For about an hour inside the Dolby Theater last month, it seemed like Netflix might have finally pulled it off. All Quiet on the Western Front had beaten Babylon for best score and Elvis for best cinematography and production design, suggesting to me, and the Netflix folks I was sitting near, that a best picture shocker was at least plausible. Alas, despite spending more than $100 million campaigning over the past 7 or 8 years, co-C.E.O. Ted Sarandos still hasn’t taken home that top trophy. And now, the Academy appears likely to do something that would certainly annoy Ted & Co., and might make it costlier to win that coveted prize.
It’s all being kept quiet for now, but the Oscars are poised to enact one of the most significant rules changes in the Academy’s recent history, potentially adding a new theatrical distribution requirement for films to be eligible for best picture. According to a plan that is said to be supported by Academy C.E.O. Bill Kramer, and which must still be approved by the 54-member board of governors at its meeting in late April, films will need to play in theaters in 15 or 20 of the top 50 markets in the U.S. to be eligible. That would surely bring smiles to executive suites at the theater chains and the traditional studios, and frowny-faces to the leadership of Netflix.
The Academy declined to comment, but here’s what’s going on, based on my conversations this week with studio executives and Oscars insiders. For the past few months, and really since Kramer took over for Dawn Hudson last summer, the Academy has been talking with studios, streamers, and small distributors about how to better leverage the Oscars to promote moviegoing. The Academy has always tried to stay out of the business of movies, but it does maintain a requirement—relaxed during the pandemic, but reinstated last year—that films play theatrically for at least a week in one of six markets: L.A., New York, San Francisco, Chicago, Miami, or Atlanta. A streamer can put the film online day-and-date, but it can’t stream it before it appears in a theater.
That’s a pretty minimal theatrical requirement, and Kramer and some governors want to mandate a bigger footprint. The goal isn’t to hurt streaming, they argue, but to support elements of the art form—especially crafts like sound and visual effects—that were designed for theaters. The move would effectively force distributors to play their Oscar contenders everywhere from Orlando to San Diego—at least in one theater, or a handful of theaters, in 15 to 20 markets.
Seems reasonable, right? Sure, 300 films qualified for best picture this year, so there’s a question about whether the cost of multi-market releases will exclude some low-budget movies, and whether the shrinking number of U.S. theaters can absorb all these awards movies in December, when blockbusters like Avatar: The Way of Water and Spider-Man: No Way Home often hog screens. But the move would give audiences greater access to these films in the venues in which they were meant to be seen, and maybe generate more interest in the Oscars outside the bicoastal elites. Plus, one source says the Academy has been assured by the National Association of Theatre Owners that capacity wouldn’t be a problem.
The Power of the Oscars
This is all coming at a pretty interesting time for theaters. Even as the business remains extremely challenged, nearly all the traditional studios and even the streaming-first disruptors like Amazon and Apple have pivoted to a theaters-first model for many movies. I was at the premiere of Ben Affleck’s Air the other night, and it was amusing to see Jen Salke, head of Amazon Studios, extolling the wonders of the theatrical experience. As we discussed on The Town this Monday, Amazon and Apple now see theaters as a crucial first window for movies, not just to generate revenue but to market their services in a way that trickles down to streaming viewership numbers.
To that end, Netflix has quickly become the outlier here—or, as Sarandos would say, a differentiated product with a singular business model. Netflix rejects big theatrical plays outside of awards requirements or when a filmmaker has leverage to extract a concession. I’m told that Netflix film chief Scott Stuber has been briefed on the Academy’s plans. I haven’t talked about this with Stuber, but I’m betting he might actually support the move—he’s told talent he wants Netflix to do more theatrical experiments—but his boss, chief content officer Bela Bajaria, plus Sarandos, co-C.E.O. Greg Peters and especially co-founder Reed Hastings are allergic to theaters.
Anyway, it’s not guaranteed that the Kramer-backed plan passes. Netflix has spent the past decade royally sucking up to the Academy, with Sarandos serving as chair of the Academy Museum. A quick perusal of the Academy’s board of governors reveals extensive ties to Netflix. Academy president Janet Yang’s most recent credit was on the Netflix animated film Over the Moon. Vice president/Treasurer David Linde runs Participant Media, which sells tons of projects to Netflix. And everyone from Ava DuVernay (When They See Us) to Susanne Bier (Bird Box) to the various craftspeople either have or would like to have business there. A Netflix-led coalition could kill this.
But I’m told Kramer thinks he has the votes to enact at least some kind of expansion of the theatrical requirement. And a couple top studio executives I spoke with were aware of the discussion and think it’s going to happen. Some want to go even further and require a theatrical window, meaning a film could not be nominated for best picture unless it played exclusively in 15 to 20 markets for at least a week or two. That would be an even bigger eff you to Netflix, and probably a bridge too far for the board at this point. Some also want to exclude “four-walling” (meaning the distributor rents out the theater) or require a marketing spend. Both options are unlikely to win support.
The Academy is not a governing body for Hollywood. However, in the past few years it has used the power of the Oscars to advocate for diversity by requiring certain race and gender inclusion to be eligible for the awards. So, the thinking goes, why not apply that same rationale to saving the theatrical business, itself? So what if it annoys Netflix, which, despite its generous donation to the museum and its fancy movie theater, is now the only company that openly does not believe in theaters. Sarandos can hold his nose and spend a little more money putting his awards films in multiplexes. Or maybe Netflix is so focused on producing gourmet cheeseburgers these days, it will simply take a step back from the Oscar game.