Ask The Experts – The Economics of Oscar Season

February 27, 2014

by John S Kiernan, WalletHub on February 26, 2014

Movie-goers are usually in for a treat when winter rolls around. It’s Oscar Season, after all, and big studios are busy lobbying for the inclusion of their films in the discussion for an Academy Award. Prestige obviously is a driving factor in all of the Oscar hoopla, but it’s dollar signs that studio execs, agents, actors, writers, producers, and directors see when they look at that iconic gold statuette (officially known as the Academy Award of Merit).

Winning an Academy Award – or even being nominated – can greatly help a studio’s bottom line and make the careers of industry professionals. But you’ve got to spend money to make money, and millions of dollars are invested in the Oscar selection process each year.

Kathryn Arnold, “The studios look at the Oscar season as a marketing bonanza for their films that receive good to excellent reviews during their initial release.  The Oscar race tends to bode well for character and story driven films such as ‘Gravity,’ ‘Captain Phillips’ and ‘American Hustle’ which benefit from Oscar contention word of mouth.

The amount of money spent on lobbying efforts by the studios depends on the film and the competition in their category.  When studios are going head to head in an Oscar race, they can spend up to $8-10 million dollars.  And that can be money well spent, as Oscar nominations help extend the theatrical life of a film (thus adding to box office revenues,) and also significantly increase DVD/VOD dollars as well.”

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