February is finally upon us, which means we are just weeks away from the Oscars. All nominees have been announced, and movie marketing goes into overdrive as studios attempt to convince Academy voters why their film should be walking away with one (or maybe 10) of the 24 statuettes, standing at 13.5 inches tall, weighing 8.5 lbs, and going by the name of Oscar. Studios spend huge amounts of money to promote their films, firstly to gain the nomination, and then for the final drive to persuade the voters to give their film the nod. Current estimates have studios spending upwards of $20 million on their Oscar promotional budget, but where is the money spent, who benefits from an Oscar win, and is the budget ultimately a worthy investment?
Swaying The Voters
With a promotional budget often higher than the cost of making the film in the first place, the studios attempt to swing voters in a number of ways
- screening the film – clearly an important step, this currently takes the form of private screenings, mailing “for your consideration” preview DVDs, and VOD streaming links
- direct marketing – studios will mail promotional materials, gifts, and anything that introduces some form of originality, directly to the voters’ residences. Cynics may call this bribing the voters. Cynics would be correct…
- industry advertising – everything from billboards to magazines, industry websites to TV spots – anything to make the film visible wherever the voters go
- PR – this is where things get juicy – not only do studios ensure that actors and directors involved in their film attend various galas, ceremonies, and award shows, but a large amount of money is paid to lobbyists to hound the press, and at times to cast negative assertions about other contending films
One of the main beneficiaries of a film picking up Oscars is the talent being honored. Those nominated in the acting categories, directors, cinematographers etc all benefit enormously from winning an award, and all without lifting much of a finger when it comes to a budget spend. After already being paid, modestly or handsomely, to appear in a film, the studios’ push for Oscar nominations includes pushing for the talent involved to be considered. Winning an acting Oscar can mean a huge boost in the actor’s salary demands, especially for younger actors at the beginning of their careers who could see a large increase in what they are paid for future films – consider Jennifer Lawrence, with just an Oscar nomination for “Winter’s Bone” in 2010 where she was paid scale rate of $3000/week – she jumped to $250,000 for “X: First Class” (2011) the following year, $1 million for “The Hunger Games” (2012), and $10 million for “The Hunger Games: Catching Fire” (2013).
Studios crave Oscars, probably second only to them craving money. Part of their craving Oscars is of course because it leads to more money. Oscar-winning movies that have limited releases in the November/December timeframe see a big upswing in ticket sales once they have those statuettes in hand, and even films that had a general release see spikes in their ticket sales, although maybe only to the tune of $2 million or so. One of the more unknown factors is how much winning the Oscar means to a studio moving forward with other productions. For smaller studios, taking home wins can be massively important, and push the studio to bigger and better futures, with bigger and better budgets. The likes of A24 and Blumhouse Productions have seen enormous growth in recent years as their films pique the interest of the major film festivals (Blumhouse’s “Get Out” won one of its 4 Oscar nominations last year, when Jordan Peele became the first African American to win the Oscar for Best Original Screenplay.) But for bigger studios, the Oscar effect can be hidden beneath their behemoth stature, so this certainly becomes an X-factor in the value of a win. And speaking of X-factors, we now have to consider the new kid on the block…
Ohhhh how the industry does not know how to deal with the streaming giant. The 2019 Oscars sees the first ever Best Picture nomination for a Netflix film, in the glorious black and white form of Alfonso Cuarón’s, “Roma”. Oscar rules state that for a film to be eligible (except for the Best Foreign Language Film, Documentary Feature, Documentary Short Subject), a film must have played for seven consecutive days in the previous calendar year in a theater in Los Angeles, CA. This has ruled Netflix films out in the past, as their films have often been released solely streaming. Not one to want to sit in the background, Netflix released a number of its original films this year in theaters on limited release either before or at the same time they hit their streaming platform with Roma and The Ballad of Buster Scruggs picking up 13 of Netflix’s 15 nominations this year.
They also created history with Alfonso Cuarón becoming the first filmmaker to be nominated for Best Picture, Director, and Cinematography. “Roma” was also just the 5th film in Oscar history to be nominated in both the Best Picture category and Best Foreign Language Film – none of the previous films won Best Picture. If “Roma” does pull off the Best Picture win, it will be the first foreign language film to ever win the award.
Netflix has gone all in on the marketing of “Roma” in the hopes of winning a first Best Picture award for themselves (estimates of a $25 million advertising budget), but so have the other studios – so why are they getting their own section here? Well, it’s because their “is it worth it?” quandry is quite unique. Sure, there is the same benefit to the talent as mentioned above, and in many ways the benefit to the studios outlined is similar – but with one caveat; subscribers. Success for Netflix means not only everything listed above, but it also means they should see a huge spike in their new subscription base. People want to see Oscar films, and the easiest way to see one of the leading contenders is to subscribe to Netflix. While the effect on their subscriber base is yet to be seen, it isn’t difficult to see how their investment in “Roma” could produce a lucrative return. Netflix added 8.8 million global subscribers in Q4 2018 – if we take a modest Oscar spike of 25% in new subscribers for Q1, this would equate to at least an additional 2.2 million new subscribers or around $60 million in the quarter – a healthy return on their investment. This is, of course, a splash in the ocean when considering that in 2019, Netflix plans to spend $15 billion on its content, and will be very much back in the Oscar contention with original content like Martin Scorsese’s crime drama “The Irishman” starring Robert de Niro, and Steven Soderbergh’s “The Laundromat” with Meryl Streep and Gary Oldman.