This week you probably read headlines to the effect of, Hollywood has biggest box office year ever.
That’s technically true if you are counting gross domestic revenue, and you don’t adjust for inflation.
Bloomberg digs into the numbers.
Turns out, gross domestic revenue (US and Canada) was up 4 percent from last year to $9.6 billion.
One, that doesn’t adjust for inflation.
Two, that doesn’t adjust for an aggregate 4.6 percent rise in ticket prices.
Some of that rise in ticket prices can be attributed to keeping up with inflation, but not all of it.
Three, ticket sales tell a different story.
About 1.41 billion tickets were sold this year, about the same number as last year.However, in 2002, 1.61 billion tickets were sold.
So, ticket sales are down 12% over the last 5 years.
The big macro story is that once upon a time, most Americans routinely went to the movies. Today, only a minority do. And that minority continues to shrink.
From here on out, Hollywood can — and will — continue to raise ticket prices to offset shrinking audiences. But that will presumably just cause the audiences to shrink faster.