These days, winning a Grammy or an Academy Award nod can mean much more than a statuette or a mention in the history books. It can often — but not always — be a financial boon as well, entertainment industry experts say.
The thinking is if a movie or a musical artist is nominated for a major award, consumers have a Pavlovian response, rushing out to see the movie or buy the CD, leading to higher returns and greater popularity, and ultimately to higher profits.
“Academic studies have shown that when you get a nomination for an Academy Award it can add millions of dollars to your revenue,” said Georg Szalai, business editor at The Hollywood Reporter.
“I think you can assume that something similar happens for a Grammy nomination because it certainly adds to the visibility of your content,” he noted, adding that although awards are good for business, it's difficult to make a big impact in what is now a multibillion-dollar industry.
“You’re talking about a few million dollars, and while that’s a nice boost for the unit that makes the film, or produces the music that wins the award, it’s not going to have a huge impact on the large media conglomerate that owns the unit, or label,” he said.
Academy rewards
An Academy Award is perhaps the most lucrative accolade in the entertainment business, and while it can certainly lead to a handsome payout, the truth is an Oscar payoff can still be unpredictable according to Randy Nelson, an economics professor at Colby College in Maine.
In 1997, Nelson and a team of inquiring economists decided to quantify the monetary value of an Oscar by comparing 9 years’ worth of box office data from thousands of films with their success at the Oscars.
Nelson and his team found that under certain conditions the combination of winning an Oscar nod and then winning best picture can mean an extra $25 million at the box office, while a nomination for best actor, or for best actress, can bring in an additional $6 million.
But timing is everything, Nelson adds.
These days, most studios release what they think are their Oscar-contending movies into the last quarter of the year to get the most Oscar exposure, but a lot of children's movies are released at this time of the year, and theaters tend to want to only show those movies they think will be most popular.
So unless a movie can garner some important nominations, like best actor or best picture, it is often shunned by movie theaters, Nelson said.
“Films don’t benefit from the Oscars unless they are still in the theaters,” he explained, citing as an example The Silence of the Lambs, which won five Oscars in 1992, including best picture, when its theatrical release was over and it was already available on video and cable television.
The film’s distributors re-released the movie on the big screen, but its takings came to a paltry $1,500 per theater.
This year, it looks as though some distributors have learned from past mistakes.
A case in point is the third movie in the Lord of the Rings trilogy, “The Return of the King," which has received 11 Academy Award nominations, including best picture, and is currently playing at over 2,500 theaters, more than any other best-picture contender.
The movie has become the top-grossing film released in 2003. And recently both media giant Time Warner and AMC Entertainment, the country's second-largest movie chain, cited the success of the film as a significant boost to their quarterly financial results.
Sweet, successful sounds
There's a similar financial boost for the music industry. At award shows such as the Grammys, musical groups can boost their sales if they’re perceived as the big winner, or if they deliver a standout performance on the night, experts say.
Hip-hop’s eclectic duo OutKast is nominated for six Grammy awards this year. The Atlanta duo’s “Speakerboxxx/The Love Below" is tipped to win the highly-coveted Album of the Year award at the award show this weekend, competing against a strong field of contenders that includes offerings from Justin Timberlake and The White Stripes.
Since its nomination in the best album category last December, OutKast’s CD has seen its album climb the album charts — a move which is sure to rake in more profits according to Geoff Mayfield, director of charts and a senior analyst at Billboard Magazine.
“Looking at the way sales of OutKast's album reacted in the week after the nominees were announced in December, they are gaining traction from the Grammys,” said Mayfield, who notes that the nomination sent the band’s album up from the number 10 spot on the Billboard 200 album chart to the number 5 spot in the space of a week.
Last year, jazz artist Norah Jones saw her album “Come Away with Me” shot to number one on the Billboard 200 album chart the week after she won eight Grammy awards, including Album of The Year, Record of The Year and Best New Artist.
Sales of her album saw the largest increase following the Grammys or any other awards show, Mayfield said, adding that recent Grammy-winning artists like Lauren Hill and Macy Gray have seen similar sales spikes.
“The album was already doing well in the Christmas season, then the nominations came in and it was on a different trajectory. On the strength of her nominations suddenly she was number one,” he said.
But it’s not just about nominations or trophies. Artists who perform on award shows, or appear to present an award, can see a financial benefit, according to Ed Benson, executive director of the Country Music Association, which runs the annual CMA Awards, an awards show for country music artists.
Exposure is critical, Benson notes: “We usually say that the number-one financial impact usually comes from having done a good performance on the show. Winning an award would be the number-two impact and the number-three impact comes from simply making an appearance.”
“These events help so solidify an artist’s visibility,” he added. “You get more media interest and your face becomes known to television talent bookers. There’s a sense of having arrived, of getting media recognition, and that’s why these awards shows are so coveted.”