Oscars Gold – Part III

The Oscars
Image credit: ABC.

As the Academy of Motion Picture Arts & Sciences begins final preparations for the 96th Academy Awardsthe Media C-Suite takes a brief look at the values, and value, of the Oscars.

In Part I of this series, we looked at the values of the Academy itself within the context of today’s US$2.5 trillion global Media & Entertainment industry. Those values highlight the origins of Hollywood as a creative, technical and commercial collective enterprise with a business model based squarely in cinema and public perception of the “movies”. 

In Part II, we looked at the US$1.36 billion in capital assets accumulated by the Academy over more than half a century and the nearly US$1 billion more in revenues awaiting receipt. That hefty capital pool has been built not by Box Office receipts, but from license fees for broadcast rights to television audiences now controlled exclusively by one of the industry’s largest Streamers. 

Part III

The Silver Screen

In 1927 Los Angeles, a collection of 36 film industry leaders founded the Academy of Motion Picture Arts and Sciences as a trade group to promote the growing trend of Americans watching “movies” on the “silver screen” at the local theatre. 

Ticket sales to increasingly purpose-built cinemas across the US and Europe were as lucrative then as streaming subscriptions are today. Then, as now, producing and distributing entertainment content was big money.

The Box Office was the only game in town.

There was no television. No internet. Radio was just becoming a thing. The technological transformation of the day was from silent “movies” to the wonder of “talkies”. The social experience of attending a film at the local cinema washed over the United States and Europe to become the “great escape” after the stock market crash of 1929.

By 1931, out of a US population of ~124 million people, an average of 2 million people per day attended screenings at Paramount-owned cinemas. Hollywood boomed as the Great Depression raged, and Paramount was only one of five major studios, all of whom were busy taking ownership of theatres and creating proprietary networks of distribution to monopolise ticket sales for their own “originals”. 

Sound familiar?  

On the eve of the 96th annual Academy Awards, and as today’s studio moguls enter a new phase in the Streaming Wars against Netflix, led seemingly by Disney, let’s take a brief look at some key time frames that lead us to a speculative future for the Academy of Motion Picture Arts and Sciences.

The Original 15 Minutes of Fame

The first Academy Awards took place in 1928, hosted by the Academy’s President, and silent film star, Douglas Fairbanks to an audience of 270 people. Tickets were expensive at US$5.00 (~US$80 today) for a ceremony that lasted only 15 minutes at the newly opened Hollywood Roosevelt Hotel. 

A Century (at least)

One thing that has not changed in at least 100 years is the presence of the studio “Majors”. Universal Pictures, Paramount Pictures, MGM, Warner Bros, Walt Disney and Columbia Pictures were all top companies at the time of the first Academy Awards and are all cornerstones to the largest multi-billion dollar publicly-listed media conglomerates today.

The Space Age

Television allowed the Academy to begin broadcasting the Oscars live to the most lucrative consumer market on Earth with the 25th annual Academy Awards ceremony on March 19, 1953.

By 1998, national cable and satellite networks allowed as much as 20% of the US population, over 55 million people (and as many as a billion worldwide) to merge their social experiences at the local cinema with family time at home, forging cultural references out of film moments, actors and directors that span generations.

The Internet Age

Netflix changed everything in 2007. 

Delivery of motion pictures over broadband internet may have actually started with Amazon, but each and all of the multi-billion dollar publicly-listed media conglomerates have spent multi-billion dollar budgets to transform themselves from Box Office champions to streaming, stay at home, Netflix killers.

All of them have been busy creating ownership of SVOD platforms and creating proprietary networks of distribution to monopolise subscription sales for their own “originals”; Box Office be damned.  

The Next Four Years

The year 2028 marks the 100th anniversary of the Academy Awards and the expiry date for the lucrative license agreement to broadcast the Oscars live to a television audience.

That license now rests in the hands of Bob Iger at the Walt Disney Company, owning both ABC (holding US broadcast rights to the Oscars) and Buena Vista (holding international rights). 

Over the next four years, the rights to broadcast the Box Office-focused Academy Awards are held firmly within the control of the multi-billion dollar publicly-listed media conglomerate with a stated objective to turn the SVOD platform, Disney+, into its core business.

Prescience

Since its founding, the Academy has amassed an international membership of over 10,000 professionals spanning all forms of content production for all forms of content distribution, from cinema (of course) to television, radio and the internet. The Academy has also amassed total assets in excess of US$1.36 billion and contractual obligations from Disney itself for US$713.3 million more over the next four years. 

If one didn’t know better, one might imagine that the Academy has been preparing for decades and now wields both a sizable war-chest and a formable, professional army to assume the role of peace-keeper in the Streaming Wars for the industry’s next generation.

Perhaps the 101st Annual Academy Awards will be broadcast live as it has since 1953. Or perhaps a streaming option with one of the original studio Majors will be announced. 

Of course, there is always Netflix. And now Amazon and Apple have announced firm support for theatrical release to rival any studio Major’s capacity. 

And then, just imagining, there is always the metaverse. 

Editor’s Note: This is an update to an article previously-published on December 9, 2022.

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