Why Box Office Inflation Actually Matters

[00:00:00] Speaker 1: hello everybody i'm dan merle and no this is not charts with dan that's going to be out tomorrow on its usual day but this is a video about box office specifically about a topic i get asked about all the time adjusting box office grosses for inflation wait wait wait don't click away yet i promise i'm going to make this as interesting as i possibly can why am i making a video about inflation adjusted box office well to be honest i didn't really plan on it but over the weekend one of my colleagues here on youtube john campia who's been doing this longer than just about anybody else released a video about box office inflation that i've already gotten questions about and because my analytics tell me that john and i have a lot of viewers in common i figured some of you might want to know my take if nothing else i'm doing this because charts is already long enough and i want to really dig down on this topic instead of only briefly touching on it tomorrow now because i know how the internet works i want to say right off the bat i have absolutely no beef with john campia i know john i like john and i have immense respect for what he's built over the years he was my first singles opponent on the schmo down we've always been friendly when we see each other in person and he sent me a really nice message about my recent video about the odyssey he even featured it on his show which sent a good chunk of viewers my way just about every time i talk about inflation adjusted numbers on this channel somebody comments about john stance so it's not news that this is an issue on which we have always disagreed and we've acknowledged that with mutual respect so don't take this video as some kind of diss track on john this is more of a counter argument to the points that he brought up a good unhumored low stakes debate about movie related things hmm you know that would actually make a pretty good idea for a show so briefly for those who may not know what do i mean when i talk about adjusting box office for inflation well in basic terms it's taking the box office gross of a movie from the past and then showing what that gross is worth in today's dollars why well because over time the cost of goods and services goes up and the more that the cost of something goes up the higher the inflation rate is when it comes to movie tickets intelligence which is the tracking and analysis firm that provides studios with a lot of their box office data reports that the average adult movie ticket ticket today costs $13.46 that includes an average price of $12.74 for a standard format ticket and $18.22 for a premium format ticket like imax this distinction will be important later the average price was calculated with data showing how many people overall bought premium tickets versus standard format tickets now if you go with intelligence's numbers the average adult movie ticket price has gone up by $1.33 in just the last three years so even a movie that came out in 2023 like the super mario brothers movie was noticeably less expensive to see than a movie coming out in 2026 like the super mario galaxy movie let's say 20 million adults saw the super mario brothers movie at the 2023 average ticket price of $12.13 that would be a domestic gross of 242.6 million but at today's ticket price of $13.46 those same 20 million tickets would cost 269.2 million that number 269.2 million is what the super mario brothers movies gross would be if you adjusted for ticket price inflation now that's a pretty noticeable difference after just a few years and when you go back even further the difference is much more pronounced let's pick a specific year 1989 when according to statistics provided by cinema united then known as the national association of theater owners or nato not that one the average movie ticket price was $3.99 now i'm no math whiz but i do know that that is substantially less expensive than today and the reason i chose 1989 is because i want to look at a case study involving a popular superhero who's not currently spinning a web in theaters batman in the summer of 1989 tim burton's batman made 251.4 million dollars at the domestic box office its opening weekend was the biggest of all time for about three years until it was surpassed by its sequel batman returns and it was an absolute cultural phenomenon i should know i was there and i literally bought the t-shirt batman was not only the highest grossing film of the year at one time it trailed only star wars return of the jedi jaws and et as the highest grossing film ever domestically and it also set the tone for the batman character that we still see today in 2022 matt reeves the batman starring robert pattinson made 369.8 million dollars domestically it was a very successful film spawning a much anticipated and now delayed sequel but it wasn't a phenomenon on par with 1989's film it was the seventh highest grossing movie of the year and it peaked as the 53rd highest grossing film of all time on the domestic charts now if you look at those grosses on paper then the batman outgrossed batman 89 by almost 120 million dollars it's the clear winner when you look at official box office records but if you adjust the 251.4 million dollars that tim burton's batman made in 1989 for ticket price inflation it comes out to 677.1 million dollars nearly 240 million dollars more than what the batman earned if you also adjust its box office gross for inflation now if you watch charts with dan you know my goal is always to provide context and perspective for box office numbers and in my mind if i'm talking about the highest grossing batman movies of all time and i only list batman 89 is the fifth highest grossing batman film which it is behind batman v superman the batman the dark knight and the dark knight rises that doesn't place 1989's film in an accurate historical context adjusted for inflation batman 89 is the third highest grossing batman film a little behind the dark knight rises well behind the dark knight and well ahead of batman v superman if we're talking about accurately framing its performance and popularity at the time of its release this to me is a more complete reflection of how it did that's why i include inflation adjusted numbers in my box office videos for movies released prior to 1997 i adjust according to the consumer price index which tracks general inflation for movies released in 1997 and after i use inflation data specifically gathered for movie tickets now in john's video the argument he makes isn't that talking about inflation adjusted numbers is nuanced because that i absolutely agree with he says that talking about inflation is and these are his words nonsense a lazy staple meaningless rewriting history and not analysis but cherry picking so it's safe to say he's not a fan and it comes down to the fact that he believes that analysis of inflation adjusted numbers is based on what he calls two logical fallacies the first is that adjusting for inflation ignores multiple factors that have impacted movie attendance over the decades for example when star wars was released in 1977 there was no vhs you couldn't watch it at home there was far less competition in the world of entertainment and consequently more people went to see it in theaters than would go see it today because a portion of today's audience could and would choose to wait and watch it at home the second logical fallacy is what he calls the absurd assumption that assumption being that the people who point out that star wars has an inflation adjusted gross of over two billion dollars domestically are saying that the same number of people would also go see it in theaters if it were released today basically that using the adjusted gross is equal to saying the audience turnout would be the same today as it was when it was originally released and here's where my perspective on inflation and john's diverge wildly when i talk about inflation adjusted numbers i'm not saying here's how much a movie would make if it were released today i'm saying here's an estimate of how much a movie did make when you take the money that's already been paid and adjust it to today's dollar value i agree if star wars came out today it wouldn't make over two billion dollars but that's not what i think the inflation data represents it's not so much that john and i don't see eye to eye i just think we have two very different ideas of what inflation adjusted grosses even mean yes inflation has been used in the manner that john is describing by people who are for or against certain movies especially in recent years but those i think are misinformed or bad faith arguments that misuse data that i think is otherwise very helpful i don't think you should throw the whole metric out because of how some people choose to use that data if i threw out every number of mine that i've seen clipped out of charts and misrepresented on social media well i wouldn't have much of a box office show left as i've often said there's no perfect metric for judging film performance over time but adjusting for inflation is one of the better tools we have to put the movies of yesterday on a somewhat equal footing with the movies of today i don't use the data to say that star wars would outdraw spider-man brand new day if it came out in 2026 i use it to say that it already did now you can absolutely argue that star wars would make less if it came out today but that doesn't change the amount of money that it already made yes inflated numbers don't account for things like population growth dropping wages and a variety of other factors but when you use them not as a weapon against the movies of today but as a tool to tell us about the movies of the past they do help to frame where we stand right now looking at the inflation adjusted gross for a movie like star wars or even gone with the wind only underscores how the theatrical market has evolved how movies rarely if ever draw the same number of people as they did in the past in my mind inflation adjusted box office numbers don't ignore the changes that have happened over the last several decades they're often a reflection of those changes but adjusting for inflation isn't perfect it's messy and can't begin to take lots of variables into account so if it's such an imperfect tool well then why do we use it it's because we don't have the number that everybody really wants the best metric to measure historical popularity isn't in dollars it's in people if we had precise records of how many tickets every movie sold we wouldn't need to adjust revenue figures at all true it wouldn't address a lot of the criticisms about comparing a movie from the past to one released in today's environment but it would make things a lot easier and cleaner unfortunately because studios don't report raw ticket sales here in the united states inflation adjusted revenue is the closest thing we have to estimating actual audience reach in the us unlike many other countries box office has never been reported by attendance and no consistent non-estimated record exists of those numbers those numbers outside of the databases of analytics firms and possibly the studio vaults why well i have a theory film attendance has been dropping for decades nash information services the company behind the box office site the numbers reported that attendance in 2025 was less than half of what it was in 2002. this downward trend was of course substantially worsened by the pandemic the introduction of streaming and the 2023 hollywood labor strikes variety reported findings from the pew research center that found that only 50 of americans saw a film last year in theaters at all so despite a population that's consistently growing fewer people overall are going to the movies and this is not the headline that studios want they want big records huge opening weekends and new box office champions not consistent reports that many of today's blockbusters draw only a fraction of the audience that blockbusters of the past so what we get are the new numbers boosted by years of inflation which the studios are happy to let wash away the past and this is another big reason why i think it's important to look at adjusted box office grosses but dan you might be saying you're overlooking an easy solution if we know how much a movie made and we know the average ticket price the year it came out why don't we just divide the box office gross by how much a ticket cost at the time wouldn't that give us a reasonable estimate when it comes to attendance i used to think so in my screen junkies days i did just that i used a number i called the butts in the seats or bits index and for a lot of box office history i think it does provide a reasonable estimate but the advent of technology has in my opinion made even that method problematic when it comes to estimating attendance for today's films due to all the options that movie goers now have ticket prices today don't just fluctuate depending on where you see a movie a ticket in new york city is far more expensive than one here in arkansas for example they also fluctuate depending on how you see a movie tickets for premium formats like imax are more expensive than standard theater tickets so a film like the odyssey for example is going to sell more premium tickets than a film like the devil wears prada 2 making its average ticket price higher which means that in order to accurately estimate attendance based on average ticket price you'd also need to know how many moviegoers paid the premium format price and how many paid the standard format price if 70 of the odyssey's ticket sales are premium tickets versus just 10 for the devil wears prada 2 estimating attendance based on a fixed average ticket price for both movies would be wildly inaccurate and while firms like intelligence will sometimes release data on premium ticket sales versus standard ticket sales overall they rarely if ever share that data when it comes to individual films outside of an occasional mention on opening weekend so we're left with adjusting for inflation an imperfect metric yes but the only real way box office analysts have of trying to contextualize box office history there's one other point that john brought up in this video and it concerns sports statistics basically he said that sports fans have it right because they don't try to adjust past stats to fit an evolving game for example no one tries to adjust babe ruth's home run numbers to reflect what he would have hit had he played 162 games against pitchers of today's caliber however this again reduces interpreting inflation adjusted numbers to a metric that's about predicting the future the key difference being there's no way to even begin estimating how many home runs babe ruth would hypothetically hit in a 162 game season maybe he'd get injured maybe he'd hit a slump maybe the cigars and alcohol would catch up with him adjusting babe ruth's stats requires us to predict hypothetical performance in a modern game and that's pure speculation but inflation adjustments don't invent a new performance we already know the exact dollar amount earned in the past and we know what that currency is worth adjusting box office numbers isn't about predicting what a movie would do in a hypothetical future it's about respecting what it did accomplish in the past and that's why for me it's a number worth talking about but that's just my opinion what do you think are you on my side are you on john's side or you don't even have to pick a side are you somewhere in the middle let me know down in the comments below and as always thank you so much for tuning in be sure to come back tomorrow for my box office show charts with dan where i am going to talk about spider-man brand new day and we're going to look at a pretty big batch of inflation adjusted numbers and also stay tuned right here for the latest in movie news reviews box office and more until next time stay safe and i'll see you then bye [00:15:51] Speaker ?: you