The Academy Awards used to be the battleground between major Hollywood studios. It’s now increasingly a fight between streaming services.
Netflix nabbed 27 Oscar nominations on Tuesday, the most of any studio, including a Best Picture nod for psychological drama “The Power of the Dog.” It’s a return on — major — investment into original content by the streaming giant.
Julia Alexander, a senior strategy analyst for Parrot Analytics, says nominations for companies like Netflix and Amazon show the growing significance of streaming content to the Academy — as well as to audiences in general. That’s changing the types of movies nominated, too. The following is an edited transcript of our conversation.
Julia Alexander: I think when we think about the type of movies that the Academy really wants to celebrate — these dramas that are about grief and about hope and about humanity coming together at a time when we really need it, those movies don’t necessarily work well in theaters anymore, in terms of the economics. Audiences still want to see those movies, the demand for those has not gone away. But the value inflection that comes from going to a movie theater, versus what you can watch at your home, where you’ve got a really great TV and maybe a cool soundbar, that has changed. And so, Netflix has essentially said: Hey, these movies that Disney or Universal or Sony can’t necessarily distribute, because they have to worry about different economics in a theatrical model, Netflix is saying: “We’ll make them.” And now, we see Netflix dominating at the Oscars for the last few years.
Kimberly Adams: That’s a really good point. Because when I think about where I might actually go to the theater, it would be for one of these big-budget action films. But if I want to watch a more thoughtful, quieter, more artistic movie, I do want to see that in the comfort of my own home.
Alexander: The best way to think about the theatrical model working in 2022 is sequels, superheroes and scaries. Effectively, if you’re within those three categories, there’s a good chance that your movie is going to make a big return on investment, because what do people want out of sequels, superheroes and scaries? A communal experience that is powered by really strong technology performance they can’t get at home.
Adams: How much of the nominations this year really reflect what people are actually watching and enjoying?
Alexander: I would say more than usual, actually. This has been a criticism that the Academy has received for many, many years. And actually, if you look at the data behind it, the years in which they nominate more typical blockbusters, the viewership for the Academy Awards has gone up, which makes sense. People want to tune in to watch awards for movies that they’ve seen. Typically, because the Oscar movies only have to be in theaters for a week or two before they get nominated, they usually come out towards the end of December, and they only play in coastal cities. But what Netflix and all these global streamers have done is effectively redefined wide distribution. Now, it’s available to 200 million global subscribers. And so I think the Oscars this year really reflect a lot of the movies that people have had access to, for the first time in a long time.
Adams: There is so much more data about the kinds of movies that people watch at home. How is that shaping the revenue model for which movies get made? And then get put forward for things like the Oscars?
Alexander: One data point we should examine is pre-pandemic. Going up to 2019, less people were going to theaters, on average. However, box office revenue actually increased or remained about the same. What that tells us is that more people are going to watch one type of movie at theaters and again, that’s your sequels, your scaries, your superheroes — those are the movies that perform. And when you look at a calendar year, in terms of theatrical releases, it gets really cramped. And so you have to compete along that line. What do people want? Well, we have to produce those types of movies. When we look at the economic value for something like Netflix, movies like musicals, westerns, they perform well for Netflix in the way that their revenue model needs, which is not only the first 28 days of performance, which is opening weekend, second weekend. But does that movie become a high-retention title? If they can maintain their subscriber rate, if Netflix can maintain engagement and, most crucially, high-risk customers who will cancel — the ones who don’t really use Netflix at all — that is a huge win for them, in a way that it isn’t for a studio looking at theatrical box office revenue as the main point of, you know: Are we going to make our return on investment, here?
Related Links: More insight from Kimberly Adams
To view the nominations for this year’s Academy Awards, ABC has a full list.
And even though the Tuesday announcement kicked off with the theme of “Movie Lovers, unite,” The Washington Post’s chief film critic argues this year’s nominees actually reveal just how fragmented today’s movie-going or, I guess, “movie-watching-at-home” audience is.
We’re also linking to pieces from Variety and IndieWire about diversity at this year’s Oscars, still attempting to recover from the #OscarsSoWhite social media protests of 2015 and 2016. Last year was a record-breaking year for nominations going to actors of color, with nine people getting nods. This year, there were four.
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