NEW YORK  - Look who’s crashing this year’s cozy Oscars party: the U.S. Department of Justice. It has warned that a proposed change to the rules governing Hollywood’s most prestigious awards may be illegal. That’s bad news for glitterati like director Steven Spielberg, who has pushed for the changes. And it’s a boost for Netflix, the streaming service that has put Tinseltown’s old guard on the defensive.

The rules around the Oscars are already, to an outside observer, weird. To be considered for the golden statue, a movie must run for paid admission in a theater in Los Angeles County for at least seven consecutive days. The Academy of Motion Picture Arts and Sciences, of which Spielberg is a board member, is mulling lengthening the time required. U.S. antitrust chief Makan Delrahim has duly fired off a letter to the Academy saying that might be illegal.

It’s odd the Department of Justice cares. Yes, tougher cinematic requirements would clearly be a swipe at companies like Netflix, which can create award-worthy blockbusters without theaters. But how the Academy, a private organization, doles out prizes seems on the face of it a small matter – even if winning an Oscar can extend the life of a movie and catapult an actor or director to new heights.

As for why Spielberg and his cohort care, that’s clearer. Netflix has been producing its own TV series and films, and the buzz around an Oscar would only help win subscribers. Media companies like Walt Disney are withholding their own content from Reed Hastings’ $160 billion firm, and preparing to launch their own streaming services. Netflix checked the boxes for its movie “Roma” by showing the film in a few theaters. It was nominated for best picture, which can’t have thrilled Hollywood’s elite.

Even so, trying to turn the Oscars into a no-Netflix club won’t hold back the tide of shifting consumer habits. More people watch movies at home than in theaters. The global home entertainment market represented 57 percent of the overall $97 billion industry last year, according to the Motion Picture Association of America – while the worldwide number of subscriptions to online video services like Netflix and Amazon AMZN.O surpassed cable subscriptions for the first time. Hollywood is getting a new ending whether it likes or not.

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CONTEXT NEWS

- A rule that only films shown in theaters for a specific length of time would be eligible for an Oscar could be anticompetitive, the U.S. Department of Justice warned in a letter to the Academy of Motion Picture Arts and Sciences.

- The Academy, which organizes the Oscars, is weighing rule changes that would have the effect of making it harder for streaming services like Netflix to compete, unless they secure a cinematic release for their movies for a certain length of time.

- The head of the DOJ antitrust division Makan Delrahim wrote that agreements to exclude new competitors can violate antitrust laws if they “impede competition by goods or services that consumers purchase and enjoy but which threaten the profits of incumbent firms.” Variety reported the exchange on April 2.

- A spokesperson for the Academy confirmed to Reuters that it had received the letter and any rule changes would be considered at an April 23 meeting.

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(The author is a Reuters Breakingviews columnist. The opinions expressed are her own.)

(Editing by John Foley and Amanda Gomez) ((jennifer.saba@thomsonreuters.com; Reuters Messaging: jennifer.saba.thomsonreuters.com@reuters.net))