A big night at the Oscars will certainly boost Lord of the Rings ticket sales, but while it won’t do much for AOL-Time Warner’s (New Line Cinema‘s parent company) bottom line, could it push FOTR’s ticket sales past Harry Potter?
Here is an excerpt from Heesun Wee’s article on the financial impact of the Academy Awards:
Don’t reshuffle what’s left of your dwindled equity portfolio into AOL Time Warner just because its New Line Cinema unit is behind The Lord of the Rings: The Fellowship of the Ring, which leads the Oscar race with 13 nominations. While film awards and nominations generate plenty of welcome buzz for Hollywood studios, their impact on revenues, earnings, and stock prices are nominal, media analysts say.
True, one of the most tangible benefits of awards and nominations is higher ticket sales. David Miller, an entertainment analyst for Sutro & Co., notes that an Oscar nomination for Best Actor or Best Picture can add anywhere from 5% to 10% in additional box-office receipts for a studio. However, that figure depends heavily on how much money a studio wants to spend on keeping a film in theaters, months after its debut, to take advantage of any awards buzz. Two nominees taking that route are Moulin Rouge, released in spring, 2001, and still playing in New York City, and the animated feature Shrek, released in May, 2001, and still in Los Angeles theaters. “Certainly [the extra box-office receipts are] material, but it’s not so much that it’s going to move stock prices,” Miller says.
Besides, even if New Line’s Lord of the Rings raked in, say, an extra $100 million in ticket sales on the heels of its Oscar nominations or any wins, that figure barely registers at parent AOL Time Warner, which records annual revenues of $38 billion. “It’s meaningless to the bottom line,” says Jeffrey Kleintop, chief investment strategist at PNC Financial Services Group. “Instead, a lot of the nominations are about generating some hype around the studio, a release, a certain production team to market the next film they might come out with.”
Note: FOTR’s US box office revenue was $291 million as of Marth 11th, while Harry Potter had earned $315 million. At 10% boost to FOTR’s box office earnings would push it past Potter — and that’s not even taking the interest in the TTT trailer into account!