This week Netflix will release Beasts of No Nation with the intent of garnering a Best Picture nomination. Paramount is now streaming free movies on YouTube.Those headlines alone are enough to bring into question the future of digital distribution. Netflix is breaking the traditional mold of film distribution by streaming their film the day it premieres in theaters. Paramount aims to get rid of the shopping store bargain bin by offering their films to the masses for free. Let’s take a look at these significant changes to internet distribution.Netflix Aims for a Best Picture Academy AwardThe Netflix original film Beasts of No Nation will be released on October 16th. The film has received tons of praise, which brings its Academy Award eligibility into question.Traditionally, films are first released in theaters. Then, 90 days later, they are available for purchase online, streamed, or in disc format. With Beasts of No Nation, Netflix is bypassing the 90 day window and streaming the film immediately.In doing so, the film has been boycotted by the four largest cinema chains; AMC, Regal, Cinemark, and Carmike. (If you’re curious on how behind the times cinema chains are, just look at Carmike’s homepage.)Image: Abraham Attah and director Cary Joji Fukunaga at TIFF via Maher FilmsThe Academy Awards rulebook notes that qualifying films must open in Los Angeles County and run for at least one week. Any “nontheatrical” releases are allowed simultaneously, which means that streaming the film at the same time will follow the guidelines. The film is scheduled to screen in Landmark Theaters and smaller chains like the Alamo Drafthouse. (Landmark has three theaters in LA County.)This is not the first time Netflix has tried to win an Oscar. Their documentaries Virunga and The Square were both nominated for Best Documentary Feature. However, this time the company has their eyes set on one of the largest categories. A nomination alone will have a major impact on film distribution. Director Cary Joji Fukunaga had some hesitations with selling the film to Netflix, as he wanted to ensure the film saw a theatrical release. Netflix proved to have no issues with his demands, and encouraged a theatrical release to allow them to achieve an Oscar nomination. In this video, Fukunaga discusses the early meetings with Netflix. Amazon Follows Traditional DistributionAmazon Studios is also working on original films, currently finishing post-production on Spike Lee‘s Chi-Raq. Chi-Raq is scheduled for a traditional December theatrical release. Amazon intends to work with the major theater chains before eventually releasing the film themselves on Amazon Instant Video.Amazon believes in this model so much, they are already planning to release 12 films a year. In comparison, Netflix only has 11 films slated over the next two years. However, Netflix appears to be winning over critics and writers. With the instant release, Netflix films seem to have much more exclusivity – which should in turn drive up new membership.With Amazon’s delay to stream, there is no real incentive to purchase a Prime membership strictly for Instant Video. If their films turn out to be a major success, many viewers will first see the film in theaters as opposed to waiting 90 days.Paramount Opens the VaultParamount Pictures has created a new YouTube channel, The Paramount Vault. The Vault doesn’t only offer popular film clips, but a huge selection of films from their catalog.While the videos are not their high-profile films, they aren’t their worst films either. Many of the videos have sat in bargain bins in retail and grocery stores. By putting them on YouTube, the films can at least earn ad revenue for Paramount.The channel gives fans the opportunity to discover and watch titles that may not be readily available anywhere else and because of the vast richness of our library we can regularly change and update the selections. – Amy Reinhard, President of Paramount’s Worldwide Television & Home Media Acquisitions The Future of Digital DistributionFor years, people have asked it online streaming and distribution would break the theater model. If Netflix manages to earn a nomination in a major category, then it has already happened. You can see it now, as theater chains realize that they must provide an elevated experience. Popcorn and sticky floors aren’t going to cut it anymore. When the home audience has amazing television sets, the theaters must update their equipment too. This not only includes projectors and screens, but food, service, and seating as well. Many chains now offer luxurious recliners, just to literally get butts in the seats.Perhaps the biggest effect on the industry will be the ratings system. The MPAA ratings system has been incredibly controversial over the years, even being subject to a documentary. By releasing their own films on their own platform, Netflix could just issue their films as Not Rated.Finally, with Paramount releasing films for free, they will now be earning revenue off of films once considered dead. The Paramount Vault could lead to other studios releasing their old content online. Something that was always expected with digital distribution. It seems the power of filmmaking is finally reverting back to the studios, especially those who embrace their consumers.What are your thoughts on the future of digital distribution? Let us know in the comments below.