DOJ Lawyers Now Want to Be Involved in Oscar Nominations

The Department of Justice is threatening antitrust action if the Academy keeps out streaming services like Netflix.

Do you remember this year's Academy Awards? What the controversies were? Which movie won Best Picture? There was no host, because of Twitter. A new award for popular filmmaking was introduced; no one understood it, and the award was eventually cancelled. Oh, and this year's Best Picture award went to Green Book, a thoroughly conventional racial reconciliation movie few people truly loved, some people hated, and which probably won because of ranked choice voting, which tends to elevate lower-ranked consensus picks when the top choice is divisive. It's a system that, even after some revisions, is designed to pick boring, unmemorable winners that pander to the Academy's predictable tastes.

Which, along with the broadcast's low ratings—up slightly from last year, but still the second lowest in history—probably explains why, less than two months after the ceremony, this year's big winner and the controversies around it have already largely slipped from the cultural conversation. Over the last several years, fewer people have watched the Academy Awards, presumably because, even as the movie business itself sets global box office records, fewer people care. It's still widely watched, but it's far from the mass event it was in the era of network-television dominance. People have other options, from video games to cable to social media, and they are exercising them.

This decline in cultural relevance has coincided with some prominent figures in Hollywood, most notably Steven Spielberg, arguing that the Academy should re-establish itself as the premiere place for celebrating the theatrical experience by shutting out streaming-first competitors like Netflix unless they follow a more traditional theatrical release schedule. The idea, apparently, is that the way for the Oscars to appeal to the younger, more connected and tech-savvy viewers who have been tuning out is to…prohibit movies distributed online.

Naturally, the federal government has decided that now, in the Oscars' dotage, is the time to intervene in the process. Yesterday, the Department of Justice sent a letter to the academy warning that shutting out streamers could be taken as illegal, anti-competitive behavior by what amounts to a studio cartel: "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 pro-competitive justification, such conduct may raise antitrust concerns," the assistant attorney general for the DOJ's antitrust division wrote.

I am a devotee of the old-school theatrical experience. I prefer film to digital projection, and the vast darkness of a theater to the more intimate experience of watching a movie at home. I spent my Saturday evening last weekend watching a theatrical presentation of Blade Runner, a movie I have seen dozens and dozens of times at home, just because it's such a radically different experience on the big screen. But the DOJ's concerns are absurd—a demonstration of the small and short-sighted nature of so much federal antitrust enforcement.

One takeaway from this letter is that although antitrust is often lauded by supporters as a heroic defense against the overwhelming power of big business, in practice, it is remarkably petty. As with Elizabeth Warren's crusade against Amazon's inexpensive, reliably accessible HDMI cables, the DOJ's position here is that the federal government should be able to exercise oversight power regarding which films do and do not qualify for the Oscars. A core function of government this is decidedly not.

Another takeaway is that, while antitrust is often portrayed as a way to help little guys, it frequently amounts to federal meddling in disputes between large, powerful players. Netflix is a huge, successful company that is expected to spend a whopping $15 billion on content this year alone. Some of that will be filler. Some of it will be interesting. Some of it—like last year's Roma, which was nominated for Best Picture—might even be truly, staggeringly great. Shutting out Netflix and its streaming contemporaries would mean shutting out movies like Roma. It would be a decision to eliminate great, widely distributed films from contention. Excellent, widely distributed films that capture the public imagination are what the Oscars need more of. In some ways, then, the Oscars need Netflix more than Netflix needs the Oscars.

Finally, what the letter suggests is how antitrust enforcement almost always stems from a fixed mindset, in which the marketplace will always exist as it does today, requiring government to come in and set the rules. In the 1990s, antitrust bureaucrats wrongly assumed that Microsoft would always reign supreme over desktop computing, and desktop computing would always be the primary way that people interacted with the internet, thus making Microsoft's integration between Windows and Internet Explorer an anti-competitive act. Internet Explorer eventually faded from use because new business models, and new technologies—especially mobile—came along.

Similarly, the DOJ's letter assumes that the Oscars will always be the most prominent cultural hub for filmmakers, and that shutting out Netflix would thus permanently hurt the company's chances. But the falling ratings for the ceremony provide evidence that the Academy's power is waning, and that the Oscars are ceding their spot at the center of the filmmaking universe. This is especially true for producers and distributors, like Netflix, working outside the old system. The Oscars, like Internet Explorer, won't necessarily be dominant forever—especially if they keep rewarding films like Green Book.

If Netflix and the studios want to fight this out, the federal government should let them. There is no reason to have DOJ lawyers involved in the Oscar nomination process, which is inscrutable, bureaucratic, and political enough on its own.