Box office

What is a Box Office and Why Does It Matter?

The box office, a term that has been around for centuries, is more than just a place where you buy your movie tickets. It’s a gateway to the heart of entertainment, a barometer of public taste, and a financial lifeline for filmmakers and studios alike.

Origins and Evolution

The concept of a box office dates back to 16th-century London theaters, where it was simply a place where tickets were sold. But as the film industry grew in the early 20th century, so did the importance of tracking these sales. By 1904, total ticket sales had been referred to as ‘box office’ figures, and from there, the term has evolved into an integral part of the movie business.

Domestic vs. Foreign Markets

In the film industry, box office figures are divided between domestic (US & Canada) and foreign markets. The weekend box office is a significant component of weekly gross, with the opening weekend often widely reported. This is because the first few days can set the tone for how well a movie will perform over its entire run.

Theater Releases

Theaters refer to the number of theaters showing a movie, which can be used to classify releases as wide or limited. A wide release means the film is shown in many theaters across the country, while a limited release targets specific areas or niche audiences. The choice between these two strategies often depends on the film’s budget and marketing goals.

Revenue Distribution

Distributors receive a percentage of revenue after deducting a ‘house allowance’ or ‘house nut,’ with their share referred to as ‘distributor rentals.’ Gross earnings refer to total box office income. The ratio of total gross to opening weekend gross is called the ‘multiple,’ which can be a key indicator of a film’s success.

Tracking and Reporting

There are numerous websites monitoring box office receipts, such as Box Office Mojo, which estimates ticket sales by dividing domestic box office gross by average ticket price. Inflation adjustment methods include using estimated number of tickets sold multiplied by average ticket price or adjusting for the cost of living index (CPI).

A Historical Perspective

From 1922 to today, the way we track and report box office figures has changed significantly. Variety started reporting box office results in 1922, initially focusing on key cities like New York City and Chicago. By 1946, they were publishing a weekly National Box Office survey based on the performance of movies in 25 key U.S. cities.

Modern Tracking

In the late 1960s, Variety used an IBM 360 computer to collate grosses from up to 800 theaters representing around one-third of the total U.S. box office grosses. By 1974, Nat Fellman founded Exhibitor Relations Co., which began tracking box office grosses and collecting data from studios.

Public Availability

In 1998, Brandon Gray launched Box Office Mojo, providing publicly available box office data online. In July 2008, it was purchased by Amazon.com through its subsidiary IMDb. Rentrak started tracking box office data in 2001 and acquired Nielsen EDI in December 2009 for $15 million.

Impact of the Pandemic

The average ticket price (ATP) is calculated as total revenues divided by the number of feature film tickets sold during the year. Box-office figures are reported in gross receipts or distributor rentals, with the latter being especially true of older films. Distributor rentals averaged 30-40% when distributors owned theater chains, equating to over a third of gross revenue paid to the distributor.

As we look back on the evolution of box office tracking and reporting, it’s clear that this industry has undergone significant changes. From manual calculations in the early days to sophisticated computer systems today, the way we measure success at the box office continues to adapt with technology and market demands.