8 ms·

Netflix Caves to Warner Brothers

29 points by Flemlord 17y ago

pg 17y ago
This could be an opening for a startup.
- ivankirigin 17y ago
  This wasn't a mistake. They are hurting immediate releases to increase their ability to stream movies. The latter is the future. I've paid money to stream a movie I can rent on netflix. The experience is so much better, even with DRM which only lets you watch once. Netflix lets you watch many times. We need to move to a future where people can pay to watch the movie on their TV instead of paying to get a ticket at a theatre. Then we need to enable subscription pricing for movies that aren't new releases.
  - deleted 17y ago
    [deleted]
  - anigbrowl 17y ago
    We need to move to a future where people can pay to watch the movie on their TV instead of paying to get a ticket at a theatre. Eeek - no thanks! I'd like a future were we can do the former as easily as the latter - but absolutely not instead. I have a number of reasons for this: 1. I love watching a movie in the theater. I know, adverts, overpriced popcorn, sometimes the person in front is too tall or the person in back keeps whispering, but I like sitting in the middle of a crowd that gasps or laughs in unison, and I particularly like seeing the film on a creen bigger than my house... 2. ...because when we make movies, we at least try to have them look good that way. It's supposed to be all-enveloping and ridiculously bigger than life. TV diminishes movies: reducing them in size robs them of much emotional impact. And it is our big fat emotions which we wish to impose upon - er, share with you, the viewers. 3. if you've made a film and got it into an important festival (the kind that buyers show up to, rather than just film buffs), then the reaction of a full-size audience sells the film better than any private screening possibly could. So it's more likely to sell, and for more money. And we crave your money almost as much as we crave your adulation. More, in some cases. 4. Seriously, we need the money. People have this image of the film business as being full of greedy executives and pouty stars, but that's like saying everyone in the software industry is like Steve Ballmer or Larry Ellison. The vast majority of people make a much more modest living. If you want to make your own films, that's pretty expensive so you usually have to beg other people to lend you the money. 5. If you're not in a festival but you know what you're doing, you can rent a theater relatively cheaply and screen your film there. For some kinds of material this can be an effective sales strategy - and it may be much faster and cheaper than trying to persuade a distributor by renting a tiny stand at a film market... 6. ...and you need a distributor, because it's bloody hard to get your movie into Netflix's catalog otherwise, and Netflix is the 800 lb gorilla of DVD rental. You can also put a movie on iTunes, but it turns out that not that many people want to rent their movies that way and I'm told by distributors that having your film there isn't worth nearly as much as on Netflix. 7. Of course you can self-distribute, but it's very hard to make money this way. You could give it away free on the net, but your return on paypal donations will be pretty minimal. I very much liked the idea of TipJoy, but as you found yourself it's hard to build a business model around micropayments. It's even harder if you're trying to share revenue with a CDN that can offer decent streaming. Don't get me wrong, I'm all in favor of streaming and other methods of web delivery. In some senses it's easier to market your film than ever. But as film becomes more of an on-demand commodity rather than something people get up and go to (as in theaters), building a revenue model becomes very tricky. It's far cheaper than it used to be to make a film, thanks to technology, but it's still a tremendous amount of work, and as I said elsewhere you can't iterate - when someone decides to watch a movie, they want a finished product that runs for 80+ minutes, and that's quite a bit of work to put together.
- jcl 17y ago
  You mean, to offer movies for rent earlier than Netflix? Isn't that what RedBox is doing?
  - anigbrowl 17y ago
    Not exactly, although that's what they['d like to be doing - only the distributors are currently refusing to sell to them if they do that, unless they agree to raise the price of new releases. http://www.videobusiness.com/article/CA6676220.html http://www.videobusiness.com/article/CA6676220.html
- anigbrowl 17y ago
  I seriously doubt it, Paul. DVDs bought by consumers are saddled with extremely restrictive license terms. When Netflix or any other rental business buys DVDs, they don't just buy the same copy you and I do, but a rental version with different licensing terms which costs considerably more - I forget how much, but I think's around $80 per disc, though that's probably gone down somewhat. The content is (almost always) identical but the product code is different. How can you provide a rental service to people during the 28-day DVD sales window without breaking the license terms? That's basically pay-per-view, and PPV is dead from the distributor's standpoint, there is almost no money in it now. Part of the problem (for the distributors) is not that netflix rents to everyone, but that they don't charge any late fees. for years the video business made profit in 2 ways: new hit films that everyone wanted to watch but couldn't buy yet, and late fees - both of which subsidized all the other movies that didn't attract such a big audience but still took up shelf space. Well Netflix's business model depends on massive volume and warehousing, and it turns out consumers are willing to wait the 2-3 days required for postal transfer. And since there's no late fees, if there's a movie you really love you could just keep it out for a month and watch it 20 times until you're sick of it, whereas previously you'd rent it, go crazy about it, and then buy the DVD because that was much more economical than keeping it or wasting time at the video store waiting for it to go back on the shelf so you could rent it again. So the problem is not that most movies are crap, because only a very small number of movies appeal to almost everybody; most people only like a narrow range of genres and actors and find others uninteresting. Furthermore, we've only been able to rent videos/DVDs for about a single generation; before that the only way to see great old movies was in art theaters and on TV. Now you can fit the 100 greatest movies of all time onto an IPod, goddamn. It's easy to be sniffy about what's on at the theater when you can hire a comfy chair for the price of a few lattes and pull a century of movie greats out of your pocket or laptop bag. Obviously the answer is 'make something awesome' and people will throw money at you. But this is quite hard to do. I'm in the middle of making a somewhat awesome little movie right now (today is a day off) and we're doing it in a very hacker-ish way with a tiny budget in the 5 figure range. But in the movie business you can't iterate, you have to commit and ultimately we, the makers, only have our own feedback and critical skill to judge the project on while we're making it - so in startup terms, you are stuck with a very high burn rate, and you have to deliver a lot of (entertainment) functionality in your first release - you don't get to do a public beta, nor can you make any money by releasing a fabulous film that's only 5 minutes long. When people want to watch a movie, they're expecting 80 minutes minimum, and the bare minimum length of time/money to go from concept to delivery is 6 months and $25,000. You do hear bout people doing it for less...as part of a marketing campaign. No matter how passionate you are or how fast you work, writing, editing and shooting take up time during which you still need food, a place to sleep and a moderately fast computer. In short, we lie about these things in a desperate attempt to engage your attention :-) If you begin with a decent-sized budget, then you can presell into overseas markets, but to do so you'll need famous names, which generally don't come cheap. On any size budget, you also have to invest a lot in marketing (like 50-60% of said budget for optimal results) so you can open well in theaters, because for most films, the theatrical release is not profitable. You only hear about the big grossers - and in any case, the bulk of that money stays with the theater owner. Most films lose money or barely break even at the box office. The dirty secret of the movie business (for those thinking of getting into it) is that the theatrical release is just a giant advert for the DVD. You spend this huge amount of money on marketing in order to establish your film in the public mind as 'a real movie', and to provide a moment of recognition when they see your DVD available for rent or purchase - 'oh yeah, I never went to see that! What the hell, I'll watch it now'. It's incredibly hard to get people to even rent your film if they've never heard of it or seen an advert for it. And all that goes times ten for getting people to buy it, which is where you have the potential to make some decent profit. If that isn't there, then investors are less likely to put money into films because the (significantly high) risk isn't justified by the (comparatively low) rental profits, unless the film is a relatively sure thing due to the combination of spectacle and star power - but as people often complain, such films tend toward the bland, with obvious stories and pg-13 ratings. I have to say I'm rather with Warner Brothers on this one, and hope the other studios back them up. Partly because I can see benefits as a film consumer in studios having a more stable profit model, but also because as an indie filmmaker, a 28 day DVD sales window at least gives up-and-coming filmmakers a month to sit on shelves and be seen by consumers, who might later spend money on renting the film because the title is vaguely familiar from a previous visit to a store. Excuse the rambling explanation. I just get irritated by people like this TechCrunch writer who have no idea wht goes into making and selling a film and seems to think they pop out of a machine like bubblegum.
nfnaaron 17y ago
I don't understand the anguish over a 28 day delay. Actually I don't even understand the interest, beyond how it relates to the eventual take-over by streaming. You had a chance to see the movie in theaters. You either saw it or you didn't. The DVD comes out for sale. You either buy it or you don't. 28 days later the movie is available for rental, however long after the theatrical release. It just increases the wait time from the theatrical release by 28 days. ? By the author's own definition, if you're renting at all instead of buying, it's crap. It's OK to wait 28 more days for crap. I may have even said this to my 12 year old in another context. It's an amazing amount of text for such a trivial issue. What am I missing? [Edit: added 2nd to last paragraph; the "crap" paragraph.]
- akeefer 17y ago
  I totally agree . . . I really don't pay any attention to DVD for-sale dates, and only pay attention to the date it's available according to my Netflix queue. It's already the case that the time from theatrical release to DVD seems to vary pretty widely and arbitrarily between films, so an extra 28 day delay wouldn't register on my radar in the slightest. If I hadn't read about this deal, I never would have noticed any sort of delay.
  - anigbrowl 17y ago
    The variation is a function of how well the film does on release. The faster it goes to DVD, the less it has made at the box office. There isn't an exact formula but there are a lot of rules-of-thumb. For example, the best time to launch a horror movie is in early October (because of Halloween), and then you'll get it to DVD pronto because most horror movies have a short shelf life so you want the fans to buy it for themselves for Christmas. Animations and action thrillers are timed for summer and winter holidays. Screwball comedies are timed for spring break (youth) or thanksgiving (romantic). Arty dramas release near Christmas partly because of holiday viewers but also to meet the deadline for consideration during the q1 awards season without spending too much on pre-marketing; the DVD will be held back until after the nominations and awards ceremonies have taken place, because an Oscar or a Golden Globe will increase sales. The film sales markets (where producers sell to distributors) also take place in Q1, so if your goal is to make the hit horror for 2011 you start planning now to shoot in summer so you can be done editing by fall and sell it in winter so you can market it during summer for people to see during fall and buy during winter. Whew!
dangrover 17y ago
Ah, okay, so during those 28 days, people who don't want to go out to the store and buy a DVD of the movie will simply torrent it.
- TrevorBramble 17y ago
  It's amazing to me that big media still doesn't understand that competing on convenience is how they will turn casual thieves into happy customers. Making your products as easy or easier to consume by legal means than not is how to win.
  - houseabsolute 17y ago
    Seems to me like they probably did some kind of cost-benefit calculation that factored this in. They probably looked at it and said, "Rentals of DVDs that might otherwise have been bought are hurting us more than piracy that could be avoided by the earlier rentals." And, given how few pirates are likely to ever be paying customers (as piracy advocates frequently trumpet when studios issue bloated piracy cost numbers), I can see how this analysis might turn out to favor their current course of action.
    - pyre 17y ago
      > And, given how few pirates are likely to ever be paying customers (as piracy advocates frequently trumpet when studios issue bloated piracy cost numbers) The argument is more of "1 download != 1 lost sale" because I can download and watch more movies for free than I could afford to watch at all but the lowest of prices. And even then "1 download != 1 watched movie" because I might be someone that is compulsively downloading as much as I can. In that case, the amount of movies that I can download is only limited by the bandwidth available to me (and the access to downloadable pirated movies). I could easily be downloading more movies than I could afford to buy/rent at any price. Therefore saying that each movie I've download is a 'lost sale' is disingenuous because converting me to a paying customer would only net you a revenue for a fraction of the amount of movies I've downloaded. The people that are compulsively 'hoarding' movies are not likely to become paying customers, but what percentage of downloaders/pirates are they? The studios don't have the answers to these questions as much as they might like to seem like they do. They only trot out the raw numbers for shock value, though I wager that behind closed doors they might have a better understanding that these numbers are bunk.
Micand 17y ago
iTunes proved that people are willing to pay rather than pirate if you make purchasing more convenient than pirating. The movie studios seem almost to be begging their customers to steal content.
jsz0 17y ago
"More importantly, they’ll have more streaming rights for the content from these studios under this deal." 28 days is a small price to pay for an improved streaming selection. Especially with Warner Brothers who has a massive catalog of titles. If you're not seeing it in the theater, not buying the DVD, chances are you really don't absolutely need to see it in the first 28 days either. Pretty good deal by Netflix.
- _pius 17y ago
  28 days is a small price to pay for an improved streaming selection. The claim of "improved streaming selection" hasn't been elaborated on or even substantiated anywhere that I've seen. Even if it were, I'd still disagree. Now my Netflix account is no longer sufficient to handle all of my DVD rental needs and I have to go to one of their competitors to fill that gap. It's a real shame and a major ding to one of the few services that I considered practically perfect (on the physical DVD side) and improving (on the streaming side) every year.
- ghshephard 17y ago
  On the flip side - this just opened up a _huge_ opportunity for a Netflix competitor to start offering DVDs that are recently released but not available from Netflix. People like new things. Netflix will no longer be offering new things. That smells like market opportunity to me.
  - anigbrowl 17y ago
    As I said to pg, if the studios don't want to sell to Netflix because it would cannibalize their DVD sales, what makes you think they'd want to sell to 'newflix'? If you try buying films and renting them out on the first day of the DVD release, you'll get slammed for copyright violation about 5 minutes after you ship to your first rental customer. Consumer DVDs are not licensed for public performance or rental.
    - elq 17y ago
      simply not true - http://en.wikipedia.org/wiki/First-sale_doctrine http://en.wikipedia.org/wiki/First-sale_doctrine
vaporstun 17y ago
I'd gladly trade 28-days on new releases for more streaming content. With Watch Instantly on Netflix, I rarely bother with physical media anymore.
- jrockway 17y ago
  With Bittorrent and Usenet, I rarely bother with Netflix Instant anymore.
  - ja30278 17y ago
    sshhh..remember the first rule of usenet
gte910h 17y ago
"More importantly, they’ll have more streaming rights for the content from these studios under this deal. This is the key." Um, I'm not currently a netflix customer because of how small their streaming selection is. I'm going to say, the fact you can't get new releases anyway ("long wait"), means they're basically vastly increasing their offering of streamed movies....something they have unlimited capacity to do, while decreasing a service that sucked anyhow and was virtually useless. I don't see why they're doing something bad here.
fjabre 17y ago
Netflix's on-demand selection does need drastic improvement.. One can find some gems here and there but overall it doesn't touch their DVD selection and we all know that's b/c of the studios. Yes it is too much work to walk down to my mailbox and wait 2 days for my damn DVD when the technology is there to deliver it straight to my TV in seconds. Of course this all would have to come at a price but I would gladly pay 20 or 30 and possibly even 40 bucks a month to have unlimited access to their full DVD collection on-demand. Shelling out 20 bucks for something you'll end up watching once or twice 95% of the time is throwing away your money. So until they (the studios) stop attempting to rip us off like the greedy bastards we know they are then I'll get the new releases elsewhere for free. There is an ideal price to be set on the curve where everyone wins it's just that the aging execs in charge can't change fast enough to keep pace with their consumers changing preferences. Time to get someone new in charge..
- boredguy8 17y ago
  "Of course this all would have to come at a price but I would gladly pay 20 or 30 and possibly even 40 bucks a month to have unlimited access to their full DVD collection on-demand." Ditto. If I were WB or Fox, I'd work out a deal with NetFlix to provide this 'premium' content SOONER than the DVD release, or I'd be hard at work developing my own CDN.
- akeefer 17y ago
  Keep in mind that it's not just because of the studios: it's also because of the various TV networks that the studios have signed exclusive re-broadcast deals with. That's why Netflix sublicensed the Starz's rebroadcast rights, and why those movies rotate in and out of being available to play on demand (since the rebroadcast rights are all windowed to specific periods of time, with different broadcasters getting the rights at different points in time). So it's all a very complicated problem. Movies that already have the rebroadcast rights sold off would be tough without the sort of cross-licensing Netflix does with Starz; the studios don't really have further control until those deals expire, since they're legally-binding, exclusive contracts. Rentals don't conflict with those exclusive rights, which is why the studios can license Amazon or iTunes to offer the movies for a fee, but can't license Netflix to stream them. What they could do is to stop doing those sorts of exclusive deals, but those deals bring in a fair amount of money, so someone like Netflix would need to pony up enough cash on their end to make up for the loss of revenue that would come with either the total loss of those broadcast deals or with the loss of exclusivity on those broadcast deals. But I'm sure that even renegotiating non-exclusive contracts to use in the future deals with existing broadcasters would take a pretty long time once they've decided to do it; those sorts of legal maneuverings take a long time. So certainly the studios could start trying to do something about it, but it's not a simple problem that they could just change their minds about and make go away instantly.
boredguy8 17y ago
I was trying to think of the properly inflammatory headline when I submitted http://arstechnica.com/media/news/2010/01/netflix-and-warner-bros-have.ars http://arstechnica.com/media/news/2010/01/netflix-and-warner... (a far better writeup). I should leave it to pros like TechCrunch.
robryan 17y ago
For me, not that I use netflix, the 28 days doesn't seem like that big of a deal to me. If I really want to see a new release it will be in the cinema which is a much better viewing experience unless you happen to have an expensive home theater, if I didn't see something while I was at the cinema your already waiting a couple of months, I just couldn't see to many situations where I have no interest in the movie at the cinema but could wait the extra 28 days. I don't know if this increases piracy because most of the time you will be able to get a DVD quality download before it's even been released to rent and buy.

29 points by Flemlord 17y ago

pg 17y ago

This could be an opening for a startup.

ivankirigin 17y ago
This wasn't a mistake. They are hurting immediate releases to increase their ability to stream movies. The latter is the future. I've paid money to stream a movie I can rent on netflix. The experience is so much better, even with DRM which only lets you watch once. Netflix lets you watch many times. We need to move to a future where people can pay to watch the movie on their TV instead of paying to get a ticket at a theatre. Then we need to enable subscription pricing for movies that aren't new releases.
- deleted 17y ago
  [deleted]
- anigbrowl 17y ago
  We need to move to a future where people can pay to watch the movie on their TV instead of paying to get a ticket at a theatre. Eeek - no thanks! I'd like a future were we can do the former as easily as the latter - but absolutely not instead. I have a number of reasons for this: 1. I love watching a movie in the theater. I know, adverts, overpriced popcorn, sometimes the person in front is too tall or the person in back keeps whispering, but I like sitting in the middle of a crowd that gasps or laughs in unison, and I particularly like seeing the film on a creen bigger than my house... 2. ...because when we make movies, we at least try to have them look good that way. It's supposed to be all-enveloping and ridiculously bigger than life. TV diminishes movies: reducing them in size robs them of much emotional impact. And it is our big fat emotions which we wish to impose upon - er, share with you, the viewers. 3. if you've made a film and got it into an important festival (the kind that buyers show up to, rather than just film buffs), then the reaction of a full-size audience sells the film better than any private screening possibly could. So it's more likely to sell, and for more money. And we crave your money almost as much as we crave your adulation. More, in some cases. 4. Seriously, we need the money. People have this image of the film business as being full of greedy executives and pouty stars, but that's like saying everyone in the software industry is like Steve Ballmer or Larry Ellison. The vast majority of people make a much more modest living. If you want to make your own films, that's pretty expensive so you usually have to beg other people to lend you the money. 5. If you're not in a festival but you know what you're doing, you can rent a theater relatively cheaply and screen your film there. For some kinds of material this can be an effective sales strategy - and it may be much faster and cheaper than trying to persuade a distributor by renting a tiny stand at a film market... 6. ...and you need a distributor, because it's bloody hard to get your movie into Netflix's catalog otherwise, and Netflix is the 800 lb gorilla of DVD rental. You can also put a movie on iTunes, but it turns out that not that many people want to rent their movies that way and I'm told by distributors that having your film there isn't worth nearly as much as on Netflix. 7. Of course you can self-distribute, but it's very hard to make money this way. You could give it away free on the net, but your return on paypal donations will be pretty minimal. I very much liked the idea of TipJoy, but as you found yourself it's hard to build a business model around micropayments. It's even harder if you're trying to share revenue with a CDN that can offer decent streaming. Don't get me wrong, I'm all in favor of streaming and other methods of web delivery. In some senses it's easier to market your film than ever. But as film becomes more of an on-demand commodity rather than something people get up and go to (as in theaters), building a revenue model becomes very tricky. It's far cheaper than it used to be to make a film, thanks to technology, but it's still a tremendous amount of work, and as I said elsewhere you can't iterate - when someone decides to watch a movie, they want a finished product that runs for 80+ minutes, and that's quite a bit of work to put together.
jcl 17y ago
You mean, to offer movies for rent earlier than Netflix? Isn't that what RedBox is doing?
- anigbrowl 17y ago
  Not exactly, although that's what they['d like to be doing - only the distributors are currently refusing to sell to them if they do that, unless they agree to raise the price of new releases. http://www.videobusiness.com/article/CA6676220.html http://www.videobusiness.com/article/CA6676220.html
anigbrowl 17y ago
I seriously doubt it, Paul. DVDs bought by consumers are saddled with extremely restrictive license terms. When Netflix or any other rental business buys DVDs, they don't just buy the same copy you and I do, but a rental version with different licensing terms which costs considerably more - I forget how much, but I think's around $80 per disc, though that's probably gone down somewhat. The content is (almost always) identical but the product code is different. How can you provide a rental service to people during the 28-day DVD sales window without breaking the license terms? That's basically pay-per-view, and PPV is dead from the distributor's standpoint, there is almost no money in it now. Part of the problem (for the distributors) is not that netflix rents to everyone, but that they don't charge any late fees. for years the video business made profit in 2 ways: new hit films that everyone wanted to watch but couldn't buy yet, and late fees - both of which subsidized all the other movies that didn't attract such a big audience but still took up shelf space. Well Netflix's business model depends on massive volume and warehousing, and it turns out consumers are willing to wait the 2-3 days required for postal transfer. And since there's no late fees, if there's a movie you really love you could just keep it out for a month and watch it 20 times until you're sick of it, whereas previously you'd rent it, go crazy about it, and then buy the DVD because that was much more economical than keeping it or wasting time at the video store waiting for it to go back on the shelf so you could rent it again. So the problem is not that most movies are crap, because only a very small number of movies appeal to almost everybody; most people only like a narrow range of genres and actors and find others uninteresting. Furthermore, we've only been able to rent videos/DVDs for about a single generation; before that the only way to see great old movies was in art theaters and on TV. Now you can fit the 100 greatest movies of all time onto an IPod, goddamn. It's easy to be sniffy about what's on at the theater when you can hire a comfy chair for the price of a few lattes and pull a century of movie greats out of your pocket or laptop bag. Obviously the answer is 'make something awesome' and people will throw money at you. But this is quite hard to do. I'm in the middle of making a somewhat awesome little movie right now (today is a day off) and we're doing it in a very hacker-ish way with a tiny budget in the 5 figure range. But in the movie business you can't iterate, you have to commit and ultimately we, the makers, only have our own feedback and critical skill to judge the project on while we're making it - so in startup terms, you are stuck with a very high burn rate, and you have to deliver a lot of (entertainment) functionality in your first release - you don't get to do a public beta, nor can you make any money by releasing a fabulous film that's only 5 minutes long. When people want to watch a movie, they're expecting 80 minutes minimum, and the bare minimum length of time/money to go from concept to delivery is 6 months and $25,000. You do hear bout people doing it for less...as part of a marketing campaign. No matter how passionate you are or how fast you work, writing, editing and shooting take up time during which you still need food, a place to sleep and a moderately fast computer. In short, we lie about these things in a desperate attempt to engage your attention :-) If you begin with a decent-sized budget, then you can presell into overseas markets, but to do so you'll need famous names, which generally don't come cheap. On any size budget, you also have to invest a lot in marketing (like 50-60% of said budget for optimal results) so you can open well in theaters, because for most films, the theatrical release is not profitable. You only hear about the big grossers - and in any case, the bulk of that money stays with the theater owner. Most films lose money or barely break even at the box office. The dirty secret of the movie business (for those thinking of getting into it) is that the theatrical release is just a giant advert for the DVD. You spend this huge amount of money on marketing in order to establish your film in the public mind as 'a real movie', and to provide a moment of recognition when they see your DVD available for rent or purchase - 'oh yeah, I never went to see that! What the hell, I'll watch it now'. It's incredibly hard to get people to even rent your film if they've never heard of it or seen an advert for it. And all that goes times ten for getting people to buy it, which is where you have the potential to make some decent profit. If that isn't there, then investors are less likely to put money into films because the (significantly high) risk isn't justified by the (comparatively low) rental profits, unless the film is a relatively sure thing due to the combination of spectacle and star power - but as people often complain, such films tend toward the bland, with obvious stories and pg-13 ratings. I have to say I'm rather with Warner Brothers on this one, and hope the other studios back them up. Partly because I can see benefits as a film consumer in studios having a more stable profit model, but also because as an indie filmmaker, a 28 day DVD sales window at least gives up-and-coming filmmakers a month to sit on shelves and be seen by consumers, who might later spend money on renting the film because the title is vaguely familiar from a previous visit to a store. Excuse the rambling explanation. I just get irritated by people like this TechCrunch writer who have no idea wht goes into making and selling a film and seems to think they pop out of a machine like bubblegum.

nfnaaron 17y ago

I don't understand the anguish over a 28 day delay. Actually I don't even understand the interest, beyond how it relates to the eventual take-over by streaming. You had a chance to see the movie in theaters. You either saw it or you didn't. The DVD comes out for sale. You either buy it or you don't. 28 days later the movie is available for rental, however long after the theatrical release. It just increases the wait time from the theatrical release by 28 days. ? By the author's own definition, if you're renting at all instead of buying, it's crap. It's OK to wait 28 more days for crap. I may have even said this to my 12 year old in another context. It's an amazing amount of text for such a trivial issue. What am I missing? [Edit: added 2nd to last paragraph; the "crap" paragraph.]

akeefer 17y ago
I totally agree . . . I really don't pay any attention to DVD for-sale dates, and only pay attention to the date it's available according to my Netflix queue. It's already the case that the time from theatrical release to DVD seems to vary pretty widely and arbitrarily between films, so an extra 28 day delay wouldn't register on my radar in the slightest. If I hadn't read about this deal, I never would have noticed any sort of delay.
- anigbrowl 17y ago
  The variation is a function of how well the film does on release. The faster it goes to DVD, the less it has made at the box office. There isn't an exact formula but there are a lot of rules-of-thumb. For example, the best time to launch a horror movie is in early October (because of Halloween), and then you'll get it to DVD pronto because most horror movies have a short shelf life so you want the fans to buy it for themselves for Christmas. Animations and action thrillers are timed for summer and winter holidays. Screwball comedies are timed for spring break (youth) or thanksgiving (romantic). Arty dramas release near Christmas partly because of holiday viewers but also to meet the deadline for consideration during the q1 awards season without spending too much on pre-marketing; the DVD will be held back until after the nominations and awards ceremonies have taken place, because an Oscar or a Golden Globe will increase sales. The film sales markets (where producers sell to distributors) also take place in Q1, so if your goal is to make the hit horror for 2011 you start planning now to shoot in summer so you can be done editing by fall and sell it in winter so you can market it during summer for people to see during fall and buy during winter. Whew!

dangrover 17y ago

Ah, okay, so during those 28 days, people who don't want to go out to the store and buy a DVD of the movie will simply torrent it.

TrevorBramble 17y ago
It's amazing to me that big media still doesn't understand that competing on convenience is how they will turn casual thieves into happy customers. Making your products as easy or easier to consume by legal means than not is how to win.
- houseabsolute 17y ago
  Seems to me like they probably did some kind of cost-benefit calculation that factored this in. They probably looked at it and said, "Rentals of DVDs that might otherwise have been bought are hurting us more than piracy that could be avoided by the earlier rentals." And, given how few pirates are likely to ever be paying customers (as piracy advocates frequently trumpet when studios issue bloated piracy cost numbers), I can see how this analysis might turn out to favor their current course of action.
  - pyre 17y ago
    > And, given how few pirates are likely to ever be paying customers (as piracy advocates frequently trumpet when studios issue bloated piracy cost numbers) The argument is more of "1 download != 1 lost sale" because I can download and watch more movies for free than I could afford to watch at all but the lowest of prices. And even then "1 download != 1 watched movie" because I might be someone that is compulsively downloading as much as I can. In that case, the amount of movies that I can download is only limited by the bandwidth available to me (and the access to downloadable pirated movies). I could easily be downloading more movies than I could afford to buy/rent at any price. Therefore saying that each movie I've download is a 'lost sale' is disingenuous because converting me to a paying customer would only net you a revenue for a fraction of the amount of movies I've downloaded. The people that are compulsively 'hoarding' movies are not likely to become paying customers, but what percentage of downloaders/pirates are they? The studios don't have the answers to these questions as much as they might like to seem like they do. They only trot out the raw numbers for shock value, though I wager that behind closed doors they might have a better understanding that these numbers are bunk.

Micand 17y ago

iTunes proved that people are willing to pay rather than pirate if you make purchasing more convenient than pirating. The movie studios seem almost to be begging their customers to steal content.

jsz0 17y ago

"More importantly, they’ll have more streaming rights for the content from these studios under this deal." 28 days is a small price to pay for an improved streaming selection. Especially with Warner Brothers who has a massive catalog of titles. If you're not seeing it in the theater, not buying the DVD, chances are you really don't absolutely need to see it in the first 28 days either. Pretty good deal by Netflix.

_pius 17y ago
28 days is a small price to pay for an improved streaming selection. The claim of "improved streaming selection" hasn't been elaborated on or even substantiated anywhere that I've seen. Even if it were, I'd still disagree. Now my Netflix account is no longer sufficient to handle all of my DVD rental needs and I have to go to one of their competitors to fill that gap. It's a real shame and a major ding to one of the few services that I considered practically perfect (on the physical DVD side) and improving (on the streaming side) every year.
ghshephard 17y ago
On the flip side - this just opened up a _huge_ opportunity for a Netflix competitor to start offering DVDs that are recently released but not available from Netflix. People like new things. Netflix will no longer be offering new things. That smells like market opportunity to me.
- anigbrowl 17y ago
  As I said to pg, if the studios don't want to sell to Netflix because it would cannibalize their DVD sales, what makes you think they'd want to sell to 'newflix'? If you try buying films and renting them out on the first day of the DVD release, you'll get slammed for copyright violation about 5 minutes after you ship to your first rental customer. Consumer DVDs are not licensed for public performance or rental.
  - elq 17y ago
    simply not true - http://en.wikipedia.org/wiki/First-sale_doctrine http://en.wikipedia.org/wiki/First-sale_doctrine

vaporstun 17y ago

I'd gladly trade 28-days on new releases for more streaming content. With Watch Instantly on Netflix, I rarely bother with physical media anymore.

jrockway 17y ago
With Bittorrent and Usenet, I rarely bother with Netflix Instant anymore.
- ja30278 17y ago
  sshhh..remember the first rule of usenet

gte910h 17y ago

"More importantly, they’ll have more streaming rights for the content from these studios under this deal. This is the key." Um, I'm not currently a netflix customer because of how small their streaming selection is. I'm going to say, the fact you can't get new releases anyway ("long wait"), means they're basically vastly increasing their offering of streamed movies....something they have unlimited capacity to do, while decreasing a service that sucked anyhow and was virtually useless. I don't see why they're doing something bad here.

fjabre 17y ago

Netflix's on-demand selection does need drastic improvement.. One can find some gems here and there but overall it doesn't touch their DVD selection and we all know that's b/c of the studios. Yes it is too much work to walk down to my mailbox and wait 2 days for my damn DVD when the technology is there to deliver it straight to my TV in seconds. Of course this all would have to come at a price but I would gladly pay 20 or 30 and possibly even 40 bucks a month to have unlimited access to their full DVD collection on-demand. Shelling out 20 bucks for something you'll end up watching once or twice 95% of the time is throwing away your money. So until they (the studios) stop attempting to rip us off like the greedy bastards we know they are then I'll get the new releases elsewhere for free. There is an ideal price to be set on the curve where everyone wins it's just that the aging execs in charge can't change fast enough to keep pace with their consumers changing preferences. Time to get someone new in charge..

boredguy8 17y ago
"Of course this all would have to come at a price but I would gladly pay 20 or 30 and possibly even 40 bucks a month to have unlimited access to their full DVD collection on-demand." Ditto. If I were WB or Fox, I'd work out a deal with NetFlix to provide this 'premium' content SOONER than the DVD release, or I'd be hard at work developing my own CDN.
akeefer 17y ago
Keep in mind that it's not just because of the studios: it's also because of the various TV networks that the studios have signed exclusive re-broadcast deals with. That's why Netflix sublicensed the Starz's rebroadcast rights, and why those movies rotate in and out of being available to play on demand (since the rebroadcast rights are all windowed to specific periods of time, with different broadcasters getting the rights at different points in time). So it's all a very complicated problem. Movies that already have the rebroadcast rights sold off would be tough without the sort of cross-licensing Netflix does with Starz; the studios don't really have further control until those deals expire, since they're legally-binding, exclusive contracts. Rentals don't conflict with those exclusive rights, which is why the studios can license Amazon or iTunes to offer the movies for a fee, but can't license Netflix to stream them. What they could do is to stop doing those sorts of exclusive deals, but those deals bring in a fair amount of money, so someone like Netflix would need to pony up enough cash on their end to make up for the loss of revenue that would come with either the total loss of those broadcast deals or with the loss of exclusivity on those broadcast deals. But I'm sure that even renegotiating non-exclusive contracts to use in the future deals with existing broadcasters would take a pretty long time once they've decided to do it; those sorts of legal maneuverings take a long time. So certainly the studios could start trying to do something about it, but it's not a simple problem that they could just change their minds about and make go away instantly.

boredguy8 17y ago

I was trying to think of the properly inflammatory headline when I submitted http://arstechnica.com/media/news/2010/01/netflix-and-warner-bros-have.ars http://arstechnica.com/media/news/2010/01/netflix-and-warner... (a far better writeup). I should leave it to pros like TechCrunch.

robryan 17y ago

For me, not that I use netflix, the 28 days doesn't seem like that big of a deal to me. If I really want to see a new release it will be in the cinema which is a much better viewing experience unless you happen to have an expensive home theater, if I didn't see something while I was at the cinema your already waiting a couple of months, I just couldn't see to many situations where I have no interest in the movie at the cinema but could wait the extra 28 days. I don't know if this increases piracy because most of the time you will be able to get a DVD quality download before it's even been released to rent and buy.