Cannes just can’t seem to win with Netflix. The first-ever film from the streaming service to premiere in Competition here, Bong Joon-Ho’s Okja, was marred by technical difficulties at its press screening this morning, prompting the fest to hastily issue a mea culpa. What’s more, reports from inside the Palais are that the Netflix logo elicited boos from the French contingent.

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That jibes with what has been the hot-button issue up and down the Croisette this week. The one to watch in Cannes this year is not a filmmaker or star, “It’s Netflix,” a foreign sales agent and producer recently said. The already disruptive streaming service has two films in competition here, a bold selection made by Cannes Film Festival chief Thierry Frémaux, which was met by an outcry from the local industry when they were announced mid-April. That in turn led to an about-face from the fest which decreed that from 2018 all movies vying for a Competition slot must commit to a French theatrical release.

The French remain divided on Netflix, largely owing to its model which is first and foremost to provide product for its global streaming audience. Here, an arcane windows system dictates that movies must wait 36 months after their theatrical releases before hitting SVOD. If Netflix were to partner with local distributors on theatrical, that would delay a film moving to the platform by three years. Why would they want to wait?

France, most agree, is going to have to jump on the bandwagon if it wants to move into the new world order. Netflix is deep-pocketed and here to stay. Despite the ongoing outcry, Cannes is a big step in legitimizing its feature film program.

Frémaux’s choice to include the films this year has certainly helped keep the festival relevant on its 70th birthday. And the fest has previously broken with tradition. Frémaux’s first ever program in 2001 saw him include Shrek in Competition, shocking the fervently art house establishment. The precedent held and in the past 16 years such animated films as Up, Inside Out and Kung Fu Panda have run in Official Selection.

Some think the rules the festival installed in response to the industry will be amended in time. One buyer we spoke with says, “It’s a bit ridiculous if you have to guarantee a release for a small film. Often you have a film in competition that you don’t sell. If Netflix comes along, you’ll sell it.”

It’s simply undeniable today that Netflix, Amazon and others are part of the film industry. What needs to adapt in France is the windowing system. Newly elected President Emmanuel Macron has said he will examine the issue, perhaps even opening up TV advertising to films in a market that is fiercely protective of independents.

The division among the French establishment was highlighted this week by Christophe Tardieu, director of French film authority the CNC, which underwrites more than half the budget of the Cannes festival and has seats on its board (as do French movie theater owners). He told the New York Times that Netflix is “the perfect representation of American cultural imperialism.” Netflix originally sought a compromise after the industry’s hackles were raised, saying it would potentially release both Okja and Noah Baumbach’s The Meyerowitz Stories in theaters, but no agreement was reached. “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 said.

Okja, the Korean master’s film, is highly anticipated, but it will be interesting to see which way Pedro Almodovar’s jury leans when it comes to prizes. The Spanish Cannes veteran came out of the gate this week saying he couldn’t “conceive a film wins the Palme d’Or or any other prize that we can’t see on a big screen in cinemas.” He said he believes streaming platforms are “enriching and positive” but “mustn’t alter the habits of audiences.” When viewing a film for the first time, he said, the screen “shouldn’t be smaller than the size of the chair you’re sitting in when you watch it.”

The film’s stars and director addressed the issue in their press conference today. Tilda Swinton said, “I think it’s an enormous and really interesting conversation that’s just beginning. But what I really think is that there is room for everyone.”

Robin Wright, who stars in Netflix’s House Of Cards also chimed in this week saying, “The movie theater will forever be the first choice of course. I think it’s rude for people to watch movies on their phones — it’s rude to the filmmakers.”

Will Smith, who is on Almodovar’s jury and is starring in Netflix’s $90M Bright, took another tack. He said of his kids, “They go to the movies twice a week and they watch Netflix… In my house, Netflix has absolutely no effect on moviegoing.”

Wild Bunch co-founder Vincent Maraval thinks the solution that Cannes found in response to the industry this year was the best it could be, “before finding the right one.” Folks must understand, he says, that the upset “has nothing to do with any ideal of cinema. It is commercial lobbying to freeze the monopolies of major French exhibitors who themselves do not respect cinema by broadcasting sports or concerts, by deprogramming films and who mostly do not program the Cannes films.”

But FilmsDistribution co-founder Nicolas Brigaud-Robert likens the debate over Netflix versus movie theaters to the difference between a hand-written letter and an email. “It’s about distinguishing the function of the eventual symbolic value: the solemnity of a letter versus the banality of an email.”

“The debate over the status of Netflix films is complicated by the fact that corporatist arguments strive to confuse the functional and symbolic dimensions of the consumption of ‘films’,” he says. “That the Netflix ‘film’ works like a movie for the viewer is undeniable. It’s also true that it doesn’t have the symbolic value. Is that gravely serious or not? Important or secondary? That’s what needs to be debated.”

Some in the industry have been “blurring” these two issues, says Brigaud-Robert. “People know very well that it’s not the same, but the thirst for entertainment is quenched” when they watch a film on Netflix.

Another real issue in this country is that the government decrees a portion of all box office, home entertainment, VOD, TV and streaming revenues goes back into local and European film production. Netflix is under no such obligation, but that’s something the industry would like to see change. “Public powers are so involved in making films in France, so the question for them is what’s most important. To intervene to support the function, or the symbolic value?,” posits Brigaud-Robert.

The trade-off, many believe, will be that at some point these players will have to exchange the flexibility of the chronology against investment in local production. That would be a possible compromise.

So what happens next? Other festivals have and are expected to continue to program Netflix titles, but as of next year, Cannes will be a no-go unless the platform commits to a theatrical release.

Macron is not expected to make the windows issue a priority. But the new government has been implored to act. France’s writers-directors-producers organization l’ARP recently said it “deeply regrets” the controversy surrounding Cannes’ inclusion of the Netflix titles. Above all, the group said, it “highlights our collective inability to modernize our system of funding and dissemination of works. After years of discussions and meetings, negotiations to achieve a change in the media chronology are now blocked. More than ever, our regulation appears outdated… After several years of unsuccessful consultations, we will ask the next government to take up this political dossier quickly.” France on Wednesday named Françoise Nyssen, a publisher, as its new Culture Minister.

Maraval thinks the chronology must “above all be restored to the rights holders. But in order for that to happen, that means annoying the powerful for the benefit of the small and therefore having political courage. Alas, as often happens, reality hasn’t waited and piracy has made hay out of this anachronism.”

The 36-month window was originally implemented to “protect Canal Plus,” notes one exec. The pay-TV giant essentially has a deal with the government that sees it get movies after just 10 months, in exchange for about 12% of its annual revenues. But Canal is buying fewer films these days. It’s not known if Netflix was proposed a similar deal, but some think that it wouldn’t seek such an agreement and have to give up that big a portion of its earnings to support French film production. The company recently closed its Paris office, but in its offer of compromise after the initial uproar surrounding Cannes, it did say it wants “to continue to contribute to the development and financing of films.” (Netflix did not respond to requests for comment on this article.)

Amazon

Amazon last year did not face the same brouhaha when five of its movies were included in Official Selection. Partly that’s down to the company’s model of partnering on theatrical. Partly it’s because its Prime service was not yet operational in France. Currently, Amazon is selling to French distributors and is subject to the same chronology as everyone else.

For the French, the situation has also stirred a philosophical debate about the meaning of cinema in a country where the art form was born. One observer recently told Deadline that Cannes has become “a battleground to establish a new definition of cinema.” Brigaud-Robert recently told Deadline there is “a bigger philosophical question which all of us in the industry are asking ourselves: What is cinema?” Regardless of anyone’s position as they defend their own interests, he says, “there is a really interesting debate. And, the fact that it is happening in the biggest art house film festival in the world means we can’t avoid it anymore.”

Says Maraval, “For a laugh, I’d love that Venice, San Sebastian, Toronto, Sundance or Berlin insist that that French films must have a theatrical release in their country in order to be selected.”