Link This |
Email this |
Blog This |
Comments (0)
DVD sales window way overblown
October 23, 2009
Netflix chief Reed Hastings said during the retailer's quarterly conference call yesterday that he thinks there may be economic opportunity for his company in stocking new release DVDs more cheaply by waiting four weeks or so after their general release to get them. In other words, Netflix may be willing to embrace the delayed window that Redbox is fighting tooth-and-nail. As long as the studios make it worth Netflix's while.
There's certainly news in Netflix's possible acceptance of a window. But the idea that it signals a broad move by studios to delay packaged media rental across the board until after sell-through window--as was reported in some quarters today--is overblown.
Warner has made clear its intention to renegotiate its Netflix deal on terms more favorable to the studio or impose a window on Netflix in the same way that it is imposing a 28-day delay on Redbox and other kiosks beginning next week. Other studios also are rethinking their Netflix deals, given falling DVD sales and their suspicion that cheap rentals--via both kiosks and Netflix--may be partly to blame.
The studios are looking for a way to either put these cheapest of rental options in a different window or make more money from them. Studios including Sony and Lionsgate, and Paramount on a trial basis, are already following the make more money path with Redbox and have done lucrative output deals at nice market share premiums.
Other things to consider before putting your faith in the idea that there is going to be a "DVD sales only" window:
Bricks-and-mortar rental stores, while not the healthiest they've ever been, still provide a significant revenue stream to studios. Its kiosks and subscriptions the studios take issue with.
The First Sale doctrine makes a "DVD sales only" policy unenforceable in the U.S. Retailers are free to buy DVDs and Blu-rays at retail (often at a lower cost than they pay through traditional distribution) and rent them.
A rental window is only one option being considered or experimented with by the studios. Paramount, in fact, has gone the opposite way and is testing DVD as a rental only format on some titles in hopes of pushing sales to Blu-ray.
Posted by Marcy Magiera on October 23, 2009 | Comments (0)
