By: Abbey Toureene
There is one night a year where millions of Americans gather around their televisions to stare in awe at the gowns, shoes, jewelry, and accessories worth more than the average car, wait in agony with their fingers crossed in hope that their favorite film wins Best Picture, and laugh hysterically at the strategically chosen host to guide every viewer through this marvelous night. This grand event could be none other than the Oscar’s. The first Oscar’s was held in 1929 on May 16th at the Hollywood Roosevelt Hotel. There were 270 people at this premiering event at guest tickets costing only $5. Today, the cost to simply put on the production comes to an average of over $30 million, with each actual oscar figurine costing $900 to manufacture. Considering the 50 plus winners each year, the statuettes cost alone comes out to be around
$45,000. As the cost to put on the Oscar’s increases every year, the Academy Awards transforms into an even greater extravaganza. While the shimmering dresses and grand entrances are what catch millions of Americans’ eyes , the economic contribution of this event are all the more astonishing.
The Oscar’s holds more power in the economic world than one would expect. Natalie Butz, an economist said in her blog that “it completely changes which movies the American public sees, whether or not a studio stays in business, and which films will be remembered. It's called the ‘Oscar Bump’ and it's a force to be reckoned with.” The Oscar Bump is the influence the Oscar nominations and awards have on ticket sales for movies shown in theatres. The amount of increase on ticket sales and DVD purchases prior to only receiving a nomination is already impressive but then after winning the award, the numbers are incredible. The movie
industry brings 30 to 35 billion dollars per year into the American economy. With this significantly
high amount of money, this economic effect proves to be very effective in America’s economy
today.
The chart above shows the impact of receiving a nomination or award on ticket sales for the most prominent movies of 6 different time periods. The popularity and significance of these movies that still exist today can be directly correlated with their promotion through the Oscar’s. As seen in the chart, in 1998 the film Shakespeare in Love doubled in revenue just after its nomination and then continued to increase by a significant amount after winning an Academy Award. The King’s Speech also doubled in ticket sales from the time it was awarded an Oscar and left the theatres while the largest increase in revenue was by the film Slumdog Millionaire which received nearly a $100 million increase in revenue after its nomination and Oscar award. No matter the popularity of the movie prior to the Oscar’s promotional effects, there is nothing
but beneficial outcomes for these films after being recognized by the Oscar’s. An already thriving film will do nothing but increase in revenue and extend its showing time and theatres while a lesser known film will quickly spread across the nation in popularity.
The chart above illustrates the new predicted information economists can predict after years of studying the aftermath of the Oscar’s. Economists can now predict the increase in revenue a movie will receive depending on which award they are nominated for or are granted. Although the Oscar’s may sometimes only seem valuable for a night of entertainment, an escape from reality, or an excuse for hundreds of talk shows to discuss ridiculously expensive dresses for weeks after the event, its effect on the American economy is astounding especially when considering the movie industry. So next time you watch the Oscar’s, instead of thinking like any American would and allowing yourself to be hypnotized by the newest bizarre fashion or
trends, think like an economist and predict what outcomes the nominations and awards may
bring!
Works Cited
"Economists Do It With Models."Economists Do It With Models RSS. N.p., n.d. Web. 3 Mar. 2014.
<http://www.economistsdoitwithmodels.com/2012/02/27/when-economists-watch-the-oscars/>.
"History of the Academy Awards | Academy of Motion Picture Arts & Sciences." History of the Academy
Awards | Academy of Motion Picture Arts & Sciences. N.p., n.d. Web. 3 Mar. 2014.
<https://www.oscars.org/awards/academyawards/about/history.html>.
"The Economics Of the Oscars, In Two Quick and Easy Charts." PolicyMic. N.p., n.d. Web. 3 Mar. 2014.
<http://www.policymic.com/articles/79143/the-economics-of-the-oscars-in-two-quick-and-easy-chart
This was a unique perspective to analyze the Oscars through this economist lens. I thought it was great to contrast the effects that the Oscars has on popularity and thus the revenue of movies. I think it would have been interesting though to analyze the externalities of the Oscars. The immediate effects were mentioned in a really great matter and the direct costs as well. This was a really interesting piece to read and see how such a well-known event can transform an economy.
ReplyDeleteIt is pretty crazy to think about how much money the Oscar's cost but at the same time, how much money these movies accumulate from people wanting to watch them. The stat that you mentioned about the Oscar trophies costing $900 a piece to manufacture seems like such an extremely high number. They definitely spend a ton of money every single year to put on such a show for the audience, and they easily make that money back from people watching the movies and such. The movie industry has such a huge impact on our economy and it always will.
ReplyDeleteI thought it was interesting that best art design is supposed to reel in over $12,000,000 for the box office. This explains why many colleges insist that graphical design is supposed to become a booming field of enployment. Consumer tastes and expectations continue to demand better and better graphics and special effects, while we expect the A-list actors and actresses to remain constant. I'm still waiting on Leonardo DeCaprio's long-awaited Oscar award...
ReplyDeleteAbbey, I love that you wrote about this topic! The Oscars is something that most people can easily relate to; I know that I can! You brought up a good point that the Oscars change opinions of different movies. If the Oscars deem a movie good, the sales for that movie would increase substantially because people think it is better quality. Same goes for if a movie is looked badly upon at the Oscars or does not win. This is a great thing to consider because the Oscars can either make or break the sales for movies! Great Job!
ReplyDeleteAbbey this was a very interesting topic to choose! I definitely did not take into consideration how much it cost to put together such an elegant event when watching the Oscars but after the pizza delivery guy made over $1,000 in tips that night, it goes to show this was not a cheap affair. It was interesting to see how the cost of the Oscars has evolved, from $5 original tickets to $900 statues today. Your statistics and graphs really helped demonstrate all the factors that contribute to the $30 million production. Between the Grammys, the Oscars, and all the various movie and music awards shows, I wonder how much money is spent each year on these events and the dramatic impact they all have on our economy as a whole.
ReplyDeleteThis was a very interesting way to look at the Oscar's! You are correct; people get so caught up in the glitz and the glam of the evening they forget to consider how large of an impact the Oscar's actually have! The fact that ticket/DVD sales have the chance to double just because of an award is surprising, yet amazing as well. Though a ton of people watch the Oscar’s, I still can’t believe that the production of the Oscar’s cost over $30 million. Great job with looking at something from a different perspective!
ReplyDeleteIt truly is incredible the amount of revenue the Oscar's brings into the American economy from movie ticket sales to ticket sales for the show itself. What fascinates me more than anything is that years ago it cost only $5 to get a ticket to the Oscar's and now the total price spent on the production has reached billions of dollars. While many people do not appreciate the ridiculous amount of dollars spent on attire and setting on this one night, the amount of income made by theaters and DVD companies the day after the Oscar's is unbelievably influential and makes the glitz and glam all worth it in the end result.
ReplyDeleteI never really considered the benefits of the Oscars, but now I think about it, it makes perfect sense for the movie industry to benefit from it. It rewards both Oscar winners and the company that made the movie they were nominated for in the first place. It's a huge chunk of change that eventually gets back around to the industry, sort of an investment in a way. As a side note, I read that plaques for the Oscars are made way in advance and one plaque is made for each nominee, and once winners are decided, one plaque with the winners name is used and the others are shelved.
ReplyDeleteI always knew the Oscar's must be expensive but I had no idea how expensive! The amount of money put into the making of the Oscar trophies gives a brief glimpse at the sheer amount of money spent to put on one night. Also the celebrities that spend ridiculous amounts of money on the attire for the night must pump millions and millions of dollars back into the economy. The point you made about the movie ratings going up is a very good point and I see how the amount of money the Oscars generates outweighs the amount of money spent. Great article!
ReplyDeleteI had never thought of the Oscars as anything more than a publicity stunt to get more Americans to watch television during prime time, but this really changes my perspective. Not only would it increase ticket sales to huge blockbuster films, it would also increase membership in companies like Netflix. Despite putting on an elaborate and superfluously edited television broadcast at the expense of the American taxpayers, a negative externality, the revenue created from our movie industry makes up for that significantly. Whatever helps the economy is definitely a plus in my book.
ReplyDeleteI am very glad that you made this your blog post. I had no idea that the one 3 hour show would mean so much to the worlds economy. I also watch this to watch to see how funny it will be with this year Ellen hosting it I knew it would be good and my expectations were met. But no thinking about it after I did watch the Oscars I wanted to go out and see some of the movies that won and I also wanted to re-watch some on the movies that did win to which would make me a stereotypical viewer just like the other millions. I just can get over how much money it costs to make all the trophies $45,000 that is the price of a really nice car!
ReplyDeleteI loved this topic! I had no idea that it cost so much to put on the Oscar's. I assumed the statuettes would be a ton of money since they are just for the Oscar's and its a trademark and the company making them is able to price them at whatever they want. It is fascinating to know that in the past 85 years, this fun and glamorous activity has evolved so much. I had no idea that just for a film being nominated, the amount of of movies bought increased by so much! I guess it's a good way to get people to spend money.
ReplyDeleteLooking at this through an economics view is very interesting! My sister, my dad, and I always decide which outfit looks nicest, and we rank the dresses not even taking into consideration how expensive they all are. While it is simply viewer entertainment to us, it is one of the most important days for entertainment's economy. Because our opinions are swayed by which movies win awards, awards result in increased demand of a movie. Demand and consumer desires determine price. Therefore, we shouldn't be rooting for our favorite movie to win because that will only result in an increase in price of its DVD when it goes on sale. This was well written and gave me a different view on publicity and its effect on economy.
ReplyDeleteIt is interesting to consider the effect the Oscars have upon a consumer’s decision when deciding to go to the movie theater or even buy the DVD. Although, luxuries such as DVD’s and going to the movies are elastic, people still decide to spend their money on them, thanks to the advertising from events such as the Oscar’s. For example, you mentioned how the Shakespeare film doubled in profit after being nominated. This increase in demand can be explained by the new fad, everyone wants to see the movie and be a part of the discussion, therefore the demand increases.
ReplyDeleteThis was a very interesting and relatable post for me to read and I really liked it! I had somewhat of an idea of the increase in popularity movies and stars received from being recognized, however I had no idea that it was this significant. It's also crazy to think that these movies that are being made strictly for entertainment have such a large impact on our economy. I was not aware that movies brought that much money back into the economy, and I definitely wasn't aware that the Oscar's is one of the main reasons for this. This makes me wonder how much money other large entertainment industries are bringing into the economy. I can definitely see how important these shows are to the economy now.
ReplyDeleteI always figured that the Oscars would affect the sales of movies but i never thought about hoe much it effected it! I usually watch the movies that are shown as the "best pictures" after the Oscars so i know which movies are worth looking at, but this also made me think about how some companies like Netflix get a boost as well.
ReplyDeleteFirst thing I noticed was the supporting actress award has a negative value to it. Why is this? what makes this award make the movie less demanding? I actually thought it cost more than 900$ to make an Oscar award. Just looking at all the numbers, this one show puts so much into the economy both by itself, and the stimulation is causes in the theater market.
ReplyDeleteI never imagined it would cost so much to put on the Oscars, and I wonder where they get all the money from to put together the show and make the awards? I think it's amazing that just one award can get a movie production so much more profit and the positive externalities it can create for the studios. Good job!
ReplyDeleteWhat a unique topic! When I usually think of the economy, I think of products made in a factory, but your post reminded me that many products/services in our market are provided only by the actions of another person. It's interesting to see how the demand curve changes when a movie receives an Oscar nomination or an award -- for all categories except the supporting actress it seems that the demand curve shifts to the right because of a change in consumer expectation. Since the movie won an award, the consumer expects it to be of higher quality, leading to an overall increase in demand for that specific movie. It would be interesting to see the profits of a movie that was nominated but then didn't win the award -- I wonder if its sales would plummet after the Oscars. Great post!
ReplyDeleteTypically we don't think about how much things cost that we see on TV-- how much it costs to put on shows, to show ads, to film. I've always wondered just how much money goes into the movie industry, and it's crazy how much one event can change the economy. With $30 million being invested to put on the Oscars, the short event leaves a lasting impact. I've never realized that when movies are nominated, I feel the need to watch the ones I haven't seen to compare, and re-watch the ones I have seen. Unconsciously, I have been contributing to the spike in revenues for years. I wonder if it's all "a trick" and the reason so much money is invested in the one night event is because they know there will be an increase in profit in so many areas of the economy.
ReplyDeleteLooking at the value of an Academy Award graphic, I'm really curious to know why Best Supporting Actress awards end up losing the film money, especially with categories like sound editing (which is an award everyone fast-forwards through) earning a film quite a deal more profit. Also, with the popularity of the Oscars going down over the past few years, what is its actual benefit for the economy? Doubtless movies that win awards are left better off, but how beneficial is it for the channel hosting the awards, especially since they require so much funding?
ReplyDeleteI thought that your post was really cool and you choose a great topic seeing this even just happened so recently! I wouldn't doubt that it would greatly affect the economy, yet I would have never guessed by this much! It is clearly shown that the marginal benefit is clearly much much greater than the marginal cost just by the facts that you had in here! Even though the stars spend so much on the outfits and the cost of tickets and the cost just to make the Oscar itself is so much, look how much it benefits it after the winning or even nomination. I know myself, after watching the Oscars last week that I want to see like 10 movies I haven't even heard of because the huge talk about how good they were and the awards they won, which is an example of adding to the economy like your chart shows. I think that this was a great topic! Nice Job!
ReplyDeleteTo put it into an even larger picture, the Oscars are not the only award show where the stars dress up. There are many more throughout the year so it’s crazy to imagine how much money goes into all of them for clothes and jewelry and everything else. Also like you stated, throughout the years to is something else to think about.
ReplyDeleteJust try to imagine the economy if there were no award shows. Would it increase the economy due to not having to shell out millions upon millions of dollars, or do you think it would decrease the economy because the movies wouldn’t become as popular and people would go to see them? Just something to think about.
I never thought about how much this affected our economy. Between the golden figurines, the dresses and jewelry the economy is thriving during this time. It is obvious that the money brought in is much greater than the cost that is spent. The money brought in during this time of award shows and parties is huge compared to the amount brought in the rest of the time. I never realized how much it really affected us. So not only is it providing us with entertainment, it is also helping our economy more than we ever would have guessed. This is a great topic to have picked since so many people can relate to it and do watch it. Great job on this piece!
ReplyDeleteThey spend over $30 million dollars on an award show where people are awarded $900 gold statues to add to their collection of other hundred dollar prizes. If the economy every decided to take budget cuts to something, I know what would be first. I had no idea that the Oscars, an award show that I have never seen, pays so much money for two to three hours of entertainment. When I was little, we got gold colored stars whenever we did something well. The Oscars are a just a more advanced and economically impactful version of the gold colored stars. Only not everyone gets one, and it cost $900 per star.
ReplyDeleteI wonder how much other companies can make off of the news from the events of the Oscars (such as selling gossip magazines about the event). It's pretty insane that each statue costs nearly $900. What is the significance of that? Do they make them with such expensive materials just to show status of being wealthy and talented? I'm also curious that if those actors and actresses sold their jewelry and clothing from the event, how much money could they raise to support charity's and private organizations?
ReplyDelete