Netflix Will Delay Renting New WB Releases

DesertBlade tips the news that Netflix will delay renting new releases from Warner Brothers for 28 days, and adds "Luckily I am so far behind in my movie watching that I will probably never catch up anyway." "It's part of a strategy by several studios to create staggered releases of DVDs so that the most profitable transactions are available first and cheaper rental options take effect further down the road. The move could be copied by other studios, forcing consumers to wait nearly a month if they want to rent popular movies from Netflix. ... The studio is hoping that the four-week window will push consumers interested in watching movies at home to buy the DVDs or pay a premium to rent them from stores like Blockbuster or from Internet and cable video-on-demand services. Warner Bros. already imposes a 28-day window on $1-a-night kiosk firm Redbox."

Comments

Re:What a great idea!

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I believe the term was "priced for rental." The idea was yes, the prices were absurd -- for anyone but a VHS rental business.

The economics of VHS tapes were different, though. Unlike DVDs, comparatively few people tended to actually go out and buy them, bar a few "core" titles (Disney movies for the kids, Star Wars, Godfather, etc.) VHS tapes were bulky and not easy to store, their packaging tended to look kinda crappy on your shelf, and their picture quality really was not good. Not only did they tend to wear out just from playing them -- and occasionally your VCR would outright destroy one -- but storebought tapes weren't that great quality to begin with. Remember, this was an analog tape medium, and it was in the manufacturers' interests to duplicate them for as low cost as possible. Often this meant they were made from low-quality materials and were duplicated on high-speed equipment. From a collector's/fan's standpoint, all but a very few were 4:3 pan and scan -- so between that and the poor resolution, the only real way to see your favorite movies was to wait for them to come to a local second-run theatre. So it became a kind of Catch-22 -- because VHS tapes were never that attractive, studios were never really able to get the economies of scale that would drive the cost of VHS releases down to where mainstream customers would pay for them.

People did buy laserdiscs, though, and those collectors were among the first to jump on the DVD-buying bandwagon. When regular people got word that DVDs gave you picture quality comparable to laserdiscs without all the disc flipping and swapping, DVD sales exploded. Way back in 2001, when cheap VHS tapes had become more common and DVDs were fairly new, revenue from VHS sales was still far less than that from VHS rentals -- but it was also less than the revenue from DVD sales, even back then. (This according to the Video Software Dealers Association.) I honestly think enough people buy DVD releases regularly enough that this waiting period won't be that big of a deal -- especially in the age of home theater. Even if you have to pay $20 to buy the disc, it's still cheaper than taking a date to the movies.