Warner makes Netflix delay new movies 4 weeks
updated 05:15 pm EST, Wed January 6, 2010
Streaming threat makes Warner stall Netflix
Netflix today said it had struck a deal with Warner Bros. to keep receiving new release movies. Under the terms, Blu-ray and DVD movies will only reach Netflix four weeks after they're first available at physical stores. In exchange, Netflix rights to Warner's movies for its Watch Instantly streaming feature and should see the movie catalog expand significantly beyond its current levels.
The movie rental firm interprets the move as a "win-win" partly because it addresses problems the company has had with supply of new release titles in the past as well as lowering the bulk price it pays to get new movies.
Nonetheless, the necessary delay has admittedly been implemented to help Warner, which wants the roughly month-long interval to protect its physical movie sales. Studios have increasingly pushed back against the shift to online downloads, and while stores like iTunes and the Zune Marketplace already require delays between purchases and rentals, mixed services like Netflix haven't had their physical copies restricted to avoid killing their Internet components until today.
The move follows legal efforts by studios to limit the accessibility of new titles to the kiosk-based Redbox service, which so far doesn't have an Internet aspect but whose very low cost rentals have been perceived as a threat to DVD sales.
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This will only serve to drive up piracy. By the time a month's gone by after the DVD/BluRay release and accompanying advertising blitz, many will have completely forgotten about the movies in question. This is only going to harm Warner's rental revenues, as the amount of people who choose to buy a movie because it's unavailable for rent will be insufficient to make up for the lost rentals as the movie's public awareness fades, and as a significant portion turn to piracy when convenient and affordable options are taken away from them.