Bad News for New Release Junkies?

According to an L.A. Times article cited at Hacking Netflix:

In an effort to push consumers toward buying more movies, some major film studios are considering a new policy that would block DVDs from being offered for rental until several weeks after going on sale.

Under the plan, new DVD releases would be available on a purchase-only basis for a few weeks, after which time companies such as Blockbuster Inc. and Netflix Inc. would be allowed to rent the DVDs to their customers. The move comes as the studios are grappling with sharply declining DVD revenue, which has long propped up the movie business...

DVD sales have been hurt by the recession, which has caused tapped-out consumers to opt for cheaper rentals. But Hollywood studios prefer that consumers buy DVDs because that generates significantly higher profits than rentals...

Studios considering the plan are betting that a sales-only window would push some consumers who currently rent DVDs into buying them, thus boosting profits...

So, are you willing to wait a few extra weeks to rent a DVD, or will you rush out and buy a copy when it first hits the streets? Will this increase profits for studios, or only generate ill will from consumers?

Tags: netflix, new release

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Permalink Reply by spiderpig on October 30, 2009 at 7:08am: I think Netflix would do okay because they offer such a wide variety of movies, but this is definitely bad news for Redbox.

Alas, it would not increase the amount of new DVDs I buy, but then again the only movies I buy these days are kids movies.; ▶ Reply to This

Permalink Reply by Spindaddydad on October 30, 2009 at 7:12am: Yes, I've heard about this. I don't think a few weeks will make that much difference, but now if they extended it by 2 months or more, that could. It's really a no lose proposition for the distributors. If it helps them sell even 100 more copies of DVDs then good for them.; ▶ Reply to This

Permalink Reply by thatboy on October 30, 2009 at 7:31am: Another question would be: How many people would blame Netflix rather than understanding this was something done by the studios?

I SEEN it in STORES!!! WHY AINT NETFLICKS GOT IT?

Considering the number of people who still don't understand why Netflix doesn't have every movie ever made available for streaming...; ▶ Reply to This

Permalink Reply by Spindaddydad on October 30, 2009 at 7:36am: Thatboy, you are a wise soothsayer. And, I expect your exact quote (grammar intact) will be uttered more than once here.; ▶ Reply to This

Permalink Reply by Dr. Anton Phibes on October 30, 2009 at 10:07am: Well I've never seen any ads from NF that claim to make people smarter.

I'm sure that if they stomp their feet for long enough they will perceive the sudden availability of the rental or IW stream as a capitulation by NF to their insistent demands when the studios do finally release it.

Vive L'revolution
Vive L'botomy; ▶ Reply to This

Permalink Reply by The Real Uncle Bob on October 31, 2009 at 2:10am: I SEEN it in STORES!!! WHY AINT NETFLICKS GOT IT?

is actually a VERY goood question.

Now, I am not a "new releases" type of guy...I've got a huge queue of older releases, and its not often that I move a film from the past year or so to the top. HOWEVER...
there is something called "the right of first sale," legally established in 1908 and upheld several times since, and this permits you, the owner of a purchased recording, to sell or exchange them, rent or lend that recording to others.

ANY video that goes on retail sale, Netflix is legally entitled to rent.

The studios have leverage, however, via "Instant Watch." They can use this to make Netflix do their bidding.

But rental customers that don't care much for IW offerings anyway can and will vote with their feet if a competing service offers the new releases as they are legally entitled to do, while Netflix foregos them.; ▶ Reply to This

Permalink Reply by Sock Puppet on October 30, 2009 at 8:02am: Yeah but will it actually be effective? I think it would be a waste of the studios time as "where there is a will, there is a way", and Reed hasting admitted as much with the following statement.

"Occasionally, a studio tries to find ways to restrict a rental firm’s ability to buy at retail. But retail is so big and diffused, this strategy has never worked."

I mean unless the studios get a new law passed, how exactly can they change the "rights" that businesses such as Netflix already have? We've seen how that whole "Exclusive at Blockbuster" thing worked out, (or failed to) Netflix just went out and bought the movies at retail.

So my thought is, so what if the studios tell distributors "You cannot sell newly released titles to rental businesses until two weeks after the retail release..." The companies would only have to buy retail. Or, if they were smart (which Blockbuster can already do, because they sell stuff in the B&M stores) is get/use their reseller permits to purchase movies "for sale" and then simply put them out for rental.

Again, they would not be breaking any laws, so what could the studios do about it?; ▶ Reply to This

Permalink Reply by Knaldskalle on October 30, 2009 at 9:31am: Again, they would not be breaking any laws, so what could the studios do about it?

Be a pain when it comes to acquiring streaming rights for Instant Watch... "You bought movies when we didn't allow you to, so now we're not going to allow you to stream any of our titles". Netflix is forced to play nice if they want to move towards streaming, since the studios have all the rights when it comes to that.; ▶ Reply to This

Permalink Reply by Pihk on October 30, 2009 at 9:36am: Yup. It's not in Netflix's interest to have an adversarial relationship with its content providers. Beyond the inherent one that comes about just from Netflix's very existence.

Unless they want to put all their chips on Roger Corman and Cory Feldman.; ▶ Reply to This

Permalink Reply by Knaldskalle on October 30, 2009 at 9:45am: Unless they want to put all their chips on Roger Corman and Cory Feldman.

It's on the Interwebz, it must be the future.; ▶ Reply to This

Permalink Reply by The Real Uncle Bob on October 31, 2009 at 2:15am: Hey, I met the man and his wife today, and he put in the effort to stroke my ego.; ▶ Reply to This

Permalink Reply by Sock Puppet on October 30, 2009 at 10:32am: True, but then the same thing works in reverse. The studios really don't want to screw with the number one contender for IW streaming.

So if the studios threatened NF future streaming rights, then NF "Could" simply stop buying any titles from that studio. DVD sales are poor enough (which is what caused this) so if NF stopped buying any copies, the sales would decline even further, undoing any gain the studio's got from placing the restriction on their distributors in the first place.

And I'd think seeing as NF didn't break any laws, that if the studios retaliated against NF by not contracting IW content (as they did in the past with no problems) that there "might" be grounds for a lawsuit (maybe a pretty antitrust one :); ▶ Reply to This