Killing fields lost to Amadaeus that year so even amoung the nominees they got it wrong. I agree it shouldn't be a people's choice award as then it would just reflect box office take but I think the rewarding of the same movie each year needs to change. I'm not sure how you do it but I think you can see from the nominations post expansion of the academy that more variety is being included so that is a start and should as old people die off lead to broader more popular appeal.
In one sense you could argue that the shape of water Win is a sign of this change as a Monster Movie won best picture from a director that used to do comic book movies. I just am not a fan of it.
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