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Oscars 2017: How Movie Theaters Fare After the Nominations

 

On January 24, 2017, the nominees for the 89th Academy Awards were announced over the first-ever global live-stream, hosted by esteemed actors, actresses, writers, directors and the president of the Motion Picture Academy of America.  However, before the nomination announcement had even finished, the Academy’s choices were already a lightning rod for conversation. La La Land was nominated for a record-tying 14 categories. Surprises were congratulated and snubs were excoriated, all as the live-stream was still airing.

Much of the conversation surrounding Oscar snubs and surprises is centered on the concept of an Oscar bump, which is the resulting increase in box office sales for a film nominated for the Best Picture category in the Academy Awards. In theory, the Oscar bump makes sense and is a boon to the industry as a whole. A nomination for Best Picture bestows a film with an added level of publicity and a stamp of approval from a prestigious organization known for recognizing quality. It also drums up excitement with moviegoers and provides a much-needed boost to the $16.7 billion Movie Theaters industry between January and March, when big-budget December films are trailing off, the popcorn fare of spring and summer has yet to hit screens and box office figures are low.

On the surface, the Oscar bump seems quite cut and dry, but for the nominees for the Best Picture category over the 10 years to 2017, the effects have been far from unanimously positive. While a nomination has shown to be a reliable indicator of total box office growth for the films themselves, movie theaters may not benefit from this bump as expected.

This year’s nominees

After expanding nomination limits in 2009, the Academy has opened this category up to more pictures, including lesser-known films that are often ignored for Best Picture, as well as big-budget pictures often overlooked in this prestigious category. This year’s nominees include films across that spectrum, from the toned-down, Sundance Film Festival darling Manchester by the Sea to the big-budget extraterrestrial drama Arrival.

The bulk of box office receipts are tallied during weekends, and in the next full week after the January
24th nominations, eight of the nine nominated Best Picture movies still in theaters received an increase in weekly box office gross. Overall, during the week of the nominations announcement, these films pulled in $43.1 million on 7,886 screens. The next week, those same films earned a collective $48.8 million, representing a 13.3% increase, a figure that would likely have been higher, if not for Hidden Figures’ 34.4% box office drop after its two-week run at number one in the box office. Six of the same eight pictures also increased their audience exposure. Bolstered by increased visibility, distributors and theaters put these pictures in more venues. However, this did not necessarily benefit movie theaters at large. The number of theaters that show these movies increased 51.4%, while the movies achieved only a 13.3% box office gross increase and the average revenue per theater for these films actually dropped 25.2%. In the span of one week, more resources were allocated toward these films to put them on more screens and get them in front of a wider audience. This reallocation of funds ended up boosting overall gross, but it ultimately ended up making each film less lucrative in the average theater.

Historical precedent

Even though the Oscar bump is a widely known phenomenon, the trend mentioned above is not anomalous. It’s actually the norm. In fact, nine of the 10 previous years produced a similar outcome. While revenue increased, theater totals expanded at a rate that drastically outpaced box office growth, leading to a contraction in revenue per theater. The only exception to this trend is the 2015 slate of Best Picture nominees, when American Sniper opened for national release the same week nominations were announced. The film opened to an incredible $132.3 million in 3,555 theaters after playing in just four theaters for a month prior. This is not necessarily an Oscar bump so much as a planned wide release coinciding with an expected Oscar nomination. Adjusting for American Sniper, the total box office of all of the Best Picture nominated films over the past 10 years jumped 6.0% during the nomination announcement week. However, the total number of theaters screening these films rose 29.2% over the same time period, resulting in a box office revenue per theater decline of 17.9%. Theaters pay for labor, utilities and film rentals, which has historically cut into the per-theater earnings of the film.

Oscars 2017: How Movie Theaters Fare After the Nominations PDF

 

 

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