3 ms·

I'm pretty sure that's not true - most normal DVDs/BluRays come with a "not for rental" text somewhere and you can't legally rent them. Distributors sell differ

I'm pretty sure that's not true - most normal DVDs/BluRays come with a "not for rental" text somewhere and you can't legally rent them. Distributors sell different copies of discs which specifically are for the rental market and which come with a different licence.

MisterBastahrd 4y ago
I'm almost positive that Netflix had a licensing agreement to print as many discs as they needed after a while. After the first few years, the number of "branded" discs with the silkscreened movie logos dropped dramatically.
- CobrastanJorji 4y ago
  Sure, but that's because the threat of "just buying originals" existed. Publishers had to choose from "be paid some money, and Netflix gets a deal on copies of movies," or "be paid zero money, and Netflix pays extra to scrounge up copies of those movies from somebody else." Netflix (and movie viewers) get what they want either way, so the publisher can't just hold firm on a high price or block distribution of the film.
  - deleted 4y ago
    [deleted]
  - MisterBastahrd 4y ago
    Licensing deals are a great way to get around contract items that include volumes of "sold copies." Netflix didn't exactly have them over a barrel. It was a good deal for both parties.
- jandrewrogers 4y ago
  Yes, that change happened early on. They could print DVDs on demand at negligible cost to Netflix and in return the studios received a fixed fee per rental instead of a fixed fee per DVD. A major problem was the high breakage rate for the DVDs they were renting. This created issues with the supply chain of new DVDs to replace broken ones since DVDs are not considered continuously consumed, disposable products. Additionally, it made it easier to manage the bursty nature of demand for particular DVDs since you no longer had to optimize the economics around the number of rentals per physical DVD.
- filmgirlcw 4y ago
  Well, the studios never really had a problem with Netflix as a DVD rental company and were usually happy to supply them discs. Netflix's pricing model didn't cut into the immense profit studios were starting to see from the home entertainment boom (which was tied to DVD as a medium) and if anything, they had a massive bulk buyer. Plus, for the first five or six years, Netflix was way smaller than the Blockbuster. Studios knew that if The Matrix or Lord of the Rings or Star Wars Episode 1 or whatever was released and people wanted to watch it immediately, they would buy it rather than waiting for it to be available from Netflix (or Blockbuster or Hollywood Video). Meanwhile, they could use Netflix as a longtail way to sell bulk discs of titles that might not do tremendous retail numbers. Plus, as fast as Netflix was, there was still a delay of a few days between requesting a movie and getting it or returning one and getting another. For a new release, you'd be just as likely to try to buy it if you absolutely had to see it that weekend. It was Redbox that got the studios on the ropes. Not only were home entertainment revenues dropping because of over-saturation, a bad economy, and burgeoning digital rental options -- and these were revenues the studios had started to rely on and build into their budget forecasting for films that would often only become profitable after a successful home release -- being able to get a new release for $1 from a kiosk (a kiosk that can store 500 copies and might be loaded up with just the top X new releases) and then returned and re-rented within 24 hours, that was a problem. Because now I don't have to pay $15 for that movie I'm not sure I'll ever watch again and that will clutter up the living room, I can just drive up to the grocery store or the gas station or whatever and grab a disc and go. And a website will tell me where the disc is available if it's out at the place up the street. And it's $1 and I can just return it right after I watch it. $1 rentals was a threat, but Netflix never had that pricing. They were like $7.99 for one out at a time and then it would go up from there. But the studios didn't have a problem with Netflix and in the early years, were probably able to get better terms (for the studio) with them on bulk purchases than they had with Blockbuster. Studios didn't start to have to grapple with Netflix until Netflix signed its landmark deal with Starz, allowing it to stream Starz's catalog of content (there was no provision in the Starz contract with studios that disallowed offering a digital streaming option -- future contracts obviously added those clauses but that would take several years to expire), thus truly making good on Reed Hasting's vision of having the internet deliver movies. And even then, the relationship was adversarial but also somewhat necessary from both sides, because Netflix needed to license content for its library, and studios needed that sweet licensing revenue (at least before Netflix started to create its own content that competed directly against the studios).
mejutoco 4y ago
But reselling is always allowed. I wonder where the legal line is between renting and selling back and forth.
- gambiting 4y ago
  The way the law works is that intent matters more than the actual written word. Even if the law explicitly says "renting needs a licence but resale is fine" you wouldn't get away with a "loophole" of saying "ok you're really buying a disc from us for $10 and then we buy it back from you after a week for $5" because it's clear that you're just doing renting with extra steps. It wouldn't survive any judicial scrutiny.
  - RajT88 4y ago
    Indeed. This is why there's a fight to pack judges of a certain ideological bent into judiciaries. To use a Non-US example of the judiciary looking the other way because the letter of the law is satisfied, but not the intent: https://www.mei.edu/publications/temporary-marriage-iran-and-womens-rights https://www.mei.edu/publications/temporary-marriage-iran-and...
  - deleted 4y ago
    [deleted]
- arcbyte 4y ago
  Intent is the legal line for netflix.
- phamilton 4y ago
  VidAngel tried this. They sold movies for $20, bought them back for $19 when you were done, and then streamed the video to you in the meantime. $1 streaming video rentals, for movies that weren't available anywhere online. It did not last long.
  - gjsman-1000 4y ago
    Their main problem, IIRC, was that they broke DMCA 1201 to crack the encryption on the disc, edit the contents of the movie, and then stream the movie back to the customer; unless the customer requested the disc back. It wasn't the buying and reselling. It was the editing and digital lock picking.
reaperman 4y ago
That feels like a situation that would only affect the "first sale" at most. Unless you sign a contract to that effect, I don't think it holds. Book publishers tried this with "Only for sale outside the USA" but Supreme Court shot that down.
gjsman-1000 4y ago
Not true, they are legally rentable for profit without a contract. Redbox has stated on the record that they have done it sometimes when there were tense moments with movie studios. Blockbuster used similar provisions. It's called the First Sale Doctrine which applies to all physical products, but not necessarily digital products. It is, however, not legal to rent CDs in the US. Because the US is weird.
deleted 4y ago
[deleted]
filmgirlcw 4y ago
That's not true in the US. This was true in the VHS days, where home video and rental releases were separate, but in DVD and Blu-rays, there has never been a distinction. First sale doctrine means you can't limit what someone else does with the product. They can rent it out or resell it. However, studios would only release a limited amount of product on "home video," priced at $19.95 or whatever, versus the $89.95 or higher list price for films that were only available through distributors as "rental" copies. I remember as a kid sometimes getting the local video store to order me a copy of a tape that I would then pay full price for because it wasn't available otherwise (more often than not, this was what two VCRs were for, but I digress). That changed with DVD, where the studios stopped differentiating and went direct-to-consumer. The proliferation of DVDs without the need for a distinction between home video and rental is part of what led to the decline of video stores (in addition to the real threat, which of course was streaming) because consumers could buy their own movie collections instead of renting them for $5 for 2 nights or whatever Blockbuster used to charge. I became an avid DVD collector as a teenager in the peak DVD era (1999-2003) and a combination of unsustainable online stores (many that were dead by 2001) selling DVDs at rock-bottom prices (even during release week) and Blockbuster's lackluster selection led to me getting a Netflix account in 1999 (thanks, mom, for the credit card!) and then building my own collection of what would become thousands of titles, rather than rely on the chains. I still have a great affinity for local video stores and support my OG hometown video store (Videodrome in Atlanta) and Scarecrow Video in Seattle, b/c curation is key. Now, when the DVD boom flatlined in the late 2000s, three of the major studios refused to sell directly to Redbox until 28 days after a tentpole got a home video release because they worried about kiosk rentals cutting into their home video revenues (which at this point, had often started to overtake or match theatrical revenue), but Redbox got around that by just buying through other distributors or buying out Walmart, Best Buy and Costco stock. They also sued the studios that were refusing to sell to them directly. The reason the studios went against Redbox was because Redbox undercut them by offering rentals for $1 a day and most people (obviously not me), stopped collecting movies. But again, the first sale doctrine means that they can't require anyone to buy a different version. This is the same with book publishers. They try to strongarm libraries into buying library copies of physical books but the truth is, if a library needs a book or needs more copies, they can buy them from Amazon or a bulk distributor all the same.
goosedragons 4y ago
I think it depends on the country. My Japanese discs have レンタル禁止 (rental forbidden). My North American discs do not. European discs seem to have "Not for rental".
hiatus 4y ago
Sounds like "do not copy" text on keys that are not meant to be duplicated.
scarface74 4y ago
Redbox probably had a specific agreement with the DVD creator to buy in bulk at a discount. You are free as a business to have special terms that restrict your rights when you buy from a vendor
prmoustache 4y ago
The fact they are labelled in a way do not mean they can legally enforce that.

MisterBastahrd 4y ago

I'm almost positive that Netflix had a licensing agreement to print as many discs as they needed after a while. After the first few years, the number of "branded" discs with the silkscreened movie logos dropped dramatically.

CobrastanJorji 4y ago
Sure, but that's because the threat of "just buying originals" existed. Publishers had to choose from "be paid some money, and Netflix gets a deal on copies of movies," or "be paid zero money, and Netflix pays extra to scrounge up copies of those movies from somebody else." Netflix (and movie viewers) get what they want either way, so the publisher can't just hold firm on a high price or block distribution of the film.
- deleted 4y ago
  [deleted]
- MisterBastahrd 4y ago
  Licensing deals are a great way to get around contract items that include volumes of "sold copies." Netflix didn't exactly have them over a barrel. It was a good deal for both parties.
jandrewrogers 4y ago
Yes, that change happened early on. They could print DVDs on demand at negligible cost to Netflix and in return the studios received a fixed fee per rental instead of a fixed fee per DVD. A major problem was the high breakage rate for the DVDs they were renting. This created issues with the supply chain of new DVDs to replace broken ones since DVDs are not considered continuously consumed, disposable products. Additionally, it made it easier to manage the bursty nature of demand for particular DVDs since you no longer had to optimize the economics around the number of rentals per physical DVD.
filmgirlcw 4y ago
Well, the studios never really had a problem with Netflix as a DVD rental company and were usually happy to supply them discs. Netflix's pricing model didn't cut into the immense profit studios were starting to see from the home entertainment boom (which was tied to DVD as a medium) and if anything, they had a massive bulk buyer. Plus, for the first five or six years, Netflix was way smaller than the Blockbuster. Studios knew that if The Matrix or Lord of the Rings or Star Wars Episode 1 or whatever was released and people wanted to watch it immediately, they would buy it rather than waiting for it to be available from Netflix (or Blockbuster or Hollywood Video). Meanwhile, they could use Netflix as a longtail way to sell bulk discs of titles that might not do tremendous retail numbers. Plus, as fast as Netflix was, there was still a delay of a few days between requesting a movie and getting it or returning one and getting another. For a new release, you'd be just as likely to try to buy it if you absolutely had to see it that weekend. It was Redbox that got the studios on the ropes. Not only were home entertainment revenues dropping because of over-saturation, a bad economy, and burgeoning digital rental options -- and these were revenues the studios had started to rely on and build into their budget forecasting for films that would often only become profitable after a successful home release -- being able to get a new release for $1 from a kiosk (a kiosk that can store 500 copies and might be loaded up with just the top X new releases) and then returned and re-rented within 24 hours, that was a problem. Because now I don't have to pay $15 for that movie I'm not sure I'll ever watch again and that will clutter up the living room, I can just drive up to the grocery store or the gas station or whatever and grab a disc and go. And a website will tell me where the disc is available if it's out at the place up the street. And it's $1 and I can just return it right after I watch it. $1 rentals was a threat, but Netflix never had that pricing. They were like $7.99 for one out at a time and then it would go up from there. But the studios didn't have a problem with Netflix and in the early years, were probably able to get better terms (for the studio) with them on bulk purchases than they had with Blockbuster. Studios didn't start to have to grapple with Netflix until Netflix signed its landmark deal with Starz, allowing it to stream Starz's catalog of content (there was no provision in the Starz contract with studios that disallowed offering a digital streaming option -- future contracts obviously added those clauses but that would take several years to expire), thus truly making good on Reed Hasting's vision of having the internet deliver movies. And even then, the relationship was adversarial but also somewhat necessary from both sides, because Netflix needed to license content for its library, and studios needed that sweet licensing revenue (at least before Netflix started to create its own content that competed directly against the studios).

mejutoco 4y ago

But reselling is always allowed. I wonder where the legal line is between renting and selling back and forth.

gambiting 4y ago
The way the law works is that intent matters more than the actual written word. Even if the law explicitly says "renting needs a licence but resale is fine" you wouldn't get away with a "loophole" of saying "ok you're really buying a disc from us for $10 and then we buy it back from you after a week for $5" because it's clear that you're just doing renting with extra steps. It wouldn't survive any judicial scrutiny.
- RajT88 4y ago
  Indeed. This is why there's a fight to pack judges of a certain ideological bent into judiciaries. To use a Non-US example of the judiciary looking the other way because the letter of the law is satisfied, but not the intent: https://www.mei.edu/publications/temporary-marriage-iran-and-womens-rights https://www.mei.edu/publications/temporary-marriage-iran-and...
- deleted 4y ago
  [deleted]
arcbyte 4y ago
Intent is the legal line for netflix.
phamilton 4y ago
VidAngel tried this. They sold movies for $20, bought them back for $19 when you were done, and then streamed the video to you in the meantime. $1 streaming video rentals, for movies that weren't available anywhere online. It did not last long.
- gjsman-1000 4y ago
  Their main problem, IIRC, was that they broke DMCA 1201 to crack the encryption on the disc, edit the contents of the movie, and then stream the movie back to the customer; unless the customer requested the disc back. It wasn't the buying and reselling. It was the editing and digital lock picking.

reaperman 4y ago

That feels like a situation that would only affect the "first sale" at most. Unless you sign a contract to that effect, I don't think it holds. Book publishers tried this with "Only for sale outside the USA" but Supreme Court shot that down.

gjsman-1000 4y ago

Not true, they are legally rentable for profit without a contract. Redbox has stated on the record that they have done it sometimes when there were tense moments with movie studios. Blockbuster used similar provisions. It's called the First Sale Doctrine which applies to all physical products, but not necessarily digital products. It is, however, not legal to rent CDs in the US. Because the US is weird.

deleted 4y ago

[deleted]

filmgirlcw 4y ago

That's not true in the US. This was true in the VHS days, where home video and rental releases were separate, but in DVD and Blu-rays, there has never been a distinction. First sale doctrine means you can't limit what someone else does with the product. They can rent it out or resell it. However, studios would only release a limited amount of product on "home video," priced at $19.95 or whatever, versus the $89.95 or higher list price for films that were only available through distributors as "rental" copies. I remember as a kid sometimes getting the local video store to order me a copy of a tape that I would then pay full price for because it wasn't available otherwise (more often than not, this was what two VCRs were for, but I digress). That changed with DVD, where the studios stopped differentiating and went direct-to-consumer. The proliferation of DVDs without the need for a distinction between home video and rental is part of what led to the decline of video stores (in addition to the real threat, which of course was streaming) because consumers could buy their own movie collections instead of renting them for $5 for 2 nights or whatever Blockbuster used to charge. I became an avid DVD collector as a teenager in the peak DVD era (1999-2003) and a combination of unsustainable online stores (many that were dead by 2001) selling DVDs at rock-bottom prices (even during release week) and Blockbuster's lackluster selection led to me getting a Netflix account in 1999 (thanks, mom, for the credit card!) and then building my own collection of what would become thousands of titles, rather than rely on the chains. I still have a great affinity for local video stores and support my OG hometown video store (Videodrome in Atlanta) and Scarecrow Video in Seattle, b/c curation is key. Now, when the DVD boom flatlined in the late 2000s, three of the major studios refused to sell directly to Redbox until 28 days after a tentpole got a home video release because they worried about kiosk rentals cutting into their home video revenues (which at this point, had often started to overtake or match theatrical revenue), but Redbox got around that by just buying through other distributors or buying out Walmart, Best Buy and Costco stock. They also sued the studios that were refusing to sell to them directly. The reason the studios went against Redbox was because Redbox undercut them by offering rentals for $1 a day and most people (obviously not me), stopped collecting movies. But again, the first sale doctrine means that they can't require anyone to buy a different version. This is the same with book publishers. They try to strongarm libraries into buying library copies of physical books but the truth is, if a library needs a book or needs more copies, they can buy them from Amazon or a bulk distributor all the same.

goosedragons 4y ago

I think it depends on the country. My Japanese discs have レンタル禁止 (rental forbidden). My North American discs do not. European discs seem to have "Not for rental".

hiatus 4y ago

Sounds like "do not copy" text on keys that are not meant to be duplicated.

scarface74 4y ago

Redbox probably had a specific agreement with the DVD creator to buy in bulk at a discount. You are free as a business to have special terms that restrict your rights when you buy from a vendor

prmoustache 4y ago

The fact they are labelled in a way do not mean they can legally enforce that.