http://www.latimes.com/business/la-fi-ct-redbox-netflix-20120107,0,2806609.storyWarner Bros. is about to reignite a battle with Redbox and Blockbuster over how long consumers have to wait to rent DVDs.
The Time Warner Inc.-owned studio is instituting a new policy that all DVD rental services must wait 56 days from the time the disc goes on sale at retail stores like Wal-Mart and Best Buy until consumers can rent them, according to people with knowledge of the matter who were not authorized to discuss it publicly. That's double the current 28-day "window."
A spokesman for Warner Bros.' home entertainment division declined to comment. But executives at the studio have previously said they were seeking a longer delay, which they believe will help boost flagging DVD sales and video on demand, both of which are more profitable for them than disc rentals.
Netflix has agreed to abide by the 56-day delay, one of the people close to the situation confirmed.
But Redbox will wait no longer than 28 days to rent discs, interim President Gregg Kaplan said in an interview this fall. A spokeswoman confirmed Friday that the company's position has not changed.
A person familiar with the thinking of executives at Dish Network-owned Blockbuster said the only remaining nationwide DVD rental chain is also not willing to wait 56 days to offer new releases from Warner Bros.
Because those companies won't be able to buy discs directly from Warner Bros., they will have to purchase them in bulk from retail stores. That entails hiring shoppers to pick up DVDs and paying full retail price, rather than the lower wholesale price charged by the studio.
Redbox used the same tactic in 2009 and 2010 when the kiosk-rental company was in a similar fight with Warner, 20th Century Fox and Universal Pictures. It ultimately agreed to abide by the 28-day delay.
The new policy, expected to be announced next week at the Consumer Electronics Show in Las Vegas, is to take effect Feb. 1, the day after Warner Bros.' current deals with Netflix and Redbox expire.
In exchange for the 56-day delay, Warner will charge rental services a lower wholesale price. In Netflix's case, that will allow the company to save money that it can spend instead on digital content for its streaming service, which has become a more important part of its business than DVDs by mail.
Redbox and Blockbuster, however, are more dependent on new releases and would probably see declines in their revenue if they made customers wait nearly two months to rent movies that are already for sale in stores or available online via video on demand.
Previously, Blockbuster was the only major DVD renter that offered discs the same day they went on sale, an advantage studios gave the struggling company as it went through bankruptcy last year. The company was ultimately bought at auction by Dish Network.
Warner Bros.' new policy could soon be adopted by Universal Pictures. That studio's agreements with Redbox and Netflix, which include a similar 28-day delay, expire in April.
Fox's agreements with the two services expire in April 2013. Fox's home entertainment President Mike Dunn said he has been satisfied with the results of the 28-day window.
Paramount Pictures allows Redbox and Netflix to offer its DVDs the same day they go on sale. Sony Pictures has simultaneous "day and date" releases with Redbox but makes Netflix wait 28 days for its films that perform best at the box office. Walt Disney Studios does not impose a delay, but does charge more for new releases.
http://www.movies.com/movie-news/ne...-days-hbo-tells-them-to-buy-retail-discs/6097As if there were any remaining doubt that distributors see Netflix as a growing threat to their retail business model, everyone's favorite DVDs-by-mail and streaming service just hit two more roadblocks on its quest to stuff mailboxes and Internet tubes with as many movies as possible.
First, the least ominous of the two: HBO has decided to discontinue its discount relationship with the company. That doesn't mean Netflix will suddenly stop carrying HBO content, it just means they're no longer allowed to buy the discs from HBO on the cheap. Basically, part of Netflix' business model is that it buys huge volumes of discs directly from the manufacturer (it's not like they go out to Best Buy every Tuesday, buy a bunch of movies and just throw away the cases) instead of a retailer. Now HBO has essentially told them that if they want to give their customer's the next season of, say, True Blood, they'll have to go go buy a bunch of copies at retail and toss the cases.
The reason behind the move is a simple one: HBO doesn't need Netflix. It's one of the few content creators in the market that proves season after season that its premium content is indeed worth the premium they charge. They have their own Netflix-like streaming service in HBO Go, which is gaining more traction as more cable providers adopt the feature, so there's little incentive for HBO to dillute the air of exclusivity they've been cultivating for decades by cutting a direct competitor like Netflix a break.
The second slap Netflix received this week, however, is a bigger deal. If you'll recall, last year saw a wave of studios putting an end to the day-and-date availability of their new DVDs and Blu-rays on Netflix' service. Several of the biggest studios around only agreed to give their highly coveted new releases to rental companies 28 days after they're first available on DVD. Now, after several months of contemplation, Warner Bros. has decided to double down on that window by another 28 days.
Of course, this new 56-day window isn't exclusive to Netflix. Warner Bros. are applying it to all rental providers, which means you're going to have to wait two months after The Dark Knight Rises hits DVD to find it in a Redbox or on the shelves of a Blockbuster (if you can even find a Blockbuster these days). And while one studio barring rentals for two months may not seem like a big deal, it'll become one if Paramount, Fox and the rest of the Hollywood giants decide to join in the scheme, which is meant to limit supply and thus force eager audiences to buy more movies instead of renting them. Or, you know, just download them illegally.
