The Worth of an Oscar

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From Newsweek...

By Chadwick Matlin and Chris Wilson

About a month ago, the studio behind Frost/Nixon blitzed the Hollywood trade papers with ads for the movie. Within two weeks, according to Oscar wonk David Carr, Variety ran five full-page ads for Frost/Nixon. If we're reading Variety's ad-rate card correctly, Universal Studios blew at least $72,000 for each of those ads—more than $350,000 total, not to mention the four front-pagers for Frost/Nixon that ran in the Hollywood Reporter. This outlay, of course, was a small pittance compared with the advertising campaign mounted on TV, radio, and the Internet. All of this to reach the academy—a group of 5,810 people who control the fate of the industry's pinnacle of achievement: the Oscar.

On Thursday morning, all those ads appeared to pay off for Universal. Frost/Nixon was nominated alongside four other films for best picture. The other nominees—Slumdog Millionaire, The Reader, The Curious Case of Benjamin Button, and Milk—all spent lavishly on their own campaigns. But so did a host of other movies—Gran Torino, The Dark Knight, Wall-E—that fell short of the cherished best picture nomination.

These campaigns aren't cheap. Estimates put the cost at tens of millions of dollars, which is especially glaring when you consider that for some of these films, advertising budgets are right up there with production costs. Yet nobody seems to question whether it's worth all the trouble in the first place. Even if a movie is lucky enough to get a best picture nod, does it really justify the campaigning expense it took to secure the nomination? How much money, exactly, is a best picture nomination worth at the box office, anyway?

We'll get to how we calculated that in a moment; first, let's explain the less quantitative force at play: buzz. When a movie is nominated for best picture, it extends its stay both in theaters and in the public consciousness for at least another month. (The awards ceremony is usually about a month after nominations are announced.) That means more late-night talk show interviews, more profile pieces about what an actor is really like when the cameras stop, and more willingness from mainstream theaters to play an art-house film.

It's a crucial truism: The more theaters that are willing to play your movie, the more money it can make. Many pictures time their wide release campaign around the Oscar nominations to capitalize on the buzz as much as possible. Million Dollar Baby added 1,863 theaters to its reach the weekend after it was nominated. This year, Slumdog Millionaire is trying this strategy. After the nominations were announced on ABC, the first commercial was for Slumdog. At the end of the spot, the narrator promised it would open in wide release Friday. Despite what the movie would suggest, that kind of timing isn't fate; it's shrewd marketing.

Others ramp up their theater count as buzz builds around who is going to get the nomination in the first place. Atonement, for example, picked up 700 theaters in 2008 by the time nominations were announced. Infamously, Dreamgirls tried to do this but got snubbed by the academy and saw its per-theater gross plummet. Instead of expanding into noisy buzz, Dreamgirls found itself singing into the vacuum. And still others, like Babel, return to wide-release post-nomination—already having been in wide-release earlier in their life cycles.

All of these movies share a common trait: the desire to last as long as possible in the box office, to keep raking in money before the DVD sales portion of a movie's life begins. (The nomination's effects on DVD sales is an explanation for another time.) A best picture nomination is the equivalent of cinematic Viagra: If your box office stamina lasts longer than four weeks, please consult a physician.

The stamina is relative to the movies that didn't make the best picture cut. By the time the Oscar nominations come around, all movies have been out for at least four weeks, since they had to have debuted in the previous calendar year. Many movies (e.g., Little Miss Sunshine, The Queen, The Squid and the Whale) have been out far longer. Those are the ones that most need that extra jolt to stick around a bit longer and make more money. Since that jolt comes most often from best picture nominations, we were most interested in comparing best picture nominees with all the other movies that could have benefited from the top nomination but fell short.

And that's how we got to $6,663,508. We culled data from the dozens of movies over the past four years that were in the thick of the Oscar race come January. We've separated the movies into two categories: "Best Pictures," for those that got the nomination, and "Movies That Mattered," an admittedly subjective classification based on whether movies were rumored to be in the running for best picture at some point in their lifespan or whether they received marquee Oscar nominations in other categories. To measure the effect of a best picture nomination, we looked at the weekend box-office data for the four weeks before and after the nominations were announced, focusing on three important metrics: total gross per weekend, number of theaters where the movie was playing, and average gross per theater. You can see the results in a monstrous spreadsheet here.

The $6,663,508 number represents the average extra money made by best picture nominees compared with the regular Movies That Mattered. Because of the way we calculated the figure, it applies only to the four or so weeks between the nomination and the awards ceremony. Obviously, there are other benefits after the Oscars—DVD sales, namely—but after the ceremony, too many other factors come into play for us to make an adequate calculation.

We arrived at the number by calculating the cumulative net gain of best picture nominees in the four weeks after the nomination announcement compared with the four weeks before the nominations. Those movies net, on average, $1,195,019 more in the post-nomination four weeks than in the pre-nomination four weeks. MTMs make, on average, $5,468,489 less in post-nomination weeks than beforehand, representing the natural decline in ticket sales as a movie lingers in theaters. Combine those figures, and you get $6,663,508.

(A quick caveat: There are plenty of outliers in our data. Hotel Rwanda, for example, was an MTM that got snubbed for best picture but still made $3.8 million more after the nomination than it did before. The box office has many variables and forces tugging at it, but on average best picture nominees do $6,663,508 better than MTMs.)

This year, the benefit may be even larger than $6,663,508. As mentioned, Slumdog Millionaire has not been in wide release yet. Nor have The Reader, Milk, and Frost/Nixon, which can now expand beyond art houses, thanks to the best picture nod, and really start raking in the cash. Remember, the more theaters, the more money. Benjamin Button looks to be the only movie that has already reached as many theaters as it can, even with the nomination. If you ignore Brad Pitt, it seems that all of the best picture ad campaigns were well worth it this year.