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Cannes rule redo bars Netflix films

By RACHEL DONADIO The New York Times

This article was published May 19, 2017 at 1:45 a.m.

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The Cannes film festival has taken on Netflix co-founder and Chief Executive Officer Reed Hastings by banning films that are not released on the big screen from competing for its most prestigious prize, the Palme d’Or.

CANNES, France -- France is a paradise for moviegoers, with thriving cinemas and state subsidies for new productions. Netflix is a global streaming giant founded on the concept that movie theaters are a thing of the past. So it was perhaps inevitable that the two worlds would collide over the Cannes Film Festival, which began here on Wednesday.

After including two Netflix titles -- Noah Baumbach's The Meyerowitz Stories and Bong Joon-ho's Okja -- among those vying for the Palme d'Or, the festival had second thoughts: It announced last week that it would change its rules starting next year and ban any films from competition that do not have French theatrical releases. The move was widely considered a slap in the face to Netflix. But in France, the new rule was seen as a badge of honor, protecting that country's cinema culture from streaming services.

At the heart of the Cannes-Netflix clash is what's known as the French cultural exception, a law that requires a percentage of all box office, DVD, video on demand, television and streaming revenues to be pooled to finance homegrown films and help finance foreign films. The law also mandates a 36-month delay between theatrical release and streaming date. Netflix has not wanted to participate in the French system, and that offended some in the film industry here.

"They are the perfect representation of American cultural imperialism," said Christophe Tardieu, director of the National Cinema Center, known as the CNC, a state entity that coordinates public financing of films. It also underwrites more than half the budget of the Cannes Film Festival and has seats on its board, as do French movie theater owners. "I deplore Netflix's attitude in this affair, which showed total intransigence and refusing to understand and accept how the French cultural exception works," Tardieu added.

Representatives of Netflix did not respond to requests for comment. After the festival's decision last week, Reed Hastings, a co-founder of Netflix, posted on Facebook, "The establishment closing ranks against us. See Okja on Netflix June 28th. Amazing film that theatre chains want to block us from entering into Cannes film festival competition."

Netflix won't reveal how many subscribers it has in France, beyond saying half of its 100 million subscribers are in the United States and the other half around the world, but international viewership is integral to its strategy. Both Okja, from the director of Snowpiercer, and The Meyerowitz Stories, a drama starring Adam Sandler and Ben Stiller, will have theatrical releases in the United States.

In contrast, another streaming company, Amazon Studios, says it aims for theatrical releases for its films. It has a film in competition at Cannes this year, Todd Haynes' Wonderstruck, which will be shown in theaters in France.

"Cannes misjudged," said Thomas Sotinel, a film critic and journalist at Le Monde. Festival programmers thought "they could get away with showing Netflix movies," he said. "But they found out Netflix wouldn't move, and at the same time they were reminded that on the board of Cannes sit people like the theater owners, who don't want to budge either. So they were caught between those two very immovable protagonists -- or rather, antagonists."

In France, the CNC said the Netflix films did not qualify for limited releases under an exemption for less mainstream work. But if Netflix had agreed to a wide release, it would have meant a 36-month wait before the movies could be streamed. That delay is part of France's "media chronology" in the cultural exception law, which sets a strict time frame in which a film moves from theaters to video-on-demand after four months, to cable television after 10 months, to free television after 22 months and finally to a streaming service.

Most of the entities in France's film industry, as well as viewers, agree the 36-month wait is far too long, but complex talks about altering the time frame broke down just days before Cannes announced its rule change.

Any new chronology must be approved by cinema owners, producers, cable and free television broadcasters, on-demand operators and associations representing writers, among others. Cable television operators like Canal Plus, which help finance productions aimed for theatrical releases, eventually want those films to be shown on their channels before they move to free channels or to a service that is not contributing to the financing system.

"The difficulty is that you have a system that's extremely regulated but that works," said Marc-Olivier Sebbag, the general delegate of the National Federation of French Cinemas.

Last year, cinema attendance rose in France, to 213 million tickets sold for box office revenues of 1.39 billion euros (almost $1.5 billion). (By comparison, the North American market remained flat at 1.32 billion tickets sold, while the box office rose slightly, to $11.4 billion.)

The Cannes rule change has also revealed fault lines within the French film world. While the president of the National Federation of French Cinemas last week said the festival had been "taken hostage" by Netflix, the Society of Dramatic Authors and Composers said in a statement that the Cannes flap was just a distraction from the "inertia" that had led to the breakdown of talks. And the French screenwriters guild on Tuesday issued a statement supporting Baumbach and Bong, saying the controversy had "the benefit of putting back on the table" the unresolved discussions.

"There are idiotic rules that don't let Netflix films come out for 36 months; I understand it's complicated," said Pascal Rogard, director general of the authors' society. "The real open question that will be given to the next culture minister is, 'Can we create a modernized media chronology so a film doesn't have to wait three years to go to Netflix?'"

Rogard and others said that they hoped the new government of President Emmanuel Macron would dedicate some political will to helping the parties shorten the time frame. Macron is expected to name a new culture minister this week.

Thierry Fremaux, the Cannes Film Festival director who oversees selecting films for competition, said he had no comment beyond the official statement last week.

That statement said that the festival was "aware of the anxiety aroused by the absence of the release in theaters of those films in France," adding that it had "asked Netflix in vain to accept that these two films could reach the audience of French movie theaters and not only its subscribers." As a result, it stated, "the festival regrets that no agreement has been reached."

On Monday, the festival announced that its opening and closing ceremonies would be broadcast to select French movie theaters -- at the same time they're broadcast live on Canal Plus pay television.

MovieStyle on 05/19/2017

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