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

[bluejedi]

Wow...this is utter BULL. I guess I'll just wait an extra 28 days to get WB titles.

Not like I'm going to hurt for anything to watch. I've got around 700 disks (tv shows, new releases, some foreign films and older titles spanning 4 decades) spread out across three lists.

If I want to buy a movie that badly, I'll but it to begin with. I won't wait 28 days...I'll just outright buy it.

I'm already waiting on average 20-30 days for a new release from any studio to begin with...so this won't affect me.

If I have to see a new release that badly, I'll just go to walmart the day it comes out and buy it for $15.

Guys....now I am NOT taking sides here. Really. I'm not.

To those of you saying your canceling your netflix account over this...please remember this isn't entirely netflix's fault. WB is just pissed they didn't think of a way to bring cheap DVD rentals to the masses first.

In the end I hope WB gets screwed over becuase I'm dam sure there's thousands of people like who are giving WB studios the finger. This little hissy fit WB is throwing is not only going to hurt Netflix's bottom line but WB's bottom line.

[Jeff]

28 days is fine in exchange for more streaming titles.

[Seth Taylor]

As a result of this announcement, I've just canceled my Netflix account and will join GreenCine today (www.greencine.com).

That was easy.

[Kim]

Contrary to the posted story by Netflix's chief content officer(whatever the heck that is but bet he makes big bucks) Ted Sarandos, I for one mainly signed up with Netflix to get new DVD releases. Have been a customer since 2004. Another example of crappy customer service. Time to rethink their service and perhaps go back to the video store.

[Seth]

Read between the tea leaves, folks.

Netflix will soon be gobbled up by Amazon or someone else.

Reed Hastings does not bend over for anybody. I take this as a sign that the business model Reed started is becoming difficult or impossible to maintain in this landscape. There are too few media conglomerates with too much power. Witness the constant cable wars with one titan threatening to turn off another's channels.

The only way to beat them today is to join them. I give Netflix less than 18 months to be sold. It just doesn't make any sense for them to go it alone anymore.

Farewell, beautiful independent Netflix.

[twitter.com/zweigand]

Sorry to disagree with the people above (apparently you guys don't have Rokus, etc.), but an upgraded streaming library is freaking great news.

[Smokey99]

A discount from Netflix to its customers would be nice... However, I doubt they are going to pass on the savings.

[hayj]

The result of this will be increased redbox rentals and more WB content online.

This is fine with me. We are shifting to streaming content more and more. If I want to see a movie that bad I'll see it in the theaters or get it from another source such as redbox. Honestly, that would probably turn out to be just a few movies per year. The rest I can wait for and in the meantime enjoy a larger streaming catalog. Definitely a winning solution for me.

[Terry Myers]

Hello Blockbuster. Reed, typically you use your brain. Not sure what you were thinking here...

[Anthony]

It doesn't affect me all that much as I watch new movies months after they are available to rent. And more streaming movies is always good so while this distubs me a little it doesn't really bother me too much.

[Racer108]

I could care less if I have to wait an additional month to see new WB releases. I already didn't see (movie) in the cinema, because I didn't want to potentially waste $11.75 on a movie I may not like much.

On the other hand, if I did love (movie) so much, I would have bought it anyway. This waiting period will not increase DVD sales.

[Brian]

I switched to Netflix in 2000 when I got fed up with Blockbuster sticking their customers with exorbitant late fees. I guess Netflix is all grown up now since they've forgotten to put their customers first.

This is a poor trade. I want my movies when they're available to the general public with HD picture and multi-channel audio, not more streaming 2nd rate content in stereo.

Two thumbs way down.

[JJH2]

People are so dramatic. I find it hard to believe that any but a handful of customers are going to jump ship because of this - especially as it looks likely that other rental services (or at least Blockbuster) are going to be strong-armed into the same arrangement. It would be particularly ironic, as one poster suggested that he did, to quit Netflix and join GreenCine, since the latter is oriented towards esoteric titles, and you would be far less likely to get a newly released movie from them than you would Netflix even with a month waiting period.

[Pete Mitchell]

Anyone who thinks this will lead to shorter queues for new releases is a fool.

@BoB - no price increase in years? How about that big fee increase for Blu-ray?

Way to take it up the ass, Netflix!

[jmess5]

Does this mean that you won't bother posting the new releases list every Monday? Or will you wait the 28 days only for new WB releases?

And I haven't bought a new DVD movie since 2001 (joined Netflix), I am certainly not going to start now because some money-grubbing studio decided that they're not making enough money. Too bad. I took a big pay cut last year, maybe it's time for you and your overpaid exec's to do the same.

[Bast]

I don't stream much because of no captioning for streaming titles (I am HoH/deaf). I don't buy DVDs because of limited income (buy 1 DVD a month or rent via Netflix for around the same price for three out). So I guess for me this is a lose-lose proposition, so I'm rather bummed.

[Mr Nethead]

This is actually a brilliant move by Netflix. They volunteered to do something that WB probably would've forced them to do anyway. But by volunteering they get a discount and more copies and a larger streaming library.

But alas, like Bast I am hard of hearing, so streaming doesn't work so well for me. But I think one of the previous posts on this blog said something about captions maybe being available at some point in 2010??

[Lance]

Anyone with any business sense knows that focusing on your vendors and making sure they are happy while screwing your customers is a perfect business plan.

Hopefully Warner will be just as successful propping up DVD sales as the music business has been at propping up CD sales...wait a minute!

Lance

[RAV]

I couldn't be happier with this model.

If I really want a new release, I'll drop by Redbox on the way home and pick it up - after I check for the title online to be sure what is available.

More streaming of high quality titles is what I want from this deal.

Let Redbox figure how to survive. With $1 rentals and free codes all over the internet, let them attract all of the attention of the studios.

[String Theory]

DVD sales are in decline for all of the major studios and this is a desperate attempt to slow it down but it will not work in the end. The movie industry (re:DVD's# is about where the music industry #re:CD's) was about 8 years ago. They can smell their own death. This move will benefit Netflix and her subscribers and is proof that she is becoming a powerhouse in the media delivery business. :)

[RB]

I think that for those of us that are mainly streamers, this is terrific. If it means more newer movies to watch on the Roku, I'm all for it. I'm so backed up on my queues now, it's not funny. Can't wait to see how it works.

[Rudy]

I wait longer than 28 days for all new releases on netflix anyway so this is no big deal...I currently have about 15 movies at the top of my queue with very long to long waits for a very long time now.

[Kathie]

So, basically what your telling us is that if we want to continue to rent new releases we need to go elsewhere?? Not only need to reconsider our membership, but thinking my stock might need to be sold before the plummet starts!

[Patrick]

I'm interested to see what sort of catalog comes from Warner. Is it the whole catalog?

As for waiting 28 days that's been pretty typical for those on my queue already. I love NetFlix - if I can't get a new release right away no biggie. There's plenty of other great flicks to rent or stream.

To end - Warner's business model is flawed. Five / ten years from now physical media is history. Everything will come from the "cloud".

[Dacker]

First Netflix downgrades its Blu-ray customers by slapping a surcharge on us, now they generously provide another downgrade in the form of a new release delay.

This will drive me to my local Blockbuster store, not toward buying a movie.

I'm sure others will be heading to bittorrent....

[Andrew]

This is crap. Netflix is a DVD/Blu Ray service. The streaming video may be the future, but the catalog isn't dependable at this time. You never know what will be available and when.

They have compromised part of their core business for something undefined and of questionable value.

Other than price breaks, I don't see how studios can stop Netflix from obtaining new releases.

At the same time, I can't say the decision will really affect me. Going from theater to DVD is so quick now that 28 days won't matter. It won't affect my DVD purchasing habits one bit.

[Kodai]

It will heavily promote bittorrent piracy.

[James Glenn]

Check it out guys:

http://smashgods.com/2010/01/06/thanks-netflix-you-just-sold-us-out/

[Adam Gott]

I don't really care so much about waiting 28 days but it seems that I am already waiting that much for new release blu-rays as it is so I guess I can just add another 28 days to my wait now (?).

[YYahooeys]

I love it. I can't seem to get a new release title to my door before 4 weeks anyway. This deal seems to provide more discs which increases the chances of actually seeing it at 4 weeks instead of even longer, which hasn't been unusual. Plus, more streaming content would rock. Watched 10 movies streaming over the holidays in the period of time that it would have taken me to get 2 discs by mail. Only concern, *please* work on better quality streams. I've run across one too many pan-and-scan streams. Make 'em OAR and I'm sold.

[twitter.com/SouthPaw42]

Well Warner Bothers just made torrents look much better. I thought the idea was to promote legal ways of watching movies.

[BP]

I am amazed that in nearly every thread about New Releases/Redbox/whatever people always say that they don't use Netflix for new releases... then these same people turn around and call Netflix sell-outs. Which is it guys?

Pud's (Edward Murrow) going to have a field day with this one.

[John McLachlan]

SO the DVD market is collapsing in favor of rentals and streaming - so they try to hinder rental and streaming and pretend sale of DVDs will stay high forever. Did these guys steal their gameplan from the CD industry??

[Bryan Bortz]

If this is how they can get more big and in demand movies on streaming, I am all for it!

[Sock Puppet]

Oh Wahhhhh!!!! To all the whiners! Baby wanna Bottle? Jeesh!

You didn't go to the theater to see it, and you had to wait... WTH is another month?

Plus this will triple (read the articles) WB's streaming titles.. That means for every one title they have now, means there will be 3... Do the math...

Redbox will lose their lawsuit, and cannot sustain the $1 a day business model by buying new releases from Walmart. BlockBuster has to charge more for the latest new releases, because they agreed to pay the studios a % or each rental amount.

This will backfire on the studios, and when it does... Netflix will have their nice pretty contracts giving them access to more streaming content, and lower per unit cost for new releases, even if the stupios change their minds and go back to the way it was.

[Kenny Johnson]

I checked Feedflix and according to Feedflix I average 1 DVD and 50 streaming titles from Netflix. Needless to say, this is awesome news for me (more streaming titles!)

[David]

if it keeps cost down - I'm def all for it.

[Ivy]

i have been waiting forever for new releases anyway it wont matter to me i just hope that when they are released there are more copies so i can actually see the movie and not have to wait another 2 months to see it.

[Fred]

This seems like an okay trade-off to me. Ideally, there wouldn't be such a long window between new releases and availability, Warner would realize this is a lousy business model and almost certainly won't increase DVD sales, and all of this material would already be available for streaming anyway. But we don't live in an ideal world. I can easily wait the 28 days. With many DVD releases coming much sooner than ever after theatrical runs anyway, it doesn't seem like that big a deal. It's not even remotely something I'd consider canceling my subscription over.

[Fred Fredrickson]

This would be a good time for blockbuster to strike netflix.. if only blockbuster could do so in a way that didn't bankrupt them. Every weakness blockbuster finds in netflix is usually a gaping void where money flies out the door. Blockbuster figures it out first hand each time- in store trade ins? Great idea to kick netflix with, but not profitable.

Now new releases? Get them a month earlier at blockbuster! Great concept, but guessing by the cost the studios will charge- not profitable again.