The economics of the Oscars and what it means for film producers

The film industry is not just an avenue where filmmakers and actors can create art and expression through their work – it’s also a type of business where producers and movie makers expect to double or even triple their investments.

While some earn their prize in the box office and other business models designed to market and sell products related to the film franchise, other channels where moviemakers can boost an impressive return on investment is by winning recognition from experts, especially given by bodies as highly-recognized as the Academy Awards, the Oscars.

The question that most people wonder about is this: what are the financial benefits of winning big especially from award-giving bodies like the Academy? Most importantly, what does it mean for film producers, financially, to nab this highly-sought acknowledgment?

For starters, Oscar winners don’t get cash prizes. Instead, they receive a swag bag worth hundreds of thousands of dollars. While these may seem less grand, the gold rush from being recognized by the Academy comes after this milestone.

For instance, the earning potential even for movie producers of small-budget films doubles after the awards night. Movie houses and cinemas across the world will take advantage of their newly won popularity by running and re-screening the winning films to sell more tickets – and this means millions of dollars from additional gross ticket sales.  The gold mine that is the box office will be followed by increased DVD sales, international television streaming franchises, and media franchising demand not just in their home countries but from around the globe.

Everything that comes after an Oscar victory can easily be translated to an expected growth in demand from actors and filmmakers when choosing where to take their next masterpieces.

For instance, when the company, Open Road Film, won their first Best Picture for “Spotlight” in the 2016 Oscars, the bragging rights of winning big and being recognized by the Academy have boosted the film producer and company’s brand image. Similarly, in 2009 Academy Awards, sleeper hit “Slumdog Millionaire” went from earning $44.7 million in domestic box office before Oscar nominations to bringing home additional $100 million (approximately) after its Best Picture win. In this year’s edition of the awards show, the Guillermo del Toro-directed sci-fi film “The Shape of Water” won the top accolade. As experts are predicting, it may well pull off dramatic box office growth over the next few days or even weeks following the victory.