This Sunday a global audience second
in size only to that for the Super Bowl will watch television's
most lucrative infomercial -- the 72nd-annual Academy Awards.
For some three and a half hours, interspersed with clips
from currently-available movies, many of Hollywood's most
publicized stars, acting as mobile product-placement platforms
for their own and other images, will ecstatically award
55 13-inch-high gold-dipped statuettes. The recipients of
these awards have already been determined by a mail-in poll
of some 4,200 eligible members of the Motion Picture Academy
of Arts and Sciences, which the studios created in 1927
expressly for the purpose of sponsoring this image-building
event.
The Academy's voting mechanism is murky
at best -- it studiously avoids disclosing how many of its
members vote, what the margin of victory is for any winner
(which in a five-nominee race might be pretty slim) or,
for that matter, what part of a winning vote was provided
by members with a vested financial or career stake in the
film or its sponsor. But almost nobody cares about such
obvious flaws in the process. For insiders, the point is
not the empirical validity of the vote but the value, in
money and status, it bestows on the honorees -- and to greater
Hollywood.
Who are these unnamed winners? The studios
obviously think an Oscar win matters to them. Because they
are prohibited by Academy rules from using the telephones,
mail, FedEx or even banquets to electioneer, they advertise
in the two trade papers, The Hollywood Reporter and Variety,
to alert Academy members of their vested interest in films.
These multicolored "For Your Consideration" advertisements
are not cheap. Variety, for example, charges $29,100 for
ads that are tacked over its cover. To date, Dreamworks
has reportedly spent more than $775,000 in Variety alone
to push a single film, "American Beauty." And, in the last
three months, such ads have provided these journals with
a substantial part of their annual revenues. Another unambiguous
winner is the Academy itself. It received $40,161,000 for
the 1999 domestic and foreign broadcast rights. The show
cost it $10,715,000 to produce, leaving it with a hefty
profit of $29,446,000 (not including what it makes from
the books, posters and other mementos it sells on it Web
site).
ABC, the subsidiary of Disney that broadcasts
the program, is also a winner. It gets almost half the television
audience that night, which it then sells to advertisers
in the form of commercial time for $1.3 million for each
30-second slot. That adds up to bills of $13 million for
the major advertisers taking 5-minute packages. At this
rate, with 48 slots to sell, it collects $62.4 million on
a program for which it paid the academy $36.6 million for
domestic rights. (The value to the advertisers, aside from
prestige, has been called into question this year by Revlon's
decision to cut back its commercial package from five minutes
to one -- saving itself more than $10 million -- because,
as one of its in-house ad people explained to me, "there
is too much advertising clutter on the program.")
Determining how much the films themselves
-- and their distributors -- benefit from Oscars is more
problematic. Conventional wisdom holds that films winning
Best Picture produce enormous profits through their re-release,
or "bump." Variety, for example, reports that in recent
years these Oscars have "produced a worldwide box office
bump worth an average of nearly $150 million." On the other
hand, studio executives argue that the post-Oscar lift is
greatly exaggerated -- and point out that the "average"
cited by Variety is fatally skewed by the inclusion of "Titanic"
and its nearly $800 million post-award worldwide windfall
in 1998. The extent to which a film profits from a re-release,
according to these insiders, depends both on when in the
season -- and how -- a "Best Picture" was initially released.
In any case, box office grosses for re-releases
do not necessarily translate into profits. On the second
time around, theaters keep a larger share of ticket sales
-- 60% as opposed to 30% in the initial run. Also, the distributor
has to advance additional money for advertising (having
already disbursed millions for the pre-Oscar ad campaigns),
which can be greater than the box office receipts.
Consider the sad case of "The English
Patient." The producer Saul Zaentz managed to make the film
for only $33 million by getting its stars and crew to defer
$10 million of their salaries, which they were to recover
when the film broke even. And with its Oscar bump and re-release,
"Patient" grossed $225 million dollars worldwide. But, as
it turned out, that was not sufficient to pay the additional
marketing charges levied against it by its distributor,
Miramax. Despite its nine academy awards, it still has not
repaid the $10 million its stars and crew effectively lent
it -- nor has it made a profit. Whatever the cash value
the Oscar bump may add to films, its status value greatly
benefits studios, especially the newer studios, which thirst
for credibility (this helps explain the superabundance of
Dreamworks and Miramax ads in Variety and The Hollywood
Reporter).
For their part, studio executives tend,
characteristically, to take a Byzantine view of the value
of Oscars. One very savvy executive, who asked not to be
quoted, explained to me that the chief beneficiaries may
be directors. Not the directors who themselves win Oscars
for directing but directors whose stars win Oscars for acting.
His logic went as follows: Superstars, who get a fee of
$20 million or more for a picture, want to win the Best
Actor Oscar because of the prestige it brings; they make
big bucks anyway. Studio executives also believe, rightly
or wrongly, that certain directors are able to make films
that win Oscars for the actors who star in them. And, if
those actors think such a director will get them the prize
they covet, they will often cut their fee, which will save
the studio tens of millions of dollars. Studios thus seek
to make deals with a director whose stars, they think, tend
to get Oscars, because they hope these directors will attract
Oscar-hungry newcomers to act in their films -- on the cheap.
For example, Woody Allen, whose star Diane Keaton won best
actress for "Annie Hall" in 1977, has since been able to
get dozens of stars (such as Bruce Willis, Leonardo DiCaprio,
Sean Penn and Julia Roberts) to waive their multimillion-dollar
fees to act in his films.
Finally, the 4,200 academy voters benefit
at least psychically, if not materially, by believing that
their choices will, like Archimedes' lever, somehow influence
the universe of entertainment. Expressing this belief in
their global power, the co-producer of the industry infomercial,
Richard Zanuck, told Variety: "We will have to be cognizant
of the fact that there will be 800 million people watching
around the world." But there were only 78 million American
viewers last year. Thus, to meet this projection, some 722
million foreigners, many without television sets, would
have to stay up through the wee hours of the morning and
the next working day to watch a show in a foreign language
-- an extraordinary conceit since some of the largest countries
in the world, such as China and India, are not even licensed
to carry the program. Whether or not this vast -- if unverifiable
-- alien audience materializes on Sunday night, the Academy
voters will continue to take great satisfaction in their
perceived universal power.
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