Why do the Academy Awards Exist?

The Academy Awards come around every year, and for better or worse form a big part of our movie culture. Winning an Oscar is a big deal in our society. It is also a big deal for the studio, because it means money. According to the Huffington Post, the money a studio can make off of an Oscar win is substantial

However, it is a common realization that the Oscars regularly snub excellent films, while giving awards to poor films. This is of course a subjective analysis, but the feeling is nonetheless pervasive, even among prominent film critics. The fact that the Academy declares a film the best does not mean it is the best, it does not mean that history will see it as the best, and it doesn't even mean that the critics of the time see it as best. It really only means that a small group of people see it as especially deserving an award.

Does this mean that the Academy Awards are irrelevant and should be scrapped? I don't think so. I think the thoughts above miss the point of the awards.


The purpose of the Academy Awards should not be taken as one of simply honoring the best. This is completely subjective, and would happen anyway in the reviews of critics. The purpose, in my opinion, is to encourage the creation of movies that would not otherwise be made.

The existence of the Academy Awards changes the economic incentives of movie creation. There are certain movies that would make tons of money regardless of any awards. Transformers, Lord of the Rings, Jaws, Star Wars. These are movies that people like, movies that are culturally important. But we don't want them to be the only movies that are made. The academy awards can give a big boost to movies that might not make so much money outside of the award framework. Movies like The King's Speech, or The Artist. Those movies are culturally important as well.

What matters in funding movies is not whether the film will actually win, but rather whether the studio thinks it might win. It changes the risk/reward calculus in an important way. It means many movies will be funded by studios competing for limited award space. A studio is more willing to fund an ambitious art piece when they know there is a culturally important award system for artsy movies.
Also important is the fact that not just winners but also nominees get a lot of recognition. There is even a benefit when a worthy film is snubbed, because critics can make headlines talking about the Academy's mistake, driving publicity for the good movie. The awards system fuels a culture where movies are taken seriously as art, not just entertainment. Even when the people involved screw up, the huge publicity involved in looking for the "best" is a big cultural benefit.

An interesting corollary of this way of thinking is that it makes sense for the Academy to be prejudiced against big budget blockbusters: those movies don't need the help. Of course sometimes they pick big budget movies, which I think is a shame (perhaps the system benefits from a perception of objectivity). They may or may not use this sort of reasoning in choosing the particular films they choose, but this line of thought helps us understand the social value of the oscars. It encourages types of creativity that would not otherwise be encouraged.

The particular movies that come out may or may not be a valuable contribution to culture, but I think diversity of films is something we should value. We will get big budget blockbusters no matter what. The oscars protect the market for weaker art films. Some of them are good, some of them suck, but we all benefit from their existence.