by: Dr. S. Abraham (Avri) Ravid (Sy Syms Professor of Finance and entertainment business expert) 

The Oscars, premiering on March 15, 2026, usually bring to a close the “award season” and provide a final seal of approval to the “best” picture, “best” actor, “best” director and other “best” talent above and below the line.

However, this year Oscar night may bring less closure and more existential questions about the very heart of what a movie is and is not. Let me start with the relatively easy question. Why can a film that runs over three hours such as Oppenheimer, winner of the best picture in 2024, compete in the Oscar race whereas Adolescence, a successful Netflix mini-series with high production values and a total run time of about 4 hour cannot?  Do seven days in a physical theater (the eligibility requirement for Oscars) matter when streaming is the leading format of film consumption, shares of AMC (a leading theater chain) have dropped by 99% in five years and the academy for the first time in history, has eliminated in-person screenings for voters.

Our research covering decades of data shows that, historically, movie directors needed a different set of skills compared to directors of other filmed entertainment such as TV series and commercials. However, today as many “TV” series are just one long story rather than separate episodes and production values have increased, the line between the theatrical film, the gold standard of the profession, and other filmed entertainment seems much more blurred.

Then there is the elephant in the room, i.e. AI which raises additional existential questions.

What percentage of work generated by AI disqualifies a movie from competing in the academy awards? For example, is using chatbots to edit a script acceptable? Many screenwriters do that. How about writing a first draft with ChatGPT?

What is the difference between a film laden with CGI and a film where the same effects are produced by AI? Are AI generated special effects permissible? How about minor supporting roles performed by AI-generated-actors? How about more significant roles? Where do we draw the line?

The industry was shaken by an AI generated clip showing Tom Cruise and Brad Pitt boxing and cursing. I am not too worried about that. Messrs. Cruise and Pitt have lawyers that can easily enforce the rules adopted in the most recent 2023 contracts, but how about other less well-known actors?

Our research shows that theatrical directing is a very risky profession. Almost 90% of first-time directors direct only one or two films and then return to their previous vocations.  Given these lopsided odds, we find that first time film directors are more willing to take risks and adopt novel technologies. While our work studies earlier technological breakthroughs, I do not doubt that today’s early career directors will embrace the risky but endless and cheap possibilities that AI provides The 2023 contracts following the Hollywood strikes may seem quaint now, and it is difficult to see how the upcoming 2026 contract negotiations can do much better given a technology which is evolving at lightning speed.

And finally, will audiences care? Our research shows that there are some types of movies that tend to do better than others, in particular, sequels and family movies. Surprisingly, the impact of stars on the success of movies is unpredictable, but directors and stories matter (economically) a lot. How does the new industry landscape fit into this?

Perhaps at the end, studios will produce an endless flow of AI generated series with a few precious films designated as “live acting” where actors act in front of a virtual green screen. This may also bring film acting closer to theater acting. Since the sets and the supporting roles will be mostly added in post-production actors can act as if they were in a play. Close-ups are different than projecting to a large Broadway house, but maybe, one day, we will see a convergence of the Tonys and the Oscars….