DOJ & Exhibitors Weigh In On ‘Netflix War’

Doj Exhibitors Weigh In On Netflix War

A surprise third player has entered the debate between Netflix and the Academy of Motion Picture Arts and Sciences (AMPAS) over streaming service film eligibility at the Oscars. That player? The United States Department of Justice.

Variety reports that the chief of the DOJ’s Antitrust Division, Makan Delrahim, has penned a letter to AMPAS CEO Dawn Hudson in which he expressed concerns that new rules would be written ‘in a way that tends to suppress competition’.

In other words, it hints that re-writing the rules so as to exclude or limit the eligibility of specific streaming services could potentially violate antitrust laws. Delrahim says:

“In the event that the Academy – an association that includes multiple competitors in its membership – establishes certain eligibility requirements for the Oscars that eliminate competition without procompetitive justification, such conduct may raise antitrust concerns…

Accordingly, agreements among competitors to exclude new competitors can violate the antitrust laws when their purpose or effect is to impede competition by goods or services that consumers purchase and enjoy but which threaten the profits of incumbent firms.

if the Academy adopts a new rule to exclude certain types of films, such as films distributed via online streaming services, from eligibility for the Oscars, and that exclusion tends to diminish the excluded films’ sales, that rule could therefore violate Section 1 [of the Sherman Act].”

The letter came in response to reports that Steven Spielberg is planning to push for rules changes to Oscars eligibility that restricts films that debut on Netflix and other streaming services around the same time that they screen in cinemas.

An Academy spokesperson responded to the trade saying: “We’ve received a letter from the Dept. of Justice and have responded accordingly. The Academy’s Board of Governors will meet on April 23 for its annual awards rules meeting, where all branches submit possible updates for consideration.”

The reports about Spielberg combined with the various “Roma” Oscar wins and the sheer size of Netflix has triggered a huge amount of debate in the industry – one that’s dominating the annual cinema exhibitor convention CinemaCon which is underway this week in Las Vegas.

Exhibitors have been tubthumping the theatrical experience at the convention all week, saying that they’re happy to let streaming services co-exist with them peacefully so long as they abide by their rules – more specifically their exclusive theatrical release window.

Speaking at the event, National Association of Theater Owners CEO-president John Fithian says:

“All we ask is that powerful movies of all genres, made by content creators who want their work on the big screen, be given the time to reach their full potential in theaters before heading to the home. Theatrical exhibition is the keystone of this industry, and there is no replacement – both artistically and commercially – for the impact of a break‐out hit. In this new climate it’s important to ask, how does any given movie stand out among endless choices in the home? Everyone in this room knows the answer to that question: a robust theatrical release provides a level of prestige to a movie that cannot be replicated.”

Actress Helen Mirren, who appeared on stage to promote Bill Condon’s “The Good Liar,” appealed to the crowd saying: “I love Netflix, but f— Netflix… there’s nothing like sitting in the cinema and the lights go down” to which she received applause.