The Oscars are a yearly extravagance that many people enjoy from the comfort of their living room, hoping to see one of their favorite nominees win one of the highly coveted awards. Roma’s nomination for Best Picture at the 2019 Oscars is notable for a number of reasons, but one could have major implications for the future of multiplex cinemas.
Roma was a film produced by, and initially released on, Netflix. This might not seem special, but the film was nominated for Best Picture at the 2019 Oscars which is unprecedented for a streaming service’s original film. Not only that, but Netflix spent $25 million on its Oscar campaign, working to publicize the film as best possible and gain the votes of cinephiles around the country. To qualify for an Oscar, the film had to be shown in theaters, breaking Netflix’s streaming-only status, albeit only for an instant. It has been argued that if Roma wins its category, Netflix will be able to attract more household Hollywood names.
With more prestigious cast and crew comes more potential consumers, so Netflix could generate more revenue than it already does. This article from NPR posits that “Netflix needs the movie theater, to kill the movie theater,” playing into the idea that streaming platforms are taking over, but there are still big events such as The Academy Awards that help spur on the release of films in real cinemas. In light of this, it might be time to take a look at how movie theaters actually make their money, and what could happen if Roma wins and shifts the movie-going paradigm.
First, movie theaters profit primarily from the sale of concessions, rather than movie tickets themselves: With the initial release of a movie, the production company often takes between 70 and 80 percent of the box office sales, whereas the theater can contract out concessions and keep most, if not all, of the profit for itself. Despite this, the demand for concessions will stay on the more elastic side, where people might not always be able or willing to pay for concessions, but will always have to pay for their ticket. Movie theaters will make less in times of economic downturn or trends in upward prices of more inelastic goods that will divert disposable income, and so going to a theater to see a movie might only be desirable in very specific circumstances. It may just be easier to pay the monthly fee for a streaming service that produces movies comparable to those released by the usual companies such as Disney and Warner Media. With this shift, Netflix could have less competition and similar streaming services (including Netflix) could move towards monopolizing movie production and releases.
Thus, though going to the movies provides a different, perhaps more extravagant, experience than staying home and watching Netflix on the couch, the ease with which a subscription can be purchased and virtually unlimited hours of content consumed has become more appealing to many consumers today. And, if Netflix is able to win an Oscar for a movie such as Roma, it is likely that they will continue with that trend of producing blockbusters that can be streamed anytime, anywhere, possibly leading to a further downturn of the movie theater industry and a the cementing of streaming services at the forefront of the movie industry. The bigger question is whether streaming services will completely drive out brick and mortar theaters and how a transition by those platforms to producing Oscar-worthy films in the long run will influence a change in the way people consume movies.