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Edward R Murrow

Yep, just a matter of time. If you can't compete in the marketplace, get yourself a lawyer. This is the country where mediocrity is rewarded and the excellent are punished.

Ricklogic

The only thing that is being contested is marking DVD's "for sale only" since it is clear that other rentailers have the right to buy the DVD's at retail and then rent the DVD's out. But Weinstein has every right to sell only to Blockbuster on a rev share basis. Knowing this, Weinstein/Blockbuster may have attempted the overkill for publicity? The other rentailors have made the point in other articles that if they rent out DVD's from Weinstein that say "for sale only" it would look to their customers as if they were doing something wrong. Weinstein/Blocbuster will relent and still go with the deal that they made where only Blockbuster gets the DVD's on a rev share basis.

hawk5391

I think I commented at the time that it sounded like Restraint of Trade and I was hoping the Justice Dept looked into it. I guess these folks beat them to it.

Tester

"I think I commented at the time that it sounded like Restraint of Trade and I was hoping the Justice Dept looked into it. I guess these folks beat them to it."

Do you feel the same way with any "exclusive" that Netflix has?

superfunhappy

"This is the country where mediocrity is rewarded and the excellent are punished."


Just checking, are you aligning Blockbuster with excellence for this deal?

vio

I'm really anxious to see what Netflix is going to do counteract this(assuming they can do anything). Perhaps I don't understand the business well enough, but as far as I can tell, Netflix is pretty much screwed when it comes to Weinstein titles. It's one thing for an indie brick & mortar video store to simply go to Wal-Mart and buy themselves 10-20 copies of a Weinstein movie. But for some of Weinstein's bigger 2007 releases(such as sin city 2 and grindhouse), I'd estimate each Netflix shipping center would need anywhere from 1000-2000 copies. Snatching up a handful of DVDs from the local Wal-Mart isn't going to do a Netflix shipping center any good.

type-cast

"It's one thing for an indie brick & mortar video store to simply go to Wal-Mart and buy themselves 10-20 copies" - BUT "Snatching up a handful of DVDs from Wal-Mart isn't going to do a Netflix shipping center any good."

That implies that Netflix isn't as flexible as the indie brick & mortar video store, if we accept that a LOT of movies are not made in "Netflix Quantities." Shouldn't the goal of Netflix be to have Everything? There are lots of DVDs that Netflix doesn't have like porn and other region titles. Why? A demand exists. Netflix could easily supply it, but they don't. Maybe because They can't buy in "Netflix Quantities" porn and foreign discs.

Conclusion: Small Is Beautiful. Netflix can say they support indie films all they want, but they won't buy anything that they can't purchase in "Netflix Quantites." Inevitably, such a system will produce the same results of a chain like Wal-Mart. Mediocrity. Hence, this is a country where mediocrity (Netflix) is rewarded and excellence (Nicheflix) goes out of business. Netflix only carries things if they can buy "Netflix Quantities." Prove me wrong.

SmartFlix

This is an interesting case, and reflects something we've seen.
Weinstein obviously understands the First Sale Doctrine, but many
smaller vendors do not. In our business, we've come across a fair
number of vendors who believe that renting out videos with out
permission is illegal, and that it cuts into their profits. We've
usually been able to explain to these vendors that not only is it
legal, but that Hollywood's experience with the video rental
after-market showed that having a rental market increases a
studio's total profits.

In most cases, this explanation works, but there have been times that
we've been forced to the equivalent of "the CostCo option" by a vendor
that refuses to sell directly.

Travis J I Corcoran, President
SmartFlix

--
http://SmartFlix.com/
web's biggest how-to DVD rental store

vio

"In most cases, this explanation works, but there have been times that
we've been forced to the equivalent of "the CostCo option" by a vendor
that refuses to sell directly."

Personally I think this suit reeks of bitterness and is a waste of time. It's one thing for a behemoth like Wal-Mart to force things their way, but these little indie rentailers are getting in over their head. These movies are the property of The Weinstein Company and as such, the studio have every right to distribute AND label their product however they so desire. Is it sleazy on the part of Blockbuster and TWC's part to form this partnership and screw everyone else in the process? Sure it is, but this is a cut throat business and Blockbuster is doing what they feel is necessary to stay on top. None of these little rinky dink operations have any business telling TWC how to label their DVDs. They should consider themselves lucky that they have any means to rent them at all. They could be in Netflix's boat here and that's even worse IMO.

Mike_K

"I'd estimate each Netflix shipping center would need anywhere from 1000-2000 copies. Snatching up a handful of DVDs from the local Wal-Mart isn't going to do a Netflix shipping center any good."

Costco and Walmart probably have tens of thousands of copies of any given title, especially if it is a main-stream movie.

So it really is not a problem for Netflix other than labeling of the discs, which this suit is about

corey3rd

I was out in the sticks recently and it was amazing to be in an area that wasn't serviced by Blockbuster. They had an indie videoshop. Judging from the slow mail service, it seems like these folks are going to get screwed when Grindhouse 2 comes out on DVD.

The indie chains need to fight it at this level before they get shafted by the big boys that have titles that people really want to see.

hawk5391

"Do you feel the same way with any "exclusive" that Netflix has?"

I wasn't aware of Netflix exclusives (I'm relatively new here) but yes, I would feel the same way. This could easily get out of control. Like I and many others commented on the original thread, I don't want to have to eventually go to fifteen different stores to satisfy my video rental needs.

Aron

Exclusives are only ever going to make up a small percentage of the total Hollywood\indie output. There are very powerful disincentives to retailing a product through a single sales channel. Blockbuster has to pay out the nose (and I suspect it's not worth it) for the Weinstein exclusive to make up for loss rental dollars from other channels.

Aron

If I were Blockbuster, I'd put a Blockbuster advertisement on the DVD that plays before the menu. That might slow Netflix down.

Then again, if I were Blockbuster I wouldn't of made this deal in the first place.

vio

"Costco and Walmart probably have tens of thousands of copies of any given title, especially if it is a main-stream movie."

At EACH location? I highly doubt that. What is Netflix going to do, pay someone to drive around in a truck to every Wal-Mart and Costco in the State until they finally gather up 2000 DVDs of said movie?

I guess we'll have to wait and see what Netflix does, but I suspect you'll be unable to rent most(if not all) Weinstein titles from Netflix come January. Their shipping centers serve million of customers and as a result their volume is far too large for anything but direct ordering from a distributor. In this case, it's Genius Products, who are of course shutting out everyone but Blockbuster for the next 4 years.

vio

"If I were Blockbuster, I'd put a Blockbuster advertisement on the DVD that plays before the menu. That might slow Netflix down."

Haha. Wouldn't it be ironic if you rented a Weinstein movie from Netflix and there was an advertisement for Blockbuster Online/Total Access on it? Heh.

gir

Do you really think NetFlix is going to need 2,000 copies of any Weinstein DVD?

I suspect walmart.com would be happy to sell you two or three hundred copies, especially if you pre-order.

vio

"Do you really think NetFlix is going to need 2,000 copies of any Weinstein DVD?"

For some of Weinstein's movies, I would say that's a conservative number. We're talking about over 5 million(and growing) customers renting from just 40 shipping centers. Netflix just isn't spread out enough. They have to order BIG on any major theatrical title. And even then, many of their customers end up waiting weeks, even months, to finally get their hands on that movie.

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