Does Awards Season Impact Entertainment Space Earnings?

Whether you’ve watched all the “Best Picture” nominees for this year’s Oscars or not, you’ve likely seen ample speculation about this Hollywood award season. Amid the buzz of who will head home with a golden statue in hand, plenty of investors are speculating how the 2023 award season will impact earnings. While the popularity of a film might lead to increased revenue for its producers, that excitement cannot be directly correlated to how the film’s stock earnings will perform. 

Producers Dream of the Win

When popular culture speaks, we tend to listen. Wins and nominations generate trends that, as human beings, we inevitably fall into. “What do you mean you haven’t watched All Quiet on the Western Front?” You’re not alone if you were immediately triggered to buy a ticket to the movies or stream the film on Netflix after reading that question. 

The increase in demand generally makes Oscar nominees/winners’ parent companies see additional contributions to their earnings. For example, 2017’s “La La Land” had fourteen Oscar nominations, won six, and saw its domestic box office jump from $90 million pre-Oscars, to over $150 million post-Oscars!

Investors Shouldn’t Show Up at The Red Carpet

The nominees have been announced, and ticket sales have boosted, but that doesn’t mean investors should get their portfolios ready to include a new stock. No matter how tempting such investment might be, there isn’t any proof that the award winners or nominees significantly impact the stock earnings of movie producers or distributors. 

A study conducted at Claremont McKenna compiled a database of Oscar winners from 1990 to 2010 for different categories and analyzed sixty parent companies. The study revealed that winning an Oscar is not a financial game-changer for entertainment companies. The research indicated there’s no significant evidence of increased stock earnings, after achieving prestigious recognition in Hollywood’s most esteemed award show. 

Film companies can be just as tricky to invest in as any other asset. So before you think about investing in a film company just because it’s been nominated for an Oscar, remember you can’t beat the market. Follow the trend to the movie theater but pull back from impulsively including it in your investment portfolio. Check market trends and consult the guidance of a financial advisor before making any decisions. 

And the Oscar Goes To…

Despite any initial revenue boost that awards season brings, investors should employ more solid strategies than relying solely on Hollywood glitz and glamour. A boost in stock prices in the immediate aftermath of the awards show may be temporary. 

Movie awards may make for a good conversation starter but when it comes to your financial strategy, the box office won’t be driving returns. It takes more than star power and blockbuster success. You should consider market trends, company performance, and portfolio diversification before making any investments that could affect you in the long run. Now you know, an impulsive movie ticket purchase should not be reflected as an impulsive financial investment. 

AI Disclosure: This article was edited and generated using automation technology. Our editorial team reviewed and edited information and cross-checked across different sources.