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It looked like 2020 was going to be the year of streaming at the Academy Awards. Netflix alone racked up more than 24 nominations, while it had only gotten 30 in its entire six-year history before that.
Unfortunately for Netflix, the streaming service went home largely empty-handed. Laura Dern won Best Supporting Actress for Marriage Story and American Factory took home Best Documentary, but it was largely shut out from the major awards.
It wasn’t for a lack of trying. The Wall Street Journal reported that Netflix spent around $100 million on its 2020 Oscar campaign, with the majority dedicated to Noah Baumbach’s Marriage Story and Martin Scorsese’s The Irishman. By comparison, most movie studios spend $5-$20 million per movie. Netflix’s head of original films, Scott Stuber, said that $100 million estimate was high, but it’s clear that winning a major Academy Award is important to Netflix.
“They are spending a reservoir of cash on awards and it’s forcing their competitors to reason, ‘We better rustle up bigger budgets or we won’t be in the game,’” Richard Licata, a former senior executive at NBCUniversal, Showtime, Fox and HBO told The Wall Street Journal.
That money goes toward things like full-page ads in trade magazines, billboards, special Q&A screenings, private jets for filmmakers and actors to promote the movie, extravagant receptions and even coffee table books sent to voters and journalists. In the case of The Irishman this year, Netflix also produced two hours of video extras, three hours of behind-the-scenes podcasts and more than 20 YouTube videos to promote the movie.
These costly campaigns are typically seen as a way to get butts in movie theater seats — a gamble that’s historically paid off, even if the movies don’t end up winning. A 2005 study in the Journal of Cultural Economics found that winning Best Picture raised box office receipts by $25 million (or $33.8 million in 2020 dollars).
Still, the study concluded that “nominations for Oscars generate substantial revenues, while winning an award contributes only little to this extra rent.” In other words, it’s more important to just be in the race than to win it.
A 2011 report from research firm IBISWorld found a similar effect: “The average Best Picture Oscar winners over the last four years saw a bump of 22.2% (or $20.3 million) in box office revenue after they were named a nominee and an additional 15.3% (or $14.0 million) following their win at the award show.”
Of course, it’s harder to measure how awards impact streaming services. Netflix, for example, limited the theatrical run of The Irishman to just 26 days this year. Last year, when Netflix garnered 15 nominations, it added 8.8 million subscribers in the fourth quarter, i.e. awards season. That was ahead of its 7.6 million projection, but it’s unclear how much its Oscars contenders like Roma had to do with it.
Not relying on a theatrical run also means the awards campaigns benefit streaming services indefinitely — because Roma is on Netflix forever, the company can justify spending more than its traditional studio counterparts. To put this in perspective, Netflix spent $15 million to make Roma and $25 million to promote it.
Whatever the impact that money had, it was probably dampened this year — the 2020 Academy Awards were the least-watched of all time. But the benefits to streaming services may go beyond mere sign-ups.
Winning awards has a clear “business benefit,” Netflix CEO Reed Hastings recently told investors. “We will win deals we wouldn’t have otherwise won for incredibly entertaining content.”
That means attracting top-tier talent, part of a virtuous cycle that lavish campaigns contribute to. Still, you’d have to think that Netflix (and the talent it hopes to attract) would like to prove it can win the big one at some point. Until it does, expect to see them continue spending their way into the conversation.
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