Hollywood’s awards season kicked into high gear with Tuesday’s Academy Awards nominations. For studios and distributors, a ticket to the big show means a lot more than a chance to walk the red carpet — it means the potential for big box office and a better chance of recouping costs in today’s more fragmented media landscape.
“Before the Oscar nominations are named, you will find that there are subtle and not-so-subtle efforts to get a film nominated through advertisements and other methods,” says Timothy Corrigan, a University of Pennsylvania English and cinema studies professor. “Once the nominations occur, if they have the money, the studio will go for it [in terms of investing in marketing] because winning an Oscar means money.”
Although this year’s winners won’t be announced until February 27, the boost from the nominations is already evident at the box office. According to The Hollywood Reporter, The King’s Speech — which leads in the nominations with 12 — saw its domestic receipts jump from $635,465 on Monday to $1.1 million on Tuesday, the day this year’s contenders were announced. That’s a 66% increase. Other Oscar front-runners saw similar upticks, with revenues for True Grit up 41% on Tuesday and The Fighter increasing by almost 46%, The Reporter said.
Meanwhile, the distributor of The King’s Speech, the Weinstein Co., is unleashing a new advertising campaign and even considering excising some of the rougher language from the film in order to rerelease it with a lower MPAA rating. Currently it’s rated R, but distributor Harvey Weinstein (known for his aggressive Oscar marketing campaigns — Chocolat anyone?) told the Los Angeles Times Company Town blog that a PG-13 or PG rating might be the gateway to a broader audience.
The “Oscar bump” isn’t limited to the run-up before the red carpet, however. The New York Times Carpetbagger blog reported data from research firm IBISWorld showing that the average Best Picture winner over the last four years experienced a 22.2% increase in revenue after being named a nominee and an additional 15.3% boon following a win on Oscar night.
“When you have a big blockbuster like [2010 Best Picture winner] Avatar that was already making millions of dollars, the profits from an Oscar are going to seem less extreme,” Corrigan points out. “If you’re talking about a smaller film, like one I loved that’s been nominated for four Oscars this year called Winter’s Bone, that’s a movie that an Oscar can do remarkable things for in terms of its continued life in theaters and beyond.”
And it’s the beyond part of that equation that might mean more to Hollywood than the immediate gratification of a box office boost. “Theatrical distribution for most movies is not bringing in large portions of their profits, and so getting a movie theatrically released with good reviews, from one very convincing point of view, is just a way to promote sales on DVD, video, on-demand, Netflix and so on,” Corrigan notes. “What Oscars do is simply add tremendous icing on that promotional cake.”
In a recent interview with Knowledge@Wharton, filmmaker James Kerwin shared similar thoughts. “If you’re making a $200 million blockbuster, the studio is going to put everything they can behind it, advertisements will be all over the place and you’re going to make money on DVD sales,” Kerwin told K@W. “With the theatrical box office, you’ll probably break even once the marketing costs are taken into account, even for huge films. But with DVD sales, you’re just making gold there.”
Low budget films are also easy to turn profitable because the upfront cost is so small, Kerwin added. “But there’s no real business model for a $200,000, $500,000, or even a million-dollar film. It cost too much to make its money back from a small amount of DVD sales, but it didn’t cost enough for a distributor to put a huge marketing campaign behind it.”
That’s what makes the Oscars such an important piece of the puzzle, Corrigan says. “With digital technology, anybody can make a movie and many people can make good movies, but the game is to get it seen. That’s where the struggle is and that’s where marketing comes in and it’s everything from the Oscars to the kind of [MPAA] rating you attract.”