The stage is set for the 89th Academy Awards or the Oscars 2017 gala on this weekend. Movie buffs around the world are expected to remain glued to the screen to catch every minute of this mega event.
The media is likely to leave no stone unturned to cash in on this frenzy, either. Whether it is the traditional media channels or the digital media, the pulsating coverage and related analyses are likely to offer a priceless opportunity for advertisers and sponsors to draw the undivided attention of the audience.
Advertising in the Oscars
Big-ticket events like the Oscars are important to advertisers, as they generate a large live audience through television and social media. Viewers usually tend to watch the program live rather than record the show and skip through the ads. The event also gives an opportunity to leverage the glitz and glamour of the Hollywood industry on which billions of dollars ride. No wonder that a 30-second ad slot this year was sold for $2 million, second only to the ad slot in the Super Bowl.
According to a data from Kantar Media, Oscars generated $115 million in ad revenues last year from 80 commercials, up 24% from 2012 that had 60 ad spots. In addition to TV advertising, digital media and online portals spruce up their advertising by creating content and developing buzz through predictions and fan voting, red carpet activities, and critiques of celebrity fashion and coverage of post-Oscar parties.
Enter Kohl’s: Will the Sponsorship Gamble Pay Off?
In order to capitalize on this huge advertising platform, retailer Kohl's Corp. KSS has decided to sponsor this event for the first time this year, when one of its competitors, J. C. Penney Company, Inc. JCP snapped ties with the Oscars after 14 years of association. Kohl’s expects the sponsorship deal to better connect with its core customers while attracting newer ones to bolster its sagging sales.
This beleaguered Zacks Rank #5 (Strong Sell) stock has been struggling over the past few quarters, owing to lower sales of apparel and accessories and a general slowdown in consumer spending. Kohl’s intends to have a significant top-of-the-mind presence in the month leading up to the award show using the hashtag #TheGoodStuff. The company also plans to utilize this campaign to re-launch its largest private label brand, Sonoma to further generate incremental sales.
Oscar Nominations Can Also Work Wonders
The brand value of Oscars also helps production companies and movie distributors to rake in more revenues. An Oscar win or even a validation stamp of the nomination makes movie buffs more interested in the film and increases its shelf life. The hype surrounding a movie getting a nomination is likely to yield more box office collection through higher DVD sales, streaming or satellite rights and higher theater coverage.
Lions Gate Entertainment Corp. LGF.A collected 26 nominations this year, with the musical La La Land alone getting record-tying 14 nominations. If this film manages to get the coveted award for most of the leading categories that it has been nominated for, this Zacks Rank #5 stock can anticipate generating huge revenues.
With a total of 18 nominations, Paramount Pictures, an operating unit of Viacom Inc. VIAB, came in second in the distributor rankings followed by A24 and The Walt Disney Company DIS with 10 and eight nominations, respectively. Amazon Studios, a division of Amazon.com, Inc. AMZN has seven nominations in its kitty, the bulk of which is from the film Manchester by the Sea.
In its concerted effort to focus on the film distribution business, Amazon bought the distribution rights of Manchester by the Sea at the 2016 Sundance Film Festival for $10 million. The film was distributed traditionally and since its Nov 2016 debut, it has reportedly minted almost $39 million at the domestic box office. The Oscar nominations are likely to further help Amazon Studios garner significant revenues for its parent firm, which currently carries a dismal Zacks Rank #5.
The Oscars drew an estimated 34.4 million total viewers last year. The viewership tally is likely to exceed this year, thanks to political-infused messages from the likes of Meryl Streep. Consequently, sponsors and movie distributors can keep their fingers crossed and anticipate making significant money from this extravaganza for a likely reversal of their fortunes.
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Walt Disney Company (The) (DIS): Free Stock Analysis Report
Amazon.com, Inc. (AMZN): Free Stock Analysis Report
J.C. Penney Company, Inc. Holding Company (JCP): Free Stock Analysis Report
Kohl's Corporation (KSS): Free Stock Analysis Report
Viacom Inc. (VIAB): Free Stock Analysis Report
Lions Gate Entertainment Corporation (LGF.A): Free Stock Analysis Report
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