In return for more favorable pricing and more catalog movies available for streaming, Netflix agreed not to rent Warner Bros. DVDs for the first 28 days of their release. Warner thinks that a month’s delay will mean more people buying the discs instead of watching for one low monthly fee. I think that someone who really wants to see the movie will have done so in the theater. Or downloaded it, whichever. Otherwise, if you’ve waiting three-six months, what’s one more?
Netflix stock went up on this news, while Time Warner declined slightly. Netflix says that only 30% of their rentals are new releases, which makes sense. Lots of people appreciate the “long tail” of Netflix, getting the chance to watch films they can’t easily find locally. That article also shows why Warner cares so much: “About 75 percent of DVD sales are made during the first four weeks that a title is available.” That also makes sense, since there’s always something newer and hotter coming down the pike to distract the customer.
This is likely the first studio to attempt to force Netflix into this kind of deal, but not the last. How soon until mailing plastic discs doesn’t matter, and people subscribe to Netflix just for their single-rate movie streaming functions? (While they fill their rental queue with TV season discs.) This is an attempt to force customers back into older models instead of acknowledging the current reality and working with consumer behavior as it is, instead of how you wish it still was. If you must have Warner movies at release date, you can still access them through video-on-demand or rent from brick-and-mortar locations like Blockbuster. At least for now.