Is An Oscars campaign a good investment?

Sascha: [00:00:02] From Equity Mates media, this is the dive, I'm your host, Sascha Kelly. It's one of my favourite times of year. It's awards season for the cinema. and a tradition is the Oscars award campaign when it all builds two and one of the worst kept secrets in all of show business. While they're technically not allowed, most studios do them and they do it in a big way, as in big investments made up to $15 million. Show me the money. It's Monday, the 28th of March, and today I want to know why are the studios investing such big money here? Are these Oscars campaigns good investments? And if they are? Who is seeing the return on the king of the world? To help me talk about this topic, I'm really excited to get into this one today. I'm welcoming my colleague Darcy Cordell. Darcy: [00:00:58] Thanks, Sascha. Sascha: [00:01:00] All right. Well, you don't need to convince me I'm really excited, but do give me a bit of background about why we're talking about the Oscars today. Darcy: [00:01:08] They've just finished as we drop this episode here, Sascha. Sascha: [00:01:11] So as we're recording, it's happening live. Darcy: [00:01:14] Exactly right. It's the night of nights for the film industry. There's up to 30 million people worldwide who tune in to watch. Sascha: [00:01:20] Well, I'm one of them. I think Zendaya in particular, looks awesome on the red carpet this year. So tell me about what I introduce at the beginning. These Oscars campaigns, the studios leading these campaigns to try and snag key awards for particular actors and actresses. Darcy: [00:01:37] Yeah. So in the movie business, you're supposed to be all about the art, right? Lobbying for votes is more than looked down upon. In fact, it's actually disallowed by the Academy of Motion Picture Arts and Sciences Speaker 3: [00:01:49] and the Oscar goes to. Darcy: [00:01:51] But it's all a facade. Leonardo DiCaprio, one of the worst kept secrets of the past 20 years in Hollywood is that studios spend millions on campaigns to win the big awards. There are strategists and consultants that specialise in this practise. It's the arts version of a presidential campaign, and Vanity Fair thinks it can point to the moment this campaign strategy and the ads they credit Harvey Weinstein and Miramax Pictures and their bid for Shakespeare in love. Back in 1999, Sascha: [00:02:24] have you seen it, Darcy? Darcy: [00:02:25] I haven't, Sascha. Sascha: [00:02:26] Oh, you've got to put it on the list. It is a true romantic comedy. Classic Lips Oh, Trespass Weekly urged. Give me my just fantastic movie. Darcy: [00:02:36] Well, I can tell you that Spielberg's Saving Private Ryan was a clear favourite to take home the award that year. I have my orders to sir. They don't include me abandoning my post. Sascha: [00:02:45] I understand that, and you would say that Saving Private Ryan is Oscar shoe-in and Shakespeare in love. I've always been shocked that it was an Oscar Darcy: [00:02:53] winner, a shoo in, Sascha. But Weinstein funded an aggressive campaign to effectively rob the Oscar from Spielberg. What's more, it worked how he outspent the other contenders, allegedly dropping $5 million on the campaign where the major competitors at that time would spend between two hundred and fifty thousand to two million at most. He was the pioneer of the modern day Oscars campaign. Changing it forever? Sascha: [00:03:18] OK, so that seems like it was a pivotal moment in the direction of the Oscar campaign. Can you tell me about what the cost of a modern Oscar campaign looks like? Darcy: [00:03:27] Sure. So there's examples of production companies spending just as much on the campaign and the film itself. You've got to spend money if you want to win an Oscar. Sascha: [00:03:35] Go to spend money to make money. Darcy: [00:03:37] Yeah, you need ads, events and just general hot to help people visualise your film as an Oscar winner in 2016. Variety estimated that studios spend anywhere from three million to 10 million to lobby Oscar votes. In 2017, the New Yorker revised that estimate to 15 million. Some quick maths 53 films have at least one nomination this year. Fifty three nominees, 53 campaigns, even at the low estimate of three million dollars per campaign. That means over $150 million is spent every year. The nominees are. Sascha: [00:04:12] I said before, as a bit of a joke, you've got to spend money to make money, but do they work? Is this a good investment? Am I seeing an hour? Why do Darcy: [00:04:21] they work? Yes, for the films and actors that win them. But are they a good investment? I'm not quite sure. Let's look at South Korean film Parasite, and the Oscar goes as an example of how valuable an Oscar nomination or win can be. Parasite. It was the eventual winner of the 2020 Best Picture Oscar. Did you watch the film settle? Sascha: [00:04:41] I did. I saw it in the cinema, but mostly through my fingers. Okay, I heard that there was a bit of a scary bit and I was on the edge of my seat the whole time. But it's a fantastic film. You have to see it. Darcy: [00:04:52] It is. I've actually say this one. Sascha: [00:04:53] Oh, good, okay. So I shouldn't have judged. Tell me a bit more about Parasite. Darcy: [00:04:58] So Parasite's Oscar campaign was reported to be between four and $5 million. Their post Oscar nomination bump is considered to be one of the biggest. The weekend after the film was released, box office numbers jumped 79 per cent to $1.7 million in ticket sales before the Oscar nomination. The movie had grossed 33 million. In the end, its total box office was 263 million. 87 per cent of that box office came after the nomination, but Parasite appears to be the exception, not the rule. Sascha: [00:05:30] Oh, that's intriguing. Tell me a little bit about some of these other examples, then. Darcy: [00:05:35] So 1917, your orders are to deliver a message saying I won. Sascha: [00:05:39] Yes, loved it. Darcy: [00:05:40] Great film that grossed three hundred and eighty five million at the box office, but almost 40 per cent of that was pre nomination. Green Book grossed three hundred and twenty two million at box office, but that was fifty. Pre and post nominations split. Sascha: [00:05:54] OK, so what does that tell us about it? Darcy: [00:05:56] So the big blockbuster movies, they don't get a massive bump from an Oscar nomination, but we do see some uplift in smaller movies. Sascha: [00:06:04] All right. And what are some of those ones? Darcy: [00:06:06] One of these is room. The film grossed 36 million at the box office, but 35 percent of that was prior nominations, so we saw a pretty big uplift post Oscar. The Hurt Locker, winner of Best Picture in 2009, gross forty nine million at the box office. But while executives didn't say a big increase in box office sales, they did say a doubling of DVD sales. Sascha: [00:06:28] So tell me about this year's Best Picture nominations. Darcy: [00:06:32] So the weekend after nominations were released for this year, none of the Best Picture nominees grossed over a million in theatres, which Sascha: [00:06:39] we've seen previously. Darcy: [00:06:41] We have the top two were liquorice pizza that grossed nine hundred twenty three thousand oh, so Sascha: [00:06:46] close, but was Darcy: [00:06:48] that? But Belfast grossed just two hundred and eighty five thousand. Sascha: [00:06:51] Oh, that must have been disappointing. Darcy: [00:06:53] Yeah, long way to go to the million. If these studios had spent millions on a campaign, it doesn't look like they're getting much of a return on the investment. Sascha: [00:07:01] I mean, we should take into account that the cinema going landscape has changed dramatically in the last few years. But the picture you're painting for me, Darcy is a little bit of a mixed bag. Obviously, these studios wouldn't be putting money into the Oscar campaigns if they didn't see some kind of return down the track. But perhaps what I'm getting here is that it's not an immediate return on investment. It's maybe about attracting big actors and directors for the prestige and the cachet to work with them on the next movie. So let's dive into that Unidentified: [00:07:36] after the Bryce. Sascha: [00:07:43] Before the break, we talked about the investment studios are willing to make in order to secure an Oscar for their films, but it's not just the individual films that benefit. Who else benefits from the big money spent on these campaigns? Darcy: [00:07:58] Let's take the most nominated film of this year Power of the Dog. It's just a man. Netflix's campaign is focussed on the movie, but everyone involved does benefit. So the actors Benedict Cumberbatch, Kirsten Dunst and the rest of the cast Jane Campion, the director, Netflix as a business benefits, these campaigns affect all stakeholders. But Sacha, I do say, affect rather than help deliberately. It can be a bit of a mixed bag Sascha: [00:08:28] that's very intriguing that you say that, Darcy. Can you expand on that and tell me why you're using those words deliberately? Darcy: [00:08:35] Well, Sacha, when it comes to the actors and actresses that have won an Oscar, there's always been a rumour of an Oscars jinx. Kim Basinger, Timothy Hutton, Halle Berry and most famously, Cuba Gooding Jr. So their careers decline immediately after their wins. On the other hand, there's the Oscars bump, which is exactly what it sounds like. The individual winners see a big bump in their earnings potential. It makes a lot of sense the prestige of an Oscar. The fact that every movie ad can now put Academy Award winner before the person's name adds a lot of value. So it's a hard one to find a tangible answer for. Sascha: [00:09:13] I'd read about the Oscars jinx before, so it's amazing when you kind of line them all up back to back. And it's also not like the Oscar itself is worth much when we're researching this. You told me this amazing fact that the statue itself is only worth a dollar, and there's a written policy that says that winners can't sell the Oscar on without first offering it back to the academy for a dollar, so they can't even auction it off if their fortunes have changed in 20 years time. And isn't it? I know it's absolutely amazing. So the perceived PR, as you said, paints a bit of a mixed bag to wildly different views on the value of an Oscar. What does academic research say? Does it support one theory or the other? Darcy: [00:09:56] It does, and it reveals a pretty stark statistic. It's clear that there is an Oscars bump, but it's also clear that there is a meaningful gender pay gap in this Oscars. Sascha: [00:10:05] But every woman who gave birth. It's our time to have wage equality once and for all. Darcy: [00:10:11] And according to an honours thesis by a student at Colgate University. Male actors see a far more substantial salary increase after winning an Oscar compared to their female counterparts. The study found that a male winner's salary increased by 81 percent, holding all other variables constant compared to female winners that didn't experience any statistically significant effect on their salaries. A second study by analyst Steven Follows found that the average salary increase for best actor was US $3.9 million, while the best actress only saw a $500000 high. Pretty stark differences Speaker 3: [00:10:50] that female films with women at the centre are niche experiences. They are not. Audiences want to see them and in fact, they earn money. So. Sascha: [00:11:03] So turning to these parent companies, because you talked with the power of the dog about Netflix being one of the beneficiaries to Oscar nominations or Oscar wins matter to these parent companies. Darcy: [00:11:14] When we're talking about the big parent companies, they don't really have much impact. So let's put it in context here. Netflix and Disney are two of the biggest production companies. Netflix is the challenger. Sascha: [00:11:26] Yeah, the underdog, because they've kind of only started to become a player in the last couple of years. Darcy: [00:11:31] Yeah, whereas Disney, they're the pre-eminent leader of the Oscars. They've got 135 Oscars across the years. Do you Sascha: [00:11:38] know what? I thought they would have had more than that because the Oscars have been going what, since the 20s? They have Darcy: [00:11:43] been. I think they've added a lot more awards in more recent years. But Walt Disney himself 142 Oscars. Sascha: [00:11:49] Oh, OK. That's extraordinary. That's huge. Darcy: [00:11:52] Yeah. Do you know Disney's highest ever grossing film, Sascha? Sascha: [00:11:55] I don't, but I'm guessing it's going to be one of the animated musicals. Darcy: [00:11:59] Very good. It's frozen, of course. Sascha: [00:12:01] Let it go. I mean, the streams alone for Let It Go must account for something. Darcy: [00:12:06] You're not wrong that they had 1.4 or $5 billion worth of sales from frozen. Pretty significant. But can you guess the total value of Disney? Sascha: [00:12:15] I'm sorry about estimating, but it's it's going to be in the billions. Darcy: [00:12:19] Two hundred and fifty three billion. Sascha: [00:12:21] OK, so this is chump change. Yeah, a company like Disney, and Darcy: [00:12:24] that's the biggest grossing film ever. So the average is far lower than that one point four or five billion. Netflix is in a similar boat. They're valued at over $165 million. Again, chump change. Although Sascha, an example of a short term positive bump from an Oscar, it's CGI entertainment, the company who made Parasite, as we talked about after winning an Oscar. Their share price did receive a six percent jump in the next day, but the stock is down 15 percent since. Sascha: [00:12:53] So they obviously just haven't found their next parasite. That's really what they've got to do back it up with another movie that's just as well received. Yeah. So you've pointed out that it really doesn't seem to make a huge difference to their bottom line. Why do these parent companies even bother with these Oscar campaigns? Darcy: [00:13:12] It's about the next movie. An Oscar nomination boost the prestige of these studios. It helps them attract the best talent and makes directors and producers more willing to work for them. Sascha: [00:13:23] So a bit like the example you said of entertainment. They obviously aren't a household name, haven't made the next parasite that's cut through again and and we're seeing that their share price is down 15 percent. Darcy: [00:13:34] Yeah, that's right. But they are better known now, and it tells talent that these companies are going to support them in their bid to win an Oscar. Think about Leo. When he was really trying to win that Oscar, Sascha: [00:13:46] he was robbed for the departed, in my personal opinion. That's one of my favourite movies. But I'm glad he eventually won for The Revenant, even though I don't think it was one of his best performances. I'm taking this podcast off onto a movie tangent, so we've started this episode about talking about the investment made in Oscar campaigns. Darcy put your movie studio executive hat on. Where are you going to put your money? Is it worth the investment? Darcy: [00:14:12] I'm going to say in simple money terms. No. Sascha: [00:14:15] Yes. So from a financial perspective, you don't really see the value. Darcy: [00:14:18] Yeah, but the Oscars are the highest honour for most in the film industry. It is hard to put a price on the personal value that these producers, directors, actors and other stakeholders take from the accolades. But this Sascha: [00:14:30] time I feel it, and I can't deny the fact that you like me right Darcy: [00:14:35] now, whether or not it's a bump or a jinx for your career. I do have to say Sacha nominees get what would probably have to be the best gift bag I've ever heard about. Sascha: [00:14:45] I love a good gift. Darcy: [00:14:47] So it's valued at up to two hundred and $15000 last year. The major gift was an all inclusive three night stay for two at Turin Castle in Scotland. This included a butler and fully personalised concierge service that sounds lovely. Some of the smaller gifts in the box, a range of edible things. Let's talk olive oil with gold flakes, a bath bomb with 24 karat gold, and a few years ago, a 12 day yachting holiday was offered. Sascha: [00:15:16] Not bad. I mean, I'm thinking that we need to lead a campaign to Bryce and Alec to fund a movie to get in the race. Maybe we can start with something like this. Sure. So best sound editing? I don't know. Darcy: [00:15:28] We cant do that Sascha. Remember campaigning is illegal? Sascha: [00:15:31] Oh, that's right. Sorry, if there's a story that you want us to talk about. Contact us at The dive at Equity Mates dot com, or follow us on all the social media channels. We love the weird and wonderful. So whatever suggestions you have. Well, welcome to them. All those details as normal in the show notes below. Remember as well, you can write and review us or send us to a friend who you think might enjoy the podcast and subscribe so that every time there's a new episode, you don't have to wait. You don't have to. 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