Cannes' Netflix Problem Gets Bigger After Oscar Wins for 'Roma'

Courtesy of Netflix

The world's number one film festival must make a deal with the streaming service or risk losing out on such future award contenders as Martin Scorsese's 'The Irishman' and 'The Laundromat' from Steven Soderbergh.

Cannes is caught between Roma and a hard place.

After Alfonso Cuaron's Mexican drama picked up three Oscars this past weekend, pressure has ratcheted up on the Cannes Film Festival, which last year rejected the film for its competition on the grounds that it was backed by Netflix. The Venice Film Festival, which has shown no qualms in screening Netflix movies, jumped on Roma. And the rest is history: Roma won the Golden Lion, setting the stage for its awards season run.

As Cannes director Thierry Fremaux prepares for this year's festival, which runs May 14-25, the question of what to do about Netflix looms large. Cannes told The Hollywood Reporter that “discussions are still ongoing” with the streaming giant to find a solution to what seems an intractable problem: How to let Netflix in without enraging European theater owners furious over the streaming giant's online-first policy, bypassing a traditional theatrical release with its movies?

Last year the battle focused on Cuaron's Roma. This year it's Martin Scorsese's Netflix-backed mob epic The Irishman. Scorsese won the Palme d'Or in Cannes for Taxi Driver in 1976 and his latest — about the hitman who claimed he killed union boss Jimmy Hoffa — seems a perfect fit for the Cote d'Azur fest. The cast — which includes Scorsese stalwarts Robert De Niro, Joe Pesci and Harvey Keitel, as well as Al Pacino and Anna Paquin — would also up the star wattage on the Cannes red carpet.

Fremaux has reportedly suggested a compromise with Netflix: he will give The Irishman and other upcoming Netflix titles — Steven Soderbergh's The Laundromat starring Meryl Streep and Gary Oldman, for example — a shot at Cannes competition on the condition that, should one of the films win the Palme d'Or, Netflix commits to releasing the movie theatrically, at least in France.

While the festival has so far refused to comment, the compromise idea has some support among the Netflix-bashers.

Carlo Bernaschi, president of Italy's National Association of Multiplex Exhibitors, who condemned Venice for screening Roma in competition, called the “release if you win” idea “a good starting point ... because the respect for theatrical windows is essential.” But, he said that all the big European festivals, together with Europe's producers, distributors and exhibitors, need to agree on a common policy on how to deal with Netflix. “We are stronger together, and this would prevent one festival from simply picking up what another festival rejects,” Bernaschi said.

Outgoing Berlin festival director Dieter Kosslick made the same point earlier this year, after fielding attacks for picking Isabel Coixet's lesbian period drama Elisa & Marcela, a Netflix production, for Berlin competition. Kosslick suggested the big three Euro fests — Cannes, Venice and Berlin — establish common rules regarding whether they show Netflix films and under what conditions (in or out of competition, with a guaranteed theatrical release or not).

The festivals might not be all that far apart when it comes to their attitude toward Netflix. Fremaux bowed to pressure from French distributors and banned the streamer's titles from competition last year, but he was initially happy to program Netflix movies in Cannes. In 2017, both Bong Joon-ho’s Okja and Noah Baumbach’s The Meyerowitz Stories screened in competition in Cannes, although neither won any awards. Fremaux also played Roma at his own festival in Lyon, suggesting the Cannes boss has no philosophical opposition to the streaming giant.

The real battle, however, is not between Netflix and Cannes. It's between Netflix's business model — demanding day-and-date or online-only releases of its movies worldwide — and that of European exhibitors who want Netflix to play by the rules of the industry, which require release windows starting with an exclusive, and significant, theatrical bow.

“If Netflix says 'OK, our Cannes films can be released theatrically in France,' I'd say OK. But if not, I think they should remain out of competition,” says Eric Lagesse, co-president of France's association of independent theatrical distributors. “As a French distributor, I'm not prepared to have a Netflix movie in competition in Cannes (because) it would mean that the Palme d'Or would only help Netflix gain more subscribers.”

Lagesse worries that Netflix's model of bypassing theaters will undermine the independent industry, especially as the streaming giant, so far, has focused most of its money on backing established directors, neglecting young or first-time filmmakers.

“We release 15 movies a year, and almost six or seven are first-time directors. We were the first to release Alejandro G. Inarritu's debut Amores Perros, and now he is the president of the (Cannes 2019) jury,” Lagesse says. “I don't believe Netflix is going to do what we do, prospect young directors and take risks on first films. They will get tired of that.”

Netflix has experimented with limited theatrical releases — most significantly with Roma, which had a small run in theaters in several countries, most notably Mexico. But that hasn't satisfied the European industry.

If Netflix did agree to some form of theatrical release for its Cannes titles, France's famously feisty film unions are expected to push for the true wide release typical of Palme d'Or winners — meaning screening a film in at least 3,500 screens across the country, not a platform bow on a handful of screens in a couple of big cities. It's unclear whether Netflix would be willing to make that move — which would essentially turn them into fully-fledged theatrical distributors or require them to enter into long-term deals with local players.

French law — which requires a huge 36-month window between the theatrical release of a movie and its release online — also presents a near-insurmountable obstacle to a Cannes-Netflix deal. Few expect the streamer to accept conditions requiring it to wait three years before giving its subscribers access to its own films. Netflix could help its case — and win some brownie points from the French industry — if it agreed to sign a new agreement committing the company to help fund French films. Local broadcasters, including CanalPlus, signed up and have been granted a much smaller theater-to-SVOD window, between 17 and 15 months, depending on a film's budget.

Despite the seeming intransigence of many in the European industry, exhibitors who spoke to The Hollywood Reporter were broadly supportive of changes to windowing and distribution rules. Michele Halberstadt of French indie producer/distributor ARP Selection suggested adjusting a film's theatrical window depending on the box office. “If it's doing nothing, let it play somewhere else (on SVOD). If it's really working and the word of mouth is great and it can play for three months, then it should stay in theaters,” she says, adding that Netflix is "not the enemy,” they just need to work with, not against, the industry.

Tim Richards, CEO of the Vue international theater chain echoes that sentiment, noting that by ignoring the theatrical business, Netflix is leaving money on the table.  “Netflix should not underestimate the value and impact of a full theatrical release for the content it owns,” he tells THR. “We are hopeful they will be open to discussing how to reach a far broader and more engaged audience with exhibitors and consider carefully the impact the big-screen experience and environment has on creating and profiling cultural blockbusters.”

With three Oscars for Roma in its pocket, Netflix might seem to be in the stronger position going into negotiations with Cannes. But the next big battle over the future of film distribution will take place on the Croisette. And the war — as one exhibitor noted —is far from over.

Ariston Anderson in Rome and Alex Ritman in London contributed to this report.