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Excerpted from variety:

Asked about Netflix’s pulling out of the Cannes Film Festival this year — over its rule prohibiting the entry of films that don’t have theatrical distribution in France — Sarandos said the issue has to do with the French law that embargoes the distribution of movies on streaming services until three years after theatrical premiere. “So we don’t put our movies in theaters in France,” he said. “We are 100% committed to collapsing windows outside of France, because that’s what consumers want.”

What does "collapsing windows" mean here?

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It's an industry-specific "jargon" usage, and I'm not an industry insider so I might not exactly have this one right (but then again, nor would most other native speakers).

My guess is the metaphorical "window" refers to the period between a film's theatrical premiere and its appearance on streaming services, dvd's, etc. Sarandos presumably thinks that period is a window of opportunity for cinema chains, but I'm guessing that as a company, Netflix sees it as unproductive / unprofitable "dead time". So Netflix would like to do whatever they can to reduce or eliminate that dead time (metaphorically, to collapse it, bring it down, destroy it).

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    (My other guess is that millions of French households are or will be making use of VPN's to access streaming services and get round that somewhat ridiculous restriction preventing them from legally watching movies less than three years old in the comfort of their own homes. :) – FumbleFingers May 15 '18 at 15:22
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The phrase "collapsing windows" is related to an established business model of movie distribution. As can be seen in this Wikipedia page, according to this model, movies are made available initially only to theatres; some time later to paid video-on-demand; and so on. Each release is a window.

These windows are shrinking over time. Netflix apparently wants to collapse (eliminate) the windows that are not its business, like theatres. I assume Netflix would fight to extend the window in which it makes money - it will not release their movies for free streaming too early...

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