Does Being Nominated for an Oscar Affect How Much Money a Movie Makes?
Through the course of this article I will be conducting an analysis to determine if the number of Academy Award nominations a movie receives affects how much money the movie makes as a result of the nomination. My hypothesis is that a greater number of nominations will correspond with a greater percentage of revenue being earned subsequent to the announcement of nominations.
Being nominated for an Academy Award is not just a superficial honor; it also comes with a number of financial bonuses. According to a report by Randy Nelson, professor of economics and finance at Colby College, Oscar movies stay in theatres nearly twice as long as other movies. In addition to this, a nomination for an Academy Award is essentially free marketing for the movie. People are more likely to see a movie that they feel is “certified” by a knowledgeable source. It then follows that movies that have received more nominations will be more appealing to potential viewers, and will stay in theatres longer. Other factors that can affect the gross revenue of a movie are production budget, studio marketing, critical reception, release date, and genre.
Preexisting data on Academy Award nominations was obtained from the Oscar’s official website. A list of all 206 Academy Award nominated movies from 2009 2013 was accumulated and then alphabetized. Only movies from this five year timespan were used in order to minimize the effect of inflation. 42 movies were then chosen through a systematic random sampling where every fifth movie was chosen. The number of nominations that each of the 42 movies received was recorded. Preexisting data on domestic (US) gross revenues for each movie was obtained from the website “Box Office Mojo”. To measure the effect that an Academy Award nomination had, the percentage of the gross revenue that was earned subsequent to Academy Award nominations was calculated for each movie. For example, nominations for 2013 were announced on January 16th 2014, so all revenue earned after that date was divided by the gross revenue, resulting in a percentage of the gross revenue. The number of nominations and the percentage of the gross revenue earned after nominations were then computed into a graph, with number of nominations as the independent variable, and the percentage of the gross revenue earned after nominations as the dependent variable. In this study I did not control for the time of year that the films were released, the production budget, or the genre.
This data shows a slight positive correlation between the number of academy award nominations and the % of total gross earned post-nomination. Our R-squared value tells us that 13.1% of the difference in % of total gross earned post-nomination is related to the number of nominations. The results for this study are limited because of the failure to control release date, production budget, and genre. Future studies should investigate whether there is a stronger or weaker correlation between the two factors at certain times of the year, with certain ranges of production budgets, and in certain genres.