The Department Of Justice Is Getting Involved In The Netflix And Oscars Debate

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The Department Of Justice Is Getting Involved In The Netflix And Oscars Debate

Should Netflix original movies and the films of other streaming services be eligible for Oscars? Some, like legendary director Steven Spielberg, feel that the theatrical experience should be preserved and Netflix movies should not be eligible for Academy Awards, while others feel that a movie is a movie, no matter the distribution method. Now a new and unexpected voice is weighing in on the debate: the United States Department of Justice.

According to Variety, the DOJ has warned the Academy of Motion Pictures Arts and Sciences that any potential rule changes that are enacted in order limit the awards eligibility of streaming service films, like those from Netflix, could enter into territory of antitrust and competition law. Makan Delrahim, the chief of the Department of Justice’s Antitrust Division, wrote a letter to Academy CEO Dawn Hudson to communicate these concerns about how such rules might be written.

If the DOJ inserting itself into this industry debate seems out of the blue, it’s not. The letter from the DOJ to the Academy was prompted by reports that industry titan and Academy board member Steven Spielberg intends to push for rules changes for Oscars eligibility. Specifically, that he wants to restrict those films that open theatrically and debut on streaming services around the same time.

In his letter to Dawn Hudson, Makan Delrahim cited Section 1 of the Sherman Act, which “prohibits anticompetitive agreements among competitors.” If the competitors of an industry (the non-streaming entities in Hollywood) agree to essentially lock out new competitors (Netflix and the other streaming services), in order to protect their own profits and impede the newcomers, it could violate antitrust laws.

You might be asking yourself, how exactly does exclusion from the potential to win an Oscar constitute suppression of competition and potentially put this issue into the realm of antitrust? After all, it’s just an awards show and a golden statue. Well, the issue arises if the exclusion from the Oscars diminishes the sales of the films excluded. Basically, if eligibility for Oscars and inclusion in the ceremony confers a financial benefit, exclusion from the ceremony could be considered a deliberate attempt to suppress competition.

The Academy has said that it responded to the DOJ’s letter and noted that the Academy’s Board of Governors will meet for its annual awards rules meeting, where such changes to eligibility could be proposed, on April 23.

This is an interesting development and I will be very curious to see how it plays out if new rules exclude Netflix and streaming films from Oscars eligibility. The competition suppression argument is interesting and I’d be curious how such a thing could or would have to be measured to make the case. If streaming movies only have very limited theatrical runs to qualify during awards season, an Oscar nomination or win wouldn’t theoretically impact ticket sales at the box office. I guess the diminished sales would then have to be measured in streaming service subscriptions.

This is just the latest chapter in the saga of Netflix and the Oscars as the industry grapples with the rapid changes that have come as streaming services have become major power players. At this most recent Oscar ceremony, this issue took center stage as Roma was nominated for 10 Oscars and won 3.

Theater owners and some in the industry are against streaming movies being eligible for Oscars and think that they are essentially TV movies that should compete for Emmys instead. Netflix has pushed back against Steven Spielberg’s claims and others like Ben Affleck, who recently starred in Netflix’s Triple Frontier, think that there is no difference between streaming and theatrical releases.

We’ll continue to keep you updated on this debate that shows no signs of slowing down anytime soon. In the meantime, check out our 2019 release schedule to keep track of all the biggest movies coming out this year.