While the 91st Academy Awards ceremony was the biggest event of the year for Hollywood, it was an even bigger night for Netflix (NASDAQ:NFLX).
Sunday night the streaming giant tied Walt Disney, Twenty-First Century Fox, and Comcast-owned Universal for the most Oscar wins by a studio this year, taking home four statues. Even more importantly, those wins came in several high-profile categories, after years of Netflix only achieving nods for its documentaries.
This followed a similar performance at the Golden Globes last month, when Netflix nabbed five wins -- more than any other network, studio, or streaming service.
But winning Oscar gold goes far beyond mere bragging rights: The wins will help Netflix attract top talent and raise its profile among current and future subscribers.
Check out the latest Netflix earnings call transcript.
A big night
Alfonso Cuaron's Roma, a retrospective of the director's childhood released by Netflix, took home three of the Academy's top awards: best director, best cinematography, and best foreign-language film. Cuaron is the first person in Oscar history to win the award for best cinematography for a movie they also directed.
Netflix also added to its haul of documentary glory, winning the best documentary (short subject) award for Period. End of Sentence.
The halo effect
There's a well-known phenomenon that occurs in Hollywood once movies are nominated for best picture. While it varies from year to year, the nominees typically see a boost to their box office, as the Oscar nod brings renewed interest from moviegoers. In recent years, these films have seen ticket sales increase 20% on average after the nominations have been announced, according to Box Office Mojo.
While some of Netflix's most high-profile movies have been shown in a handful of theaters in order to qualify for Academy Award consideration, the company isn't really concerned with ticket sales. Netflix makes nearly all of its revenue from subscribers, so the company is interested in raising its profile for other reasons.
Quality, not just quantity
Netflix's coveted Oscar wins send a message to both current and potential subscribers about the quality of the major motion pictures being created by Netflix's film studio. The company has long been known for the superiority of its television series. Last year, Netflix made history by tying AT&T's HBO and taking home 23 Emmy Awards -- grabbing a piece of the limelight HBO had kept for itself over the previous 16 years. The Oscar wins signal that Netflix is now excelling in movie production, as well as in TV series.
It also helps attract the best filmmakers in Hollywood, by letting them know that creating movies exclusively for Netflix won't keep them from receiving major awards consideration. Roma was the poster child for that argument, taking home a host of awards this season. In addition to its three Oscars, Roma also won two Golden Globes -- best director and best foreign-language film -- and four BAFTAs (British Academy of Film and Television Arts awards) including best film, best cinematography, and best director.
The big push
This was all part of a larger push by Netflix to raise its chances of bagging an Oscar this year. The streaming service broke with its long-standing tradition, giving several of its high-profile films an exclusive theatrical window before they debuted on Netflix's streaming platform. The company has long supported day-and-date release -- when a film is available for subscribers on the same day it's released in theaters.
Roma got a three-week theatrical run before being available to Netflix customers. Other prestige projects were given similar treatment, including the Coen brothers' Western anthology The Ballad of Buster Scruggs, Andy Serkis' Mowgli: Legend of the Jungle, and the Susanne Bier-helmed Bird Box.
Netflix is estimated to have spent between $25 million and $30 million on Roma's Oscar campaign -- nearly twice the $15 million it paid for the film itself -- in the hunt for its first high-profile Academy Award.
Disrupting existing paradigms
Having conquered linear TV, Netflix is intent on disrupting the existing Hollywood paradigm. Its success at the Oscars will ultimately bring greater interest from potential subscribers, particularly when they can't see the latest Academy Award-winning movie in theaters.
With 139 million subscribers worldwide, and more joining every day, award-show wins like these will give the holdouts one more reason to plunk down their $8 to $16 per month for a Netflix subscription.