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The Academy of Motion Picture Arts and Sciences voted to leave a key rule on eligibility unchanged. The rule allows any film to be considered for an Oscar, so long as they have a minimum seven-day theatrical run in a Los Angeles theatre.
Motion pictures can appear on a streaming service on or after the day of their theatrical run and still be eligible for an award.
"We support the theatrical experience as integral to the art of motion pictures, and this weighed heavily in our discussions," the academy's President John Bailey said in a statement late Tuesday.
"Our rules currently require theatrical exhibition, and also allow for a broad selection of films to be submitted for Oscars consideration. We plan to further study the profound changes occurring in our industry and continue discussions with our members about these issues."
The involvement of films from the likes of Netflix became a heated issue at this year's Oscars, after independent Spanish language film "Roma" bagged a nomination for "Best Picture."
While "Green Book" took the crown for that category, that didn't stop Hollywood legend Steven Spielberg from lashing out at Netflix's inclusion in the Oscars. The director reportedly wanted the academy to change the rules to shut Netflix out.
Reports of a U.S. Department of Justice letter warning the academy against excluding Netflix earlier this month added further fuel to the flames.
Netflix has become a source of fear for many in Hollywood, with the tech giant pumping more money than ever into original content. But it's facing increasing competition from established media titan Disney — as well as fellow tech firm Apple — in the form of rival online TV services of their own.