The 87th Annual Academy Awards or the Oscars 2015 was expected to be one of the largest crowd-pullers in TV audience, riding on the grand success of the 2014 edition hosted by Ellen DeGeneres. However, the latest data from Nielsen N.V. (NLSN) prove that the gala event had failed to live up to its expectations this year.
The Walt Disney Company’s (DIS) ABC cable network televised show averaged 36.6 million viewers last Sunday – the lowest tally in six years and down 16% from a 10-year best of 43.7 million viewers clocked last year. The show had a 10.8 rating in the coveted demographic group of adults aged 18-49, declining 18% from last year.
Even the buzz in the social media was relatively docile according to the Nielsen data. Only 5.9 million messages about the Academy Awards were reportedly sent out through Twitter, Inc. (TWTR) in the U.S. on Sunday, compared with 11.2 million tweets last year.
Why the Sudden Plunge?
Several theories cropped up as possible explanation for the dismal viewership figures. The Academy Awards is arguably the most-watched entertainment show of the year and is second in the popularity list of live events behind the Super Bowl.
However, the relative lack of mass-appeal movies nominated for the big-ticket awards seemed to be a big turn-off for movie buffs. For example, while the nominated films in the Best Picture category in 2010 raked in $4.7 billion in revenues, the nominees for the 2015 edition were able to garner less than a billion dollars by the time the show was aired.
Host Neil Patrick Harris was also blamed for the poor turnout. Despite his best attempts to liven up the event through impromptu gigs and skits, the audience found his deliverance somehow lacking. Critics argued that despite his credentials as a skilled showman, he did not possess the skill sets required to host as big an event as the Oscars.
In addition, the awards show was reportedly boycotted by black viewers as most of the nominees in the major categories were white. Last but not least, the prime-time show was perceived to be a lengthy affair with in-between award times filled with drab comedy bits, musical performances and numerous commercial slots. In this age of social media, where streaming services and time-shifted viewing are easily available, movie lovers have the option to skip through all the unwanted activities and selectively watch the relevant portions later online.
Advertising in the Oscars
Big-ticket events like the Oscars are priceless to the advertisers as they generate large pool of live audience through television and real-time social media fervor. 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 then that a 30-second ad slot this year was sold for $2 million, up from $1.76 million last year and second only to a $4.5 million ad slot in the Super Bowl.
According to data from Kantar Media, the top five advertisers for the Oscars over the past five years were J. C. Penney Company, Inc. (JCP) ($50.8 million), HYUNDAI MOTOR CO LTD (HYMLF) ($44.9 million), Samsung Electronics Co. Ltd. (SSNLF) ($43.4 million), The Coca-Cola Company (KO) ($31.1 million) and American Express Company (AXP) ($28.8 million). While Hyundai and Coca-Cola opted out of the advertising slots in 2014, they were replaced by the General Motors Company (GM) and Pepsico, Inc. (PEP). Others like the McDonald's Corp. (MCD) and American Express have made the Oscars an advertising staple and have been associated since 1992 and 1993, respectively.
In addition to TV advertising, digital media and online portals spruce up their advertising by creating buzz through predictions and fan voting, red carpet activities and critiques of celebrity fashion, as well as coverage of post-Oscar parties. The Discover cards of Discover Financial Services (DFS) was one of the prime advertisers in the digital platform of ABC, which placed rich-media and display adds on select websites and mobile apps.
Ominous Signs for Advertisers?
With huge advertising money at stake, advertisers would surely want to have a decent ROI through a wider consumer reach. However, the latest viewership data from Nielsen seem to be disappointing for the advertisers. Ideally, a significant jump in price for the ad slots should have been commensurate with a rise in the live audience pool. That the overall TV advertising space was relatively sluggish this season and offered a glimpse of revival with exorbitant prices for the Oscars make it all the more intriguing.
During 2010-2014, the top five advertisers spent $198.9 million, representing 49% of the total ad revenue. The Academy of Motion Picture Arts and Sciences had a fairly steady pool of sponsors in the past and typically 75% of the advertisers returned the following year about 10 years ago. However, the recession led to high turnovers and recorded only 43% retention in 2014.
Whether this year’s low audience pool drive away more advertisers in the future remains to be seen. Consequently, much of the sustenance of the Academy depends on ABC’s ability to attract advertisers.
Moving Forward
Despite a sharp fall in the live audience, the 2015 Oscars outperformed the Grammy Awards on CBS Corp. (CBS) by 30% in 18-49 (10.8 rating vs. 8.3) and by 11.8 million total viewers (36.6 million vs. 24.8 million), and the Golden Globe Awards on Comcast Corp’s (CMCSA) NBC by 86% in the demo and by 17.3 million total viewers (36.6 million vs. 19.3 million).
Can the Oscars revive its lost sheen and stage a rating boost in the next year with higher audience pool? Only time can answer this million-dollar question.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment