by the average ticket price of that release year to estimate the number of tickets sold.  That number is multiplied by $8.16, the estimated average ticket price in 2013 to give a rough idea of what every movie made in “2013 dollars.”

A few notes on the available data:

  • Box Office Mojo posts the domestic box office for virtually every release since 1980.  I grabbed the top 100 domestic grosses for every year from 1980-2012.
  • Data on international grosses is also limited, and the average ticket price only covers theaters in the United States and Canada, anyway.  So we have to stick to domestic box office*.
  • Only the first theatrical run is considered—grosses from reissues are omitted.

These restrictions cause a few hiccups when ranking every movie on the all-time charts, but we’ll get to that on page two.

The chart below plots the adjusted gross of every top-grossing movie of the year from 1980-2012.  (Note: Javascript must be enabled to view these Google charts.  Hover over a data point to see the title and adjusted gross.)


 

Rain Man has the honor of the lowest adjusted gross on the list at $343 million.  Otherwise, most of the movies are between $350 million (Three Men and a Baby) and $692 million (The Phantom Menace).  The average is about $550 million.  That seems about right.  $350 million domestic is a total that would thrill any aspiring blockbuster.  Avatar and The Avengers proved it’s possible to break the $600 million barrier in the modern age.  Anything above $700 million puts you in the Hall of Fame.  That’s Jurassic Park ($703 million), Avatar ($816 million), E.T. ($997 million), and Titanic ($1.1 billion).

There is no noticeable trend in the qualification for top movie of the year over time, but it’s a different story for the other percentiles.  The graph below plots the adjusted gross for the movies ranked 10th, 25th, 50th, 75th, and 100th every year.


 

I expected that adjusting for inflation would flatten the lines—that the threshold for each percentile would stay constant over time.  However, all the lines trend up.  The threshold for a top 10 movie in the 1980s was $125-$175 million in 2013 dollars.  Recent releases need an adjusted gross of at least $200 million to sneak into the top 10.  I suspect this is related to the population increase (227 million in 1980, about 310 million in 2012) and theater expansion.  The Empire Strikes Back reached less than 1,300 theaters—The Avengers opened in over 4,300 theaters.

In a similar line of analysis, I was very interested in this visualization of movies that earned $100 million.  The image below shows the actual (not adjusted) domestic gross for the top 100 from 1980-2012.  The movies that grossed $100 million or more are highlighted in green.
 
100 million box office
 
There are many more green cells in recent years, which makes sense given ticket inflation.  I expected that once the totals were adjusted for inflation, we would see about the same number of movies cross $100 million in 2013 dollars every year.  Nope.  The image below shows the adjusted gross for the top 100 from 1980-2012.  The movies with an adjusted gross of $100 million or more are highlighted in blue.
 
100 million adjusted box office
 
I don’t have a great hypothesis to explain this trend (challenge to all commenters), but I believe the visual speaks to the variation in the theatrical marketplace over time, which brings us to phase two.

Continue to page 2 for the all-time charts and a discussion of why it’s so difficult to compare modern releases to Gone with the Wind

Page 2

 

*I am trying to file all my features on domestic box office before domestic box office becomes irrelevant.  I may already be too late.

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