Movie Business Decides to Protect Profits by Inconveniencing Customers Further

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January 8, 2012

At the beginning of 2010, Warner began imposing a DVD rental delay, in which they wouldn’t provide discs to outlets like Netflix and Redbox until 28 days after they went on sale. Now, Warner is planning to double the wait time to 56 days (almost two months).

It’s unclear to me whether they want to extend the delay because 1) it’s working, in terms of increasing DVD sales, so they’re being greedy and wanting to boost sales even further, or 2) it’s not working, and they think a longer delay will make it work. I would guess the latter, just because I haven’t seen anyone agree with the studios that the delay matters to them or has changed their behavior. The linked article calls DVD sales “disappointing”, but I don’t know if that really means disappointing, or if it just means that the studios had expectations that were too high. (The problem in most media these days is that the producers value their content much more than the consumers do.) This analysis of the news suggests that Redbox and Blockbuster don’t intend to wait and will instead buy discs elsewhere, perhaps paying more but giving customers a better experience than the one Warner wants to impose.

Personally, I buy DVDs in two ways. If it’s something I really want to see, with good extras, I’ll buy on release day, when the best deals are in effect. (These days, I won’t even consider it without at least a 40% discount off list price.) More likely, though, I just make a note and then pick the disc up used when I can get it for $5 (DVD) or $10 (Blu-ray) or less. (Or during big sales periods, such as taking advantage of some of Amazon’s deals just before Christmas.) That’s how much I’m willing to pay, not $30-$50, and by waiting, I’ll get what I want at the price I think is fair, and it costs me less to see the movie at home than it would for two tickets at the theater.

Plus now, I’ve got so many stocked up that I don’t even rent any more. To see a movie I don’t want to own, I just wait for a free premium channel weekend and load up the TiVo. I’m sure all this makes me a bad customer, but I was already in that category by refusing to be manipulated by the studios’ attempts to play with release dates.

In related news, movie ticket sales are down, so ticket prices are going up. That doesn’t make sense to anyone but the companies who feel they deserve a certain level of profit. They’ll do whatever they can to get it, even if it means driving away customers and putting the business into an ever-declining death spiral. Meanwhile, normal people know that if customers aren’t buying, you either make better products or drop prices or both.

I haven’t gone out to a movie since November. I’d like to, but the film I most want to see right now isn’t playing in my city, and those that are playing don’t seem like I would enjoy them enough to justify taking an evening away from everything else I want to do. (Especially during the past month, when I spent time with friends and family instead.)

14 Responses

Suzene writes:

January 8, 2012 at 2:09 PM

I can think of exactly two movies I intend to see in 2012: The Hobbit (because of eeeeeeeee! <3) and Avengers (because that's the trade-off for my roommate coming to see The Hobbit with me). The movie-going experience just isn't worth the expense or time; it's getting to the point where, even without the discount, DVD is still a cheaper alternative than hitting the theater.

Dwight Williams writes:

January 8, 2012 at 2:38 PM

Corporate sense of entitlement…nothing like it, is there?

Dwight Williams writes:

January 8, 2012 at 2:39 PM

Have they considered the possibility that making 3D-formatted films unavoidable at the cinema houses forces customers to wait for the DVD who’d rather see it at the theatres but for that 3D issue?

Ralf Haring writes:

January 8, 2012 at 3:24 PM

The local multiplex has bargain Tuesdays where every movie is $7 all day long. Tuesdays are almost as packed as Fridays and Saturdays. I don’t think this is coincidence.

Johanna writes:

January 8, 2012 at 4:01 PM

That $7 is now considered a bargain price surprises me, but I guess that is a good discount off of $10, which is what tickets are around here.

scott (the other one) writes:

January 8, 2012 at 4:14 PM

A high school student came by yesterday, selling a book of movie coupons–for $12, I could get a dozen coupons allowing me to buy tickets for just $7 each, rather than the usual $12. It didn’t apply to 3-D, nor could they be used during the first two weeks of the film’s run. Since The Hobbit’s the only film I know for sure we’ll be going to next year, I gave it a pass. But the $12 usual price reminded me why I now average one movie about every 18 months.

Dwight Williams writes:

January 8, 2012 at 8:35 PM

The most recent movie I’ve seen was the new Sherlock Holmes instalment. (From WB. Hrm…)

I would have liked to see more stuff at the theatres, but for that above-referenced “Thou shalt ONLY see this film in 3D format!” issue, as well as – in specific cases – the problem of getting Canadian movies into Canadian movie theatres. The MPAA still seems to have a Problem with that idea.

Also, the newest Martin Sheen film, The Way? I’d like to see it, but it seems to have been confirmed to second-run cinemas. You’d think a movie starring Martin Sheen could get more play in the chain theatres these days, right?

Mark writes:

January 8, 2012 at 10:59 PM

I’m not getting all the outrage. Doesn’t it all just boil down to adding a few weeks to an already several months long waiting time? Don’t they already have the waiting time from the films last day of theatrical release to it’s release on dvd which is about several months? Shouldn’t they be equally outraged from the moment the movie is pulled from the theaters? This sounds more like spoiled customers than corporate entitlement. Anyone remember when new releases were around 100 dollars and you couldn’t even buy a new vhs tape for cheap unless it was the rental store selling a used copy? Jeez, learn some patience people. Oh, and for the record, pirating the dvd because of lack of patience doesn’t make you Abbie Hoffman. ;)

James Schee writes:

January 9, 2012 at 3:22 AM

Honestly doesn’t change me very much. The movies that I want to own I’ll buy at the time I want them. Which is usually when they come out, though some I wait for a sale, like House season 7 for $15 at Target this weekend.

The only thing this means is just waiting a little longer to see something, and only runs the risk that I might forget why I wanted to see it in the first place. (which would save me $ anyway)

Johanna writes:

January 9, 2012 at 8:49 AM

No outrage, Mark, just discussion of what I think is a pointless/bad business decision. You’re completely right, that for most customers this won’t matter at all.

It is interesting to look back at how things used to be, as you recall before home video became an affordable option to own. What a review of the history reveals is that movie studios have ALWAYS complained about new technologies destroying their business, and they’ve never turned out to be right. Instead, new outlets bring new profits once they’re forced to adapt.

Jer writes:

January 9, 2012 at 2:07 PM

This analysis of the news suggests that Redbox and Blockbuster don’t intend to wait and will instead buy discs elsewhere

It also helps to underscore why Netflix tried to separate their dvd-by-mail arm from their streaming arm. The new release restrictions have to be hurting the dvd-by-mail part of the business, and spinning it off as a separate company – with no ties to the streaming wing – would remove the leverage that the studios have over the ability to rent new releases. (It won’t work – it would only make Netflix even MORE beholden to the studios – but it’s an understandable concern).

In related news, movie ticket sales are down, so ticket prices are going up.

Ah – the comic book industry model. That suggests to me that studios actually think that theaters are a dying concern and they’re going to attempt to squeeze as much as they can out of them from the die-hards, instead of trying to grow the business.

It makes me wonder how much of their revenue comes from the theatrical release these days. It seems like a lot of money should be coming in that way, but if they’re actually making more money from TV rights, DVD sales, etc. it might explain why they’re willing to strangle the business on the theatrical side of things to try to bleed every dollar out of it.

Ryan S. writes:

January 9, 2012 at 3:11 PM

I still see a movie on average of about 3-4 times per month. But we’re lucky enough to have The Alamo Drafthouse in town (Austin), and were it not for that, I would have given up on movies a long time ago. That said, its a pricey night out, even for older or outright old movies (they do $5 80′s movies) as I also grab dinner or lunch during the movie. Adding a couple of extra bucks on per person starts pushing even the great Alamo experience into “can’t afford it regularly” territory.

Johanna writes:

January 9, 2012 at 3:42 PM

I wish we had a really nice viewer-centered theater. Our old-style house has really cheap prices, but the seats are too uncomfortable to go.

takingitoutside writes:

January 9, 2012 at 10:32 PM

Meanwhile, I keep wondering how many consumers are like me and only buy movies on DVD that they’ve already seen at least once, or TV series that they’ve already seen a significant chunk of. I’ve seen pitifully few movies in the last few years, and I realized recently that my recent DVD buys have been more old favorites than new favorites.

If a decent proportion of other people are like me, lower ticket sales and difficult renting will have a direct impact on later sales.