We all know how important budgeting can be in today’s world. If movie productions have begun to employ legions of financial advisors, it is precisely to ensure that they limit expenditures and maximize profit. Some movies have gone even further, placing economists right in the limelight, like 2015’s The Big Short, which featured a brief cameo from UChicago behavioral economist Richard Thaler.
Though the film did gross nearly five times in initial budget, I think it’s doubtful that we’ll see Joseph Stiglitz donning a James Bond costume anytime soon (unfortunately). Yet one cannot deny the growing need for competent economic analysis when it comes to movie marketing. The Oscars in particular have become a particular source of interest in recent years. Indeed, how major of a financial boon is it to win an Oscar? Does interest in movies truly drastically change?
When talking about movies themselves, it’s pretty clear from statistical analyses that there is a pretty significant revenue boom when one wins an Oscar.
Consider the 2001 academic paper simply titled “what’s an Oscar worth?”. According to the authors, led by Prof. Randy A. Nelson of Colby College, winning the Oscar for Best Picture on average boosted box office sales by $18.1 million.
Some researchers, however, go in even more detail and consider the impact of each award, be it for a nomination or for a victory on movie revenues. BoxOfficeQuant, the internet’s most popular film statistics website, proposes the following chart.
As we can see, the win-vs-nomination bump for an Oscar is about $14 million dollars when considering the top prize. Similarly, much of the revenue bump obtained from a nomination reaps its benefits long before the awards ceremony, while the winner itself dominates the box office in the weeks following the victory. This is shown in the following chart by Edmund Helmer, the website’s founder.
As we see, while both winners and nominees receive a substantial bump from their nomination (which is the second peak in this V-looking graph), only winners keep earning substantially a month after the ceremony.
Interestingly though, it seems that though the bump is quite significant relative to the earnings of losing nominees, it remains low in the absolute. This is because the awards ceremony comes at the very end of a movie’s earning cycle, long after the summer and winter holiday periods of maximum gain. As Oscar-winning screenwriter Simon Beaufoy explains “a nomination is worth more than a win”.
Now, if nominations are worth more than wins since they come at a more profitable time of the year, could other award wins, particularly earlier ones, be worth more as well? This is precisely the contention Helmer makes in his Reuters article “Golden Globe win worth millions more than Oscar victory”. When factoring in a Golden Globe victories as a lurking variable in our analyses, Helmer explains that the value of a Golden Globe win goes up to around $14.2 million, while that of an Oscar nab plummets to a mere $3 million. In short, timing is essential not just in cinematography, but also in movie marketing.
Regarding the actors themselves, Oscar bumps are likely seen across careers, yet these are difficult to estimate due to the lack of widely available information regarding earnings, particularly following the Oscar win (as most winners tend to be already experienced actors). On this subject, it’s best to stick to Helmer’s advice and listen to Hollywood agents, who estimate that Oscar winners make 20% more on their next project.