Does the value of an Oscar nomination or win still help a film enjoy higher box office revenues, an increased market share of theaters, and a larger share of the rental market?
Studies have established the financial benefits associated with a best picture Oscar. But in the last decade, the Academy of Motion Picture Arts and Sciences made two noteworthy changes impacting the race for best picture.
First, in 2001, the best animated feature category was introduced, recognizing up to five animated films in a separate award category. More recently, in 2009, the Academy increased the number of nominees in the best picture category from five to 10 with a goal of increasing recognition for deserving films.
That got economists at Holy Cross thinking: How does the value of an Oscar nomination or win vary over time with the number of award categories and number of nominees per category?
A study conducted by three professors of economics — including two from Holy Cross — investigates how these benefits differ as competition within and across award categories changes. Using a panel of weekly box office data for nominated and non-nominated films from 1999 to 2011, the economists tested for changes in revenues and market share of nominees and winners as the number of nominees and categories increases over time.
The research was conducted by Melissa Boyle '00, assistant professor of economics at Holy Cross, Victor Matheson, associate professor of economics at Holy Cross, and Lesley Chiou, associate professor of economics at Occidental College. Economics majors Megan Quinn '13, of North Easton, Mass., and Meredith Stevens '11, of Duxbury, Mass., provided research assistance as part of last year's summer research program at Holy Cross.
With Oscar nominations announced on Jan. 24, and the big awards show on Feb. 26, we sat down with Boyle and Matheson for the results of their research. The envelope please …
1. Why did you decide to pursue this research?
Melissa teaches Economics of the Arts, which is an upper-level elective in the major, so this is right up her alley. Furthermore, among her numerous papers in the field of cultural economics is a paper on the impact of a Tony Award nomination on Broadway play and musical ticket sales which was published in the Journal of Cultural Economics. This paper is essentially an extension of that work.
Economists are naturally interested in the way the world works, and anytime something changes in a major way this allows us to examine how people make decisions in the real world. In 2009, the Academy changed its nominating procedure for Best Picture for the first time in over 65 years, providing us with a perfect opportunity to observe what happened.
2. What did your research show?
The Academy Awards serve two economic purposes. First, the show itself is a popular television event that generates significant advertising revenues. In the face of declining viewership, the Academy decided to increase the number of films nominated for best film from five to 10. The thought was that with more nominated films, more fans might have one of their own personal favorites nominated leading them to tune in to see how their movie fared.
Academy Award nominations also serve as a signal of quality (much like a college degree from any highly selective college like Holy Cross), so ticket sales typically increase for films that are nominated for best picture. With the increase in the size of the pool, however, the Academy has watered down that signal. So, is a best picture nomination worth less now than in the past?
In fact, the data show that the answer is "yes." Following the increase in the number of films nominated, the "nomination boost" from a best picture nod has fallen significantly.
3. The Academy of Motion Picture Arts and Sciences' governors instituted another new procedure last summer that calls for five to 10 best-picture nominees. Do you plan to analyze this year's box office results following Oscar season?
More data is always better, and with yet another change in the nomination procedure, we have yet another chance to see what happens.
News Coverage:
- Holy Cross researchers find Oscar value dwindling (Telegram & Gazette, Feb. 24, 2012)
