Rolling Out the Red Carpet (and the dough): How the Oscars Drive Economic Growth

Did you watch the Oscars this last weekend? Yes, there was no incident this time. Only wholesome moments to count for. But did you also wonder if the Oscars was just a big party impacting the lives of people in the industry or actually having an impact on the economy?

I would like to thank the Academy… 

The Academy Awards, or the Oscars, are one of the most prestigious film awards in the world, attracting millions of viewers each year. The awards ceremony not only honours outstanding achievements in filmmaking but also has a significant impact on the global economy, especially the film industry.  since the initiation of the Oscars in 1929, the ceremony has had a significant impact on the economy, both in the United States and globally. Microeconomics researcher Roy Weinstein did research on the economic impact of the Oscars. In 2013, the economic impact of the Oscars on Southern California was measured at over $130 million annually. It’s certainly risen in the span of 10 years. Oscar’s marketing budgets run from a few hundred thousand to a few million. 

Can Oscarnomics get on the stage…  

“Oscarnomics” is a term used to describe the economic impact that the Academy Awards have on the film industry and related businesses. The term is often used to refer to the effect that winning an Oscar can have on a film’s box office performance and overall profitability. In a nutshell,  “Oscarnomics” refers to the complex web of economic factors and effects related to the Academy Awards, including the impact on individual careers, film financing and distribution, box office performance, and related industries such as tourism and fashion.

I would also like to thank the people…. 

The Oscars have a big impact globally, on several industries. Let’s look at some of them; 

1. Film Industry: The film industry is the most obvious industry impacted by the Oscars. Winning an Oscar can lead to increased box office revenue and streaming sales, and higher demand for the film in international markets. The Oscars also impact the careers of the actors, directors and the people associated with the winners. In 2020, the South Korean film “Parasite” won four Oscars, including Best Picture, becoming the first non-English language film to win the top prize. The success of “Parasite” led to increased interest in Korean cinema and potentially opened up new markets for international films. 

2. Fashion Industry: The Oscars are known for their red-carpet fashion, and winning an Oscar can significantly impact a designer’s career. From makeup to styling, everyone gains exposure from dressing an Oscar-winning actor or actress can lead to increased demand for work and receive international recognition. In 2014, Cate Blanchett made Oscar history when she wore an $18.1 million look. Her $100,000 Armani Privé gown was the least expensive element of her outfit — her jewellery alone was estimated to cost $18 million. 

3. Beauty Industry: Similar to the fashion industry, the beauty industry is impacted by the Oscars through the exposure gained from the red carpet. Winning an Oscar can lead to increased demand for a celebrity’s endorsed products, leading to higher sales and profits for the beauty industry. After Lupita Nyong’o won the Best Supporting Actress Oscar in 2014,  led to increased sales and exposure for the makeup brands she endorsed, including Lancôme and Kiehl’s.

4. Hospitality Industry: The Oscars ceremony and related events generate millions of dollars for the local economy of the host city. For example, the 2019 Oscars held in Los Angeles generated an estimated $115 million in economic activity for the city.

5. Tourism Industry: The success of the film “Slumdog Millionaire” at the Oscars in 2009 led to increased interest in Mumbai, where the film was set and filmed. This led to increased tourism to the city, particularly to the slum areas where the film was shot.

I’m here for the drama…

Remember when Will Smith won the best actor award for King Richard, oh also smacked comedian Chris Rock? 

Does the slapping incident help the movie, the actor or even the Academy by enhancing their business potential? 

For his first public appearance in Boston after the Oscars Slap, the ticket price ranged from $825 to $1,705 on the resale platform StubHub, much higher than the original $51 to $71 they were sold for on the venue’s website. There was also a rumour that pharma giant Pfizer had planned the ‘Oscar slap’ to promote its upcoming alopecia drug, a spokesperson denied of course. There are several discussions for and against the slap and several conspiracy theories regarding the incident. The coverage of “slapnomics” is hence a discussion for some other time. 

And the Oscar goes to… LA

The Oscars serve as a boost for the local economy and cultural landscape of Los Angeles.

Each year. With thousands of visitors flocking to the city, the event generates substantial revenue for local businesses, including hotels, restaurants, and other attractions. Additionally, the ceremony requires a large workforce, providing employment opportunities for people across the city. The Oscars also attract global media attention, shining a spotlight on Los Angeles and potentially attracting future visitors and investment. Moreover, the event has a significant impact on the fashion industry, as designers and brands compete to dress the attending stars, leading to increased exposure and sales for many local businesses.