A best picture win for Netflix's "Roma" at the Oscars on Sunday would be a first for a streaming service -- and mark a huge change for the film industry as consumers increasingly gravitate toward content they can watch when and where they choose.
If the film, helmed by "Gravity" director Alfonso Cuarón, takes home the top prize, it could also spell more trouble for movie exhibitors that increasingly struggle to lure viewers off of their couches and into their movie theaters.
"Consumers embrace platforms that give them movies when they want, where they want, without having to spend $20 a ticket," said BTIG research analyst Richard Greenfield. "It's hard to imagine how viewing content in your living room, on your connected device, doesn't take an increasingly large share of movie consumption," he said.
Younger viewers in particular are accustomed to content on demand. "I don't think there is any 15-year-old consumer who understands why 'A Star is Born' is not available to stream right now on Netflix or HBO," Greenfield said.
Hollywood plays catch up
Some traditional studios recognize that if they don't evolve their distribution models, it will be tough to compete with Netflix, which launched its streaming service more than a decade ago, and has also now proved itself capable of producing top-notch films.
They are late to the game -- and slow to catch up. One hurdle is their dependence on movie theaters -- their first customers -- to promote their films. Exhibitors try to maintain profits by prohibiting studios from simultaneously releasing content digitally or even shortening the window between a theatrical release date and a digital one.
"The exhibitors function essentially as a cartel," Greenfield said. "They collude and basically tell movie studios that if you try to shift the windows, we will bury your movie. We won't advertise it, we'll stick it in smaller theaters, so it's the tacit collusion of the major exhibitors that prevents windowing change."
Tech companies, including Netflix, Amazon, and Apple, have content windows that are more fluid, and cater to audiences that want the ability to watch at home -- or on the big screen. It's paid off big time for their stocks in recent years as audiences and revenue grow at double-digit rates.
At the same time, major studios including Disney, are planning to launch their own streaming services. Disney has yanked its content from Netflix and will release a new platform, Disney Plus, to compete with streamers.
"You are going to start to see simultaneous releases where a studio like Disney may release a movie in theaters at the same time you may be able to watch it on a pay per view basis at home," said Tigress Financial Partners analyst Ivan Feinseth.
A commercial win for Netflix
While an Oscar win for Roma would be an artistic victory, it also would be a commercial win, drawing new subscribers to the platform and solidifying its place as a top player in the production of content.
"For Netflix, a win by Roma would be huge. Any content creator that is able to win an Oscar -- it is a validation of the quality of their creation and really boosts demand," said digital entertainment analyst Brett Sappington.
"There will be people who will never have heard of Roma who will decide that they are happy to pay for a subscription just to see that movie," Sappington said. "Every win at the Oscars, every win at the Emmys, it's more validation that they are good."
It would also help Netflix continue to woo top talent -- something it has already been successful at. Acclaimed director Martin Scorsese's "The Irishman," slated for an October release, is backed by Netflix.
"It's getting harder and harder for studios to compete with entities like Netflix and Amazon who can throw all sorts of money at creative types and offer them final cut and things studios have a hard time doing," said box office analyst Jeff Bock.
Will theaters survive?
Movie theater owners have stood firm in retaining a film's initial distribution window, shunning Netflix and Amazon.
"I think it's pretty obvious theaters want to toe the line. Once you start playing with the tiered structure of release, you are playing with dynamite," Bock said. "Theaters say there has to be this window, if not we will keep losing more and more customers to streaming who will say why would they do to the theater if in two weeks they can see it on Amazon of Netflix or Disney Plus."
Studios, meanwhile, are increasingly trying to reduce the time between a film's theatrical release and it becoming available digitally. It may even pay for theater chains to reconsider their opposition and give audiences more flexibility.
" [An Oscar win by Roma] would essentially tell the theater owners that they are missing out if they don't accept Netflix movies into their theaters," Sappington said. "They are turning down potential revenue by doing that because people are going to go to Netflix to see it, and some people may want to see it in theater experience."
Still, industry professionals insist that nothing can replace the one-of-a-kind theater experience, and that box office sales remain the main metric of a film's success.
"A lot of the way most movies are measured in terms of their financial success is at the box office. Until the box office ceases to be the main measure for success, movie theaters are going to be important for a long time," Sappington said.