Analysis: Oscars pump up Hollywood economy

LOS ANGELES, Feb. 25 (UPI) -- The Academy Awards are more than an occasion for the film industry to strut its stuff on the world stage -- they also give Hollywood an opportunity to promote its brand, and they generate a significant spike in economic activity for Los Angeles.

Johnny Grant, the Honorary Mayor of Hollywood who is best known for presiding over Walk of Fame ceremonies, said the economic benefits include employment opportunities for a wide range of people who support the entertainment industry.

"From catering to security to Botox," he said.

Ever since the Academy of Motion Picture Arts and Sciences moved the awards ceremony to its new permanent home at the Kodak Theatre on Hollywood Boulevard in 2002, the Hollywood business district has enjoyed a greater share of the annual bonanza. The Kodak is a major feature of Hollywood & Highland, the hotel and retail center that most prominently represents a years-old urban revitalization campaign.

Leron Gubler, President and CEO of the Hollywood Chamber of Commerce, told United Press International the presence of the Academy Awards has increased tourism in the district, and the area has benefited in other, unexpected ways.

"We have a lot of party venues now, such as the Roosevelt Hotel and the Henry Fonda Music Box Theater," he said. "(The entertainment industry) spends a fortune on Oscar parties, and it really is a shot in the arm for the economy."

The Oscars also bring a certain amount of disruption -- if not distress -- to local merchants. Street and sidewalk closures are part of the package -- and the chamber hears complaints about that from merchants -- but Grant said the larger number of people coming into the area compensates for the logistical difficulties.

"(The merchants) all complain all the time, but they all do very well," he said. "There is not a store anywhere near the Kodak Theatre that people can't get into. People come here from all over the world just to be here for this week -- they have plenty of time and they do a lot of shopping."

Developers recently announced plans for two new major projects a few blocks east of the Hollywood & Highland complex, at the fabled intersection of Hollywood and Vine.

Gubler said Dallas-based Gatehouse Capital Corp. and Foster City, Calif.-based Legacy Partners Inc. plan to break ground in 2006 on a $325 million residential and retail complex anchored by a 300-room W Hotel.

The Nederlander Producing Company of America Inc., which owns the historic Pantages Theatre near Hollywood and Vine, is developing a $350 million complex that Gubler said would include 1,000 residential units and 200,000 square feet of retail space.

The district is already attracting upscale retailers that offer a contrast to the T-shirt stores, tattoo parlors and wig shops that have tended to dominate the Hollywood Boulevard landscape for decades. Bed, Bath & Beyond and Borders have opened stores on Vine Street, and Virgin Records recently announced it will open a shop at Hollywood & Highland.

Gubler said the trend is not likely to push the T-shirt stores out of the area.

"We'll still have souvenir shops and wig shops, a lot of those will survive," he said. "Maybe we won't have four wig shops -- maybe we'll just have two."

The Academy Awards is one of the two biggest media events of the year, along with the Super Bowl. Gubler was asked why advertisers don't make such a big deal of rolling out snazzy new ads for the Oscars, the way they do for the Super Bowl.

"I think it's because the show itself is what captivates the public," he said.

Just how captivated the public actually is by the Academy Awards telecast has become a matter of some concern for the academy. Telecast producers openly acknowledge that the appointment of raunchy comedian Chris Rock as host this year was perhaps risky -- but it was an intentional play for a larger and younger audience.

"This will either be the best thing we've ever done or the worst thing we've ever done," said academy spokesman John Pavlik. "Chris could come off as a hero, but there is a danger. He needs to make sure that the audience is with him. It would be pretty tough to recover from a cold audience."

The stakes are high, both for the academy and for ABC, which televises the Oscars annually. The network pays the academy $47 million for broadcast rights, according to Pavlik, and it can only recover its cost if the show delivers the kind of audience advertisers are after.

The academy's push for a younger audience is evident even in its choice of artwork for this year's poster, by designer Brett Davidson.

"I wanted a big, bold Oscar and bright, young, fresh, energetic colors that would appeal to a younger demographic," he said.

Davidson also said his design lends itself to motion graphics and various types of formats that are used online -- another indication that the academy is reaching out for younger, or at least more technologically engaged, fans.

The Oscars may often seem to be nothing but an exercise in self-congratulation, but Grant said their underlying purpose is more pragmatic: to promote the Hollywood brand.

"Hollywood is the best-known brand name in the world," he said.

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