Netflix Signs Deal With Warner Bros. to Wait 28 Days for New Releases

As expected, Netflix has signed a deal with Warner Bros. to wait 28 days after the DVD release to offer new releases. In return Netflix will get a discount on Warner DVDs and access to Warner movies and TV shows for streaming. Netflix is expected to sign similar deals with the other major studios, effectively creating a new DVD rental window.

From the press release:

“We’ve been discussing new approaches with Warner Bros. for some time now and believe we’ve come up with a creative solution that is a ‘win-win’ all around,” said Ted Sarandos, chief content officer for Netflix. “We’re able to help an important business partner meet its objectives while improving service levels for our members by acquiring substantially more units than in the past after a relatively short sell-through window. At the same time, we’re able to extend the range of choices available to be streamed to our members.”

The agreement covering DVD and Blu-ray provides a means for Warner Bros. to continue to directly supply Netflix with new titles while establishing a schedule that allows Warner Bros. to get the most from the sales potential of those titles (75 percent of sell-through occurs in the first four weeks) and maximize VOD usage. Netflix benefits from reduced product costs and better availability of new releases. New releases from all suppliers account for about 30 percent of Netflix shipments.

It'll be interesting to see if Blockbuster and Redbox sign similar deals.

What do you think of the new DVD rental window?

Thanks to Gowan & Doron for sending this in.

Comments

[matt]

Wow! What a great deal for consumers! I'm sure Netflix will pass the savings right on to it's customers!

[Tootie]

Yay for more (pixelated) streaming content, but nay for waiting even longer for Blu-rays than I do now.

[Kevin]

The studios do realize they're increasing the level of piracy exponentially with these deals, right?

[Ben]

So how much of the Warner catalog is going to streaming?

[Bullard]

This doesn't really affect me. I am about a month behind in watching new releases. Also added streaming content could be nice.

[Tim]

If it means more streaming content on my shinny new Roku, then I'm cool with it. I love that little bugger.

For DVDs, I don't mind waiting another month for rentals, most new popular releases are listed as long wait for me anyway.

[MP]

Exactly how is this a win for anybody but Warner Brothers? The new streaming titles are going to be catalog titles that are already available on disc from Netflix. They're saving money, Warner's is (theoretically) making money, and customers are getting hosed. I guess this might be a win for Blockbuster, with their new WB releases.

[Rusty Spell]

If most DVD sales happen in the first four weeks, won't they *still* happen in the first four weeks? Those who planned on renting new releases probably won't buy them if they weren't going to already.

[Dennis]

Sounds kind of crappy for customers. But to be honest, I will probably get more enjoyment out of having more streaming options (assuming they're decent). I only pay attention to new DVD releases through Netflix, so another 28 days will likely go unnoticed. It may mean I go to the local second-run theater more, since the movies often show up there about the same time as the DVD.

[Busthead]

If the studios knew anything other than what the inside of their own butts look like, they'd be smart enough to figure out that making users wait to rent is not the solution to selling more DVDs. LOWERING THE PRICE and providing better products/packaging is the way to get consumers to buy rather than rent.

No doubt they will price gouge during the sell-through period. This is the same mindset that drove music studios to charge exorbitant prices for CDs. What happened back then? The Internet became the "Music Stealing Network."

I'm truly dumbfounded. It's like the word "value" is foreign to them.

[Eric]

I rent Blu-ray DVDs from Netflix to see if I want to later buy them. I really like first-run movies on Blu-ray. But this is a BIG letdown to me. I most definitely will NOT go out and buy them before renting them. Also, if I go rent them from Blockbuster, then I'll never come back to Netflix to see them. This is a lose-lose situation for the consumer. Less first run movies to watch when they first come out on DVD. Netflix is simply selling out their customers.

[Ewingo401]

If this move provides more quality content for streaming then its a good thing.

[Tom]

I've had a few new releases at the top of my queue for a month or more. So from my perspective I'll wait 28 days for a release of many more available units of a title. I'll actually get some of these titles sooner while Warner delays its revenue stream by four weeks at a lower per unit price.

How do these morons keep their jobs? No wonder Netflix is eating their lunch.

[JT]

Love it. I'm so far behind it doesn't matter and since I only rent from Netflix, I won't notice it. Hopefully the streaming catalogue is huge.

[TxGowan]

Also, in theory, they could use the discounts to buy more copies of DVDs making the wait times shorter in your queue.

[MiniMonkey]

Overall, I think it's a good thing. It says right in the quote, "acquiring substantially more units than in the past," so they will be using the savings to buy more copies of each movie, thus decreasing wait times which, in effect, is basically passing the savings on to consumers. And I'm all for more Streaming titles. With a queue that's always capped out at 500, I don't think the extra month wait will bother me at all, except maybe during awards season when I want to catch as many of the nominated new-releases before the shows air.

[aargos]

Netflix is a great value and waiting a month longer to get the latest release means absolutely nothing to me.

[BoB]

1st... What's the big deal? You wait months for the DVD after a theater release, so what's a few more days?!

2nd... Netflix has not raised it's prices for years! (other than that brief time when they tried 19.99 for a bit) What other company can you say that about?! Cable? Sat? Phone? Credit Card? Food? Gas?!

I'm quite fine with it.

[Melinda]

It's been years since I bought movies without seeing them first, so this isn't going to get the studios any additional $$ from me. I'll still rent before I buy. This is still kind of an FU to the consumer.

[Mx Power]

SO Netflix gets more units after a month of no availability...but will they need those extra units once consumers either rent from a vendor who doesn't have this WB 'deal' or just revrt to a torrent?

[angry consumer]

boooooooooooooooooooooooooo

[JJH2]

The movie studios are desperately trying to hold on to a business model that is slowly but surely going to become extinct. DVD sales have dropped significantly two years running (even including Blu-Ray sales), and there's no sign that they are going to pick up again. This is a last ditch effort to milk those disc sales for everything they're worth.

At the same time, I can only imagine the pressure Netflix is under to comply. The studios have basically stated that they're willing to impose purchasing bans on new releases if the rental companies don't voluntarily agree to a waiting period. There's no long-term benefit to Netflix from being openly antagonistic to the studios, and I can hardly blame them for caving. New instant streaming content is always (well, almost always...) a plus, and something that I enjoy browsing through to watch on a whim. And if it's true that Netflix is going to get more discs and a discount on disc prices, it may even be that, on the whole, I'll end up seeing these new releases earlier than I might have before.

[EGB]

I usually have to wait more than that to get a new release DVD anyway.

[Michael F]

The only way to show Netflix how you feel about being sold out is by cancelling your subscription, which I will do the day before my next billing period.

[yeswor00]

I will not buy a WB DVD ever again.

[dAVe]

I think this would be a win for Netflix subscribers if after the 28 day window we could either stream the title or rent the DVD/Blu-ray. Netflix has all but said they'd rather pay the media companies for recent release titles to stream rather than pay the USPS to deliver the 30% envelops filled with the hot, new release.

But I have a feeling that the streaming content Warner intents to release to Netflix will be the typical 1+ year old stuff we're seeing from other media companies but just more of it.

[Kenny Johnson]

Personally, I'm happy about this news. I rarely rent DVDs within the first 28 days anyway and even moreso, I rarely watch DVDs anymore -- 90% of my movie watching is streaming Netflix.

If this means that Netflix has access to more streaming, then that's fantastic. Streaming on my 50" HDTV looks great -- especially when they encode it for HD.

[Nate]

I'm happy about this because I don't purchase disks and have no problem waiting (my disk queue has 300-400 titles). I do care about more streaming titles and all indications are pointing to more access to WB films and TV as a result of this deal.

[Robert]

It doesn't affect me because we rarely watch NetFlix DVDs in my household. Streaming is where we get the value. If Warner gives access to newer / better titles for streaming, I'm all for it. If not, Netflix will be worth a bit less than it was last year, but, as I said, it doesn't really affect me.

[CJ]

I'm personally indifferent. However, this marketing scheme could mean more downloads, by those techies who don't want to wait 28 days to rent, of the mpg4 version of the DVD (easily transcoded back to DVD) which you know will be available on numerous internet sites the release day of the sale DVD.

[S]

New releases aren't really a big thing for me. I'd much rather browse the selection and pick out a title I think looks interesting, instead of feeling like I need to watch a new release simply because it's new.

More streaming content is definitely a good thing. Kind of hard to go wrong with literally instant gratification.

[Tim]

Couldn't care less. Netflix means movies arrive in my mail and I watch them. I really have no clue when a given movie is coming out on DVD.

Don't really understand how these agreements are legal though.

[Ronald Smith]

Back to the torrent sites.

[George]

I sometimes rent movies within the first 28 days, especially if it's something I'm anxiously awaiting. (The Hangover, 9, Paranormal for example) If Blockbuster does not sign a similar deal, and offers new releases AND manages to equal Netflix's catalog of older titles - I will cancel and switch. I do enjoy streaming, and have found some decent titles. However, I look at it more as an "extra" then something I'd pay for. I use other free services like Hulu more often then Netflix. (I even prefer www.southparkstudios.com over Netflix for my SP fix)

[Final taxi]

I have 6 empty video stores in my 30 mile radius. With redbox and Netflix they could not keep up. As I understand it- Movie Gallery, Blockbuster and Hollywood Video will get the new releases. This will keep them alive and keep people employed.
I'm all for it if I can get a new release from a rental place or I can wait 30 days till Netflix gets it.

It just makes for two 'release dates' now. It's much like the way some movies come out in limited release before it goes to all theaters.

[Lon Seidman]

This is bad for consumers.. I don't know if I'm going to continue my netflix subscription for much longer.

[Tino]

what a bunch of whiners. If you can't find enough things to watch in the next 28 days, you probably should cancel your subscription and go watch it in the theatre.

Since I have about a 2-year backlog right now, any deal that is less than a 730-day window is fine by me.

[Nialla]

It won't affect me personally, as I don't generally watch many new movies. My addiction is TV series, so my queue is very long.

I also can't use streaming because my connection speed isn't high enough. I live in a rural area, so it's not like I can pop over to a Blockbuster to rent or anywhere else to buy on a whim either, so it's all a moot point to me.

It's definitely a grab for more money, but the more control the studio tries to take, the more torrents are used. Most people aren't going to buy something they were planning to rent. I very rarely buy anything these days, and those I do, I've rented previously.

[david]

My guess is that people whow say "I will not buy a WB DVD ever again" have actually, um, never bought a WB DVD before. Jus' sayin.

[Gran]

@Matt Netflix says they'll move the savings towards buying more streaming content. So, in a way, yes, they are passing it to us.