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What will Oscar telecast ratings be like in a year in which none of the nominated films are boxoffice blockbusters?

When Bruce Davis thinks about the future of the Academy Awards telecast, he thinks big. As executive director of the Academy of Motion Picture Arts and Sciences, Davis is charged with exploring the best opportunities for Hollywood's biggest night -- and that doesn't necessarily mean on broadcast television forever. Although he is happy with AMPAS' current deal with ABC through 2014, Davis can't help but muse on what shape the Oscars might take a decade from now.

"I've been thinking for a number of years there might be an era when the Oscars might go on as pay-per-view," Davis says. "You may not have to sell that many subscriptions. Large boxing events do very well. We've had offers from cable outlets in the past. I take it very seriously."

Perhaps it's understandable that Davis seems open to options outside the broadcast business that the Academy Awards has called home for 60 years. Speculation is widespread this year that the Oscars could be facing its lowest ratings ever. The films vying for the best picture prize -- Focus Features' "Brokeback Mountain," Universal's "Munich," Lionsgate's "Crash," Sony Pictures Classics' "Capote" and Warner Independent Pictures' "Good Night, and Good Luck" -- are all small, thought-provoking films that have made more of a cultural impact than a financial one.

That's a concern for AMPAS, which relies heavily on the Oscars in the long term for its fiscal stability. That's why the Academy works hard to maintain the viability of the franchise through creative programming, from its audacious selection of Jon Stewart as host to myriad other elements of the big show.

Gil Cates, who is taking charge of the Oscar ceremony as producer for the 13th time, acknowledges that while this year will be a challenge, it won't be an insurmountable one. All that needs to be done is to give film fans of all kinds something to watch.

"There's a big world out there, and the majority of the viewers went to see (Buena Vista's 'The Chronicles of Narnia: The Lion, the Witch & the Wardrobe') and (Paramount's) "War of the Worlds," Cates says. "What we try to do is give films the appropriate space and energy so that everyone has somebody to root for."

Everyone has a theory on what brings viewers to the Oscars, but few doubt that ratings are inextricably tied to the popularity of the films up for the most awards.

If recent Oscar telecast history has taught us anything, it's that big winners at the boxoffice translate into big TV ratings for the ceremony. Take, for example, the 1998 Oscar telecast, which was the highest-rated of the past decade. That was the year boxoffice behemoth "Titanic" was honored with 14 nominations and 11 awards, including the best picture prize. In contrast, the 2003 Oscar ceremony, which gave six statuettes to 2002's "Chicago" (a film whose boxoffice was considerably more modest than that of "Titanic"), fared poorly, garnering the telecast's lowest ratings in decades.

"When the biggest contenders are smaller films that reach smaller audiences, it gives people less of an interest to tune in," says Gitesh Pandya, founder and editor of Boxofficeguru.com. "It's all about fans tuning in to see their favorite movies win awards."

Veteran producer Laura Ziskin (1990's "Pretty Woman," 2002's "Spider-Man"), who served as executive producer of the Oscars in 2002, believes the Oscar telecast's ratings fortunes are not only affected by the films that get nominated, but by all of the award shows that precede it, including the Golden Globes.

By the time Oscar rolls around, its competing shows sap some of the interest.

"The Academy Awards is still the big kahuna, but I think it's diluted by how many award shows are out there," Ziskin says.

Although the potency of this year's Oscar telecast is being called into question, it has proved itself to be one of the biggest television attractions of the year. Broadcast television itself has proved as of late that a big event can generate a mass audience like nothing else in media. On Feb. 5, ABC drew nearly 90.7 million to the entire broadcast of the Super Bowl.

"Certain programs like the Rose Bowl and Super Bowl show you that when you have big events, you can drive big ratings on network television," says Andrea Wong, executive vp alternative programming, specials and late-night at ABC.

Last year, the Oscars drew 42.1 million -- down 3% from the previous year. Nevertheless, it was considered a success because the viewership among adults ages 18-34 -- the younger demo advertisers covet -- was up 5%. Although the Oscars tend to skew female and older, the telecast did especially well among male teens and blacks, a trend attributed to the choice of host, comedian Chris Rock.

Still, overall Oscar ratings have been on a downward trend for years -- a reality AMPAS recognizes.

"We all have kind of accepted the fact that in the current television universe, it's hardest for any kind of broadcast to get the kind of ratings we got in the old days," Davis says. "But we pretty reliably come in second every year in terms of TV programming. That makes us a very valuable commodity no matter what the actual rating is."

The Oscar telecast is a very valuable commodity to AMPAS, which derives roughly three-quarters of its annual income from the license fee ABC pays to the organization.

A little more also could come in if ABC earns advertising revenues above a contractually agreed-upon level, another sum affected by ratings delivered the previous year. Financial statements disclosed that AMPAS garnered $51 million of the $68 million in total revenue the organization reaped in 2005 from the Oscars, which costs AMPAS $19 million to produce.

In February 2005, AMPAS and ABC came to terms on a long-term deal that will keep the Oscars on the network through 2014. Although neither side will comment on the specifics of the deal, Davis admits he was surprised to discover that the value of the Oscars is higher than ever despite the erosion of its ratings.

"I thought we would get to a point where no one entity would afford to pay us what we get used to living on for a year," Davis says. "But it turned out I was completely wrong. Even though the dial continued to fragment and the percentage of the audience is getting smaller, the license fees kept going up because it became harder for any television show to muster that kind of viewership."

AMPAS also licenses broadcast rights to the Oscars to countless territories around the globe through Buena Vista International. Each territory requires a different deal, from the agreement with satellite service Star Movies to show the Oscars in India and Taiwan through 2010 to TNT Latin America's pact in countries such as Mexico and Venezuela through 2009. But despite the Oscar's global omnipresence, the license fees AMPAS collects from such deals contribute little to the bottom line.

"The international fees are disappointingly small," Davis says. "In aggregate, it's a nice little chunk but pales in comparison to the domestic license fee."

But the tastes of worldwide audiences also must be taken into account when Cates plans the Oscars. For instance, though dance routines might not be popular in the U.S., there could be a return to such entertainment on the Oscar telecast because they're beloved everywhere from South America to Japan. "People in this country are less in love with dance," Cates says. "But think of how big the Latino audience is; even in this country, they're the fastest-growing segment."

So many different elements go into pleasing so many different audiences that it might be simplistic to lay Oscar's fortunes at the feet of its biggest films.

"Regardless of whether the movies are small or large, you make the creative as strong as possible: the presenters, musical numbers, the host," Wong says. "Cates has done it before and can craft a strong show creatively."

All eyes are on Stewart, host of Comedy Central's "The Daily Show." While he has received high praise for having the kind of quick wit and socially conscious commentary that should jibe well with what could prove to be a politically charged evening, Pandya thinks the selection of the previous year, Rock, resulted in more curiosity on the part of those who don't already watch the Oscars.

"I don't think Jon Stewart has created as much buzz as Chris Rock did," Pandya says. "But he's popular and well known."

While the choice of host gets much pre-show attention, Cates plays down its impact on the Oscars.

"I honestly think the Oscar rating is only marginally affected by the host," Cates says. "The largest impact on the rating of the show is the involvement that the audience feels with the films."

The best picture nominees are a polarizing bunch, from "Brokeback," which is said to have alienated conservative viewers with its depiction of a homosexual romance, to "Munich," which has been criticized for its dovish take on Middle East politics. And during a year in which controversies in the headlines (like the war in Iraq) are bound to be referenced by Stewart or opinionated Oscar winners at the podium, there are differing views on what that will mean for the show.

"When the times are interesting and people have a lot to say, that's great, because spontaneous unscripted things happen," Ziskin says.

Cates believes that the whole business of predicting how the Oscars will fare on television is too easily subject to overanalysis. At the end of the day, the history of the franchise speaks for itself.

"What gets them in the tent is the show you watched with your grandparents," Cates says. "It's burned into your subconscious. In a shaky environment, it's nice to come back to something that has consistently been there for 78 years."
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