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Image: Tom Wilkinson, George Clooney
Myles Aronowitz  /  AP
‘Michael Clayton’ may have been in theaters for months, but Warner Brothers will make its big promotional push in time for the Oscars.
By
msnbc.com contributor
updated 2/22/2008 5:31:25 PM ET 2008-02-22T22:31:25

The movie “Michael Clayton” has been in theaters for five months, but the real advertising blitz came last week promoting seven Academy Award nominations and the movie’s upcoming release on DVD.

Movie studios know that when it comes to the Oscars, the most mileage and the biggest dollars come from the living room not the box office. Consumers spent $23.5 billion last year on DVDs, including $7.5 billion in rentals, according to The Digital Entertainment Group, a Hollywood trade group.

"DVD is the largest single source of income for studios," says Ralph Tribbey, editor of the DVD Release Report, an industry publication covering new DVD releases.

The prospective home video windfall is especially welcome to this year’s round of Oscar nominated films, which on average delivered disappointing box office revenues, each grossing less than $59 million so far. (“Michael Clayton” collected $47.7 million.)

The one exception is “Juno,” which earned $119.4 million through Feb. 14 and has four nominations for best picture, best screenplay, best actress (Ellen Page), and best director (Jason Reitman.)

“Juno” comes out on DVD in April for $29.98, with a special edition two-disc version of the film priced at $34.98. Starbucks will promote the movie in its stores.

“ ‘Juno' has pierced the popular culture in a way few films do,” said Steve Feldstein, a vice president at Twentieth Century Fox Home Entertainment, which is distributing the movie on DVD. “The exposure and cache the Academy Awards bring will only heighten interest in owning it.”

Sometimes the buzz of an Oscar nod can give a movie with limited marketing and distribution a much bigger life after the theaters. The 2006 best picture award winner “Crash” saw a 27.3 percent lift in DVD sales in the seven weeks after it was nominated and a 143 percent increase in DVD sales in the seven weeks after it won the title, according to Nielsen VideoScan, which tracks retail DVD sales.

“ ‘Crash’ undoubtedly appeared in retailers because of its Oscar win,” said Aram Sinnreich, managing partner at Radar Research, a Los Angeles media consulting firm. “It can be a significant boost for independent films.”

So goes the story for “Half Nelson,” which got a 2007 best actor nomination for Ryan Gosling’s performance. The movie generated about $2 million more than expected in DVD sales due to the Oscar attention, said Jeff Sackman, CEO of ThinkFilm, the Toronto studio that made the movie.

“It’s the ultimate in marketing tools,” Sackman said. He also credits $1 million in DVD revenue for a 2007 best documentary nomination for “Born into Brothels” about children of prostitutes in Calcutta. ThinkFilm has two Oscar nominees this year, “Taxi to the Darkside” and “War/Dance,” both in the best feature documentary category.

Marketing and production costs eat away box office revenues, as does sharing dollars with theaters. DVDs, on the other hand, offer higher profit margins because they are inexpensive to produce and plenty of people sit back and wait to see the films at home. Some studios also work out revenue sharing deals with video rental companies like Netflix and Blockbuster, giving them a cut per rental.

Despite the DVD boon, Oscar talk did manage to extend the box office life of “There Will Be Blood” which has eight award nominations, including one for best picture and best actor for a performance by Daniel Day-Lewis. Sinnreich said the Academy Awards attention extended the theatrical run of the movie and expanded the number of theaters showing the film. “It was essentially an indie film that has become a major motion picture entirely because of its Oscar buzz,” he said.

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