Thursday Rethink: The Box Office Reporting System Is Broken

The Premise: The current system used by film distributors and exhibitors to track box office reporting has ceased to give any kind of meaningful data about a film's popularity or financial success.

The Background: Exactly 10 years ago, Sam Raimi's first Spider-Man film broke the $100 million dollar ceiling for domestic (which includes the continental US and Canada) opening weekend grosses. This past weekend Joss Whedon's The Avengers broke all-time records for opening weekend grosses once again, taking in $207 million over its first 72 hours and becoming the first film to break the $200 million dollar barrier. Such a one-hundred percent increase in a single decade is not in line with the general inflation or boosts from 3D ticket sales. Weekend box office numbers have become the sporting statistics of film nerds (I know I regularly read them on Monday morning), crunched and debated at websites like Box Office Mojo. But can we really say that the current system for reporting weekend box office gives us any kind of meaningful gauge of either a film's financial success or popularity? If box office pundits are to continue to use these numbers the system needs to be seriously overhauled, as it no longer provides any meaningful statistics. Here are a three reasons why the system is broken and a couple of ideas of how it could be fixed.

Three Reasons:

1. Reporting raw dollar amounts offers no sense of context. Box Office Mojo has attempted to fix this with their "adjusted for inflation" numbers. By such a scale, 1939's Gone With the Wind remains the all time champion; Box Office Mojo estimates it's take at $1.6 billion by todays ticket prices. But such adjustments remain estimates, and it's difficult to meaningfully compare a film from the mid-30s to today. Not only should we be adjusting for ticket prices, but what about the lowered ticket prices for matinee and children's admissions? Likely children's films (which already do big money) are actually even more heavily attended than the money shows. But, it also means that each child is usually accompanied by an adult which automatically doubles the attendance of children's films. To create a fuller context for the reporting of box office, not only must we take into account inflation (both standard, and boosted prices due to 3D or IMAX sales) but also a sense of how much cinema cost. Was a ¢10 admission in the twenties an equally high price to pay as a fraction of a person's salary as $12.50 is today? Or is the opportunity cost of seeing a film today higher? The social and economic context creates uneven comparisons.

2. The current distribution model favours huge openings and screen saturation. I heard an anecdote about an economics major who only sees films that gross in excess of $100 million. His reasoning is that on the open market, the public's choices offer the best gauge for what is good. What sells the most in a free market should be what people like the best. The naiveté on display from this economist is staggering, failing to take into account any actual reflection of how the cinema business works (setting aside for a moment the troublesome notion that popularity equals quality). It fails to understand the way that the relationship between distributors and exhibitors actually book films. The distributors (usually the major studios, such as Twentieth Century Fox or Sony Pictures) have created a system by which they take a larger percentage of the box office in the early weeks of a film's run. Thus, the pressure has developed to inflate opening weekend numbers through massive ad campaigns and manufactured hype (e.g. a film such as The Avengers has a reported budget of $220 million, but that does NOT include advertising costs, which can match or exceed the production budget itself). Ads everywhere, stars appearing on late-night talk shows, and food and toy tie-ins all push a film to the front of the public's consciousness for a week or two, and create the cultural imperative to see a film as soon as possible. Beyond this, often popular films saturate the cineplexes, making it difficult for smaller films to book screens. The Avengers played on 14 screens in the Kitchener-Waterloo market, out of roughly 50 screens: over a quarter of all cinema screens in the region. Such a pattern extends overseas. In the summer of 2009, in Bangkok, Aren, my wife, and I wanted to see a film at one of Bangkok's famed movie theatres. Of the 14 screens in the Siam Paragon (South East Asia's largest mall), 10 of them were playing Michael Bay's Transformers: Rise of the Fallen. The other 4 screens were playing Thai language films. There was no choice available for us. Obviously larger distributors have the ability to book more screens, giving them an unfair advantage over other films. Thus, the box office success of certain films is pretty much determined weeks before the films ever play in theatres.

3. Money offers no guarantee of popularity or quality. Thus, the total box office gross offers little assurance of either a film's relative popularity or quality. Of the current statistics that are available, per screen average might give a better gauge of popularity (The Avengers is the clear champ this past weekend with $47,000/screen, but the number two film by this measure was #16 by total, The Best Exotic Marigold Hotel with $27,000/screen. Assuming - probably incorrectly - that it would be able to fill an equal number of screens of elderly cinema goers, that would translate to over $100 million!). Still, some measure of actual ticket sales would be nice to see. But the studios and distributors carefully guard that information. What they are scared of is the reality that cinema attendance has plummeted consistently since the 1930s. But this makes sense. In the 30s there was no television, video games, or any other media that directly conflicts with cinema's audiences. Cinema remains a vital part of the cultural conversation. And perhaps that is where we should aim. A film like last fall's Drive failed to generate much at the box office, but it generate plenty of critical discussion both among professional film critics, cinephiles, and fanboys. Film communities and the enthusiasm generated for films comes not from box office records, but from the discussions like the one's we attempt to participate in on this website. We can ultimately take box office reporting for what it is, a flawed system that we shouldn't put so much stock in.