Netflix agrees to 28-day delay for Fox, Universal movies

[Smokey]

Netflix agreed Friday to delay new releases from Fox and Universal as long as 28 days after the "street date," giving the studios time to rake in receipts from sales directly to consumers before they're available on Netflix.

Netflix announced a similar deal with Warner Bros. Home Entertainment Group in January.

DVD and Blu-ray copies of Twentieth Century Fox's hit movie "Avatar," for example, will be sold in stores April 22, but will be released four weeks later to Netflix subscribers. In return, the studios agreed to provide Netflix access to DVD and Blu-ray discs at "reduced product costs, significantly more units and better in-stock levels," according to a company statement.

As plummeting DVD sales have shrunk the bottom line of studios in recent years, they have focused on Redbox and Netflix out of concern that they are drawing consumers away from purchases. Redbox and Netflix rentals generate the smallest profit margins for studios of any home entertainment transaction, and Blu-ray and DVD purchases are the most profitable.

http://www.mercurynews.com/san-jose-neighborhoods/ci_14853037/index.html

[atomicAdam]

seems like maybe it would be time to start cutting the extravagant salaries of actors and pop stars......i don't know, just an idea.

or maybe they should just start making better movies....

[Smokey]

seems like maybe it would be time to start cutting the extravagant salaries of actors and pop stars......

Bite your tongue!!

If they start cutting salaries, then how high paid actors like Nicholos Cage can afford nine Rolls Royces, more than a dozen homes, two castles in England and Bavaria. And four yachts, one each for the Caribbean, Mediterranean, Newport Beach, California, and Rhode Island.

[Sir Terrence the Terrible]

Bite your tongue!!

If they start cutting salaries, then how high paid actors like Nicholos Cage can afford nine Rolls Royces, more than a dozen homes, two castles in England and Bavaria. And four yachts, one each for the Caribbean, Mediterranean, Newport Beach, California, and Rhode Island.

Bernie Madoff got a hold of Nick, and the banks got a hold on all that you have mentioned. Nick is already toast.

[Sir Terrence the Terrible]

seems like maybe it would be time to start cutting the extravagant salaries of actors and pop stars......i don't know, just an idea.

or maybe they should just start making better movies....

Salaries have gotten out of control, but are already being reigned in as the most highest grossing actors movies are bombing more than what is happening in Iraq right now.

While the there is a slow down in DVD sales, there are more outlets for studio to generate revenue than there has been in the past. Digital rental downloads are increasing, though digital sale through has never quite taken off. Blu ray sales are off the chart, but cannot make up for lost DVD revenue. The format war cost the studios greatly, and now many of them wish it never happened. Universal and Paramount(the ones that fueled the war) are taking it on the chin more than any one of the big major studios, but they are not doing nearly as bad as the press would lead you to believe.

[bobsticks]

Bite your tongue!!

If they start cutting salaries, then how high paid actors like Nicholos Cage can afford nine Rolls Royces, more than a dozen homes, two castles in England and Bavaria. And four yachts, one each for the Caribbean, Mediterranean, Newport Beach, California, and Rhode Island.

Didn't a couple of Cage's houses just go into receivership? I'm pretty sure he's closer to bankruptcy than many would believe...

[atomicAdam]

I'm sorry. I didn't mean the derail the OG post. I was just pointing out in a rather sarcastic way that Hollywood appears to be once again blaming someone else for their probems, again.

[Sir Terrence the Terrible]

I'm sorry. I didn't mean the derail the OG post. I was just pointing out in a rather sarcastic way that Hollywood appears to be once again blaming someone else for their probems, again.

We often have a bad habit of this, even though some of the time they are hitting the nail on the head. Redbox and Netflix pay a very small percentage of rental income to the studios, no doubt, but every little bit helps when your market has fragmented like it has in home entertainment.

I am encouraged for the studios. With the building out of post production facilities by both Universal and Disney, and the upgrade and expansion of digital net based production and post production facilities by the same two, they are definitely following the fragmentation with content that is monetized over many platforms. Some studios will follow quicker than others, and that is no different than past times of changes(silent to sound, Academy flat to widescreen etc.).

[Smokey]

Didn't a couple of Cage's houses just go into receivership? I'm pretty sure he's closer to bankruptcy than many would believe...

He is blaming most of financial mishaps on his manager Samuel Levin which he is suing for 20 mil. But one also have to question the Cage's common sense about his spending spree and lavish life style. It is just like a guy that buy a house with 5 bathrooms. He still can not use each washroom one at a time :)


While the there is a slow down in DVD sales, there are more outlets for studio to generate revenue than there has been in the past. Digital rental downloads are increasing, though digital sale through has never quite taken off. Blu ray sales are off the chart, but cannot make up for lost DVD revenue.

Do studios have a plan for extra revenues when DVDs disappear altogether. Last week I sold a big chunck of my DVD collection and they will not be replaced by its blu ray equivalent, and I'm sure many will not replace their DVD with bluray. So studios will not make same money with Bluray as they did when DVD was taking off.

While back you said that studios can not wait to get rid of DVD format. The common sense dictate as to why they want to kill their cash cow.

[Sir Terrence the Terrible]

Do studios have a plan for extra revenues when DVDs disappear altogether. Last week I sold a big chunck of my DVD collection and they will not be replaced by its blu ray equivalent, and I'm sure many will not replace their DVD with bluray. So studios will not make same money with Bluray as they did when DVD was taking off.

While back you said that studios can not wait to get rid of DVD format. The common sense dictate as to why they want to kill their cash cow.

Well Smoke, the cash cow isn't what it used to be, as the DVD market has slipped 25% since 2006. The only thing left to release on the format is new releases, as the studios have gone through all of the catalog titles and are now re-releasing them for the 2nd and 3rd as classic or special editions. Even new releases are not selling as many numbers as 2002-2004 as quite a few buyers have switched to Blu ray as their buying source(I know I am one of them).

The studios want DVD to go by the wayside so they can concentrate on long term growth for the Blu ray format. First you have standard Blu ray, then 3D, then sometime down the road 4K Blu ray. Television manufacturers are already positioning themselves for all three in a single television first with Toshiba and the Cell Television, and Sony with a 3D LED 4x2K television and projector, Panasonic 150" 4K 2160p Plasmas and 103" LCD television.

Then there is digital rental downloads and VOD which is also growing, and as other companies come into the market may also become the dominate way folks rent movies. Internet connected television and streaming devices are fueling this push.

Then you have advances in the theater realm with Iosono 3D sound combined with 3D visuals, which has the potential of really driving viewers to theaters.

If the studios play their cards right and not try and exploit the market for higher revenues, they can create a long term cash stream to fuel bigger and better projects in the future.

[GMichael]

If DVD's and BR discs were to go away, the cost for Netflix would skyrocket.

[kevlarus]

Netflix agreed Friday to delay new releases from Fox and Universal as long as 28 days after the "street date," giving the studios time to rake in receipts from sales directly to consumers before they're available on Netflix.

Netflix announced a similar deal with Warner Bros. Home Entertainment Group in January.



While I understand the studios reasoning behind this, I can see them walking out onto thin ice vis-a-vis studios conspiring to prevent competition (there's a legal phrase which I can't put my mind to right now for that). This is the big sign where DVD's are down to $1 commodity prices.

Kinda suprised to see RedBox and NetFlix so easily agree to these requests, but I suppose if they didn't, the studios would just say "that's ok then, you're no longer an approved renter".

[Woochifer]

Do studios have a plan for extra revenues when DVDs disappear altogether. Last week I sold a big chunck of my DVD collection and they will not be replaced by its blu ray equivalent, and I'm sure many will not replace their DVD with bluray. So studios will not make same money with Bluray as they did when DVD was taking off.

While back you said that studios can not wait to get rid of DVD format. The common sense dictate as to why they want to kill their cash cow.

The issue for the studios is that the DVD format was a one-shot transition that turned the video market from a rental-driven market to a sell-through driven market. The entire pricing structure of the home video market changed with the popularity of the DVD format because it eliminated the rental release window.

The point that you're missing is that the DVD would have declined even without Blu-ray and all the other options out there. As T mentioned, the studios have already mined through their film libraries and issued most of the eagerly awaited older titles (many of them two, three, or four times).

And it seems that the studios are not releasing nearly as many catalog titles as before. All you have to do is look at how many old TV series got their first season or two released on DVD, but subsequent seasons put on hold. Now that the catalog has been depleted, you're left with new releases.

However, new releases have always driven the market and accounted for the vast majority of titles. The demand from the initial release window will always sustain the home video industry. Blu-ray has done very well, and catalog releases have been the fastest growing portion of the Blu-ray market.

I agree that not too many people will replace every DVD in their collection with Blu-ray. But, that doesn't mean that people won't replace some of their DVDs with Blu-ray. And it doesn't preclude Blu-ray from taking over the market for new releases (where the vast majority of demand has always resided) in the next couple of years.

[Woochifer]

While I understand the studios reasoning behind this, I can see them walking out onto thin ice vis-a-vis studios conspiring to prevent competition (there's a legal phrase which I can't put my mind to right now for that). This is the big sign where DVD's are down to $1 commodity prices.

Kinda suprised to see RedBox and NetFlix so easily agree to these requests, but I suppose if they didn't, the studios would just say "that's ok then, you're no longer an approved renter".

Netflix is largely insulated because their wishlist queue setup means that their customers don't expect to see the newest releases immediately around the time that they come out. The release window is not as crucial for them.

Redbox has had to resort to buying DVDs at retail in order to stock their machines and bypass the conditions that the studios wanted to place on them. But, with retailers like Walmart and Target implementing purchase limits per title on DVD purchases, Redbox was screwed.

Retailers sell new release DVDs near or below wholesale cost during the week of release to attract customers into their stores, and get them to buy other items to make up for losses on the DVD transaction. That doesn't work if Redbox employees are cleaning out retail stores of their new DVD stocks, so it's no surprise that retailers started clamping down.

Redbox had no choice but to deal with the studios' distributors and their conditions in return for a reliable supply of product. Video rental chains that agree to revenue sharing arrangements with the studios don't have to pay wholesale costs up front, and can get huge allotments of discs on the week of release. That's a safer bet than using Walmart or Best Buy as your wholesale supplier.

[Hyfi]

First of all, the salaries of an actor are way out of line. Maybe they should spend a month as a firefighter or cop so they can understand what real work is.

Second, over the last several years, animated movies have been much better than movies with actual humans in them.

Third, the studios keep over using the same actors. Speaking of Cage, he is a big lifeless BORE with only one expression which is "duhhhhhh".

And lastly, by holding back the movies from Netflix for a month will only hurt them worse. The same folks who always rip and put out a torrent will continue to do so and now people will just download it for free right after someone buys it.

Pretty stupid idea if you ask me. Now BOTH the Studios and Netflix will be losing revenue.

[Smokey]

Well Smoke, the cash cow isn't what it used to be, as the DVD market has slipped 25% since 2006. The only thing left to release on the format is new releases, as the studios have gone through all of the catalog titles and are now re-releasing them for the 2nd and 3rd as classic or special editions.

As much as hate to admit it, that is pretty much true. One look at Walmart's bargain bin will confirm this. Two ot three years ago, DVDs were flying off the bin pretty quickly. But now there are hardly anybody hanging around the bin, even with newer titles in it.


I agree that not too many people will replace every DVD in their collection with Blu-ray. But, that doesn't mean that people won't replace some of their DVDs with Blu-ray.

Not untill Walmart start a new bluray bargain bin :D


Second, over the last several years, animated movies have been much better than movies with actual humans in them.

That probably apply to TV shows also. I watch more animated TV shows that real ones.

[Woochifer]

And lastly, by holding back the movies from Netflix for a month will only hurt them worse. The same folks who always rip and put out a torrent will continue to do so and now people will just download it for free right after someone buys it.

You're missing the big picture here. The revenues for disc media generate by far the highest margins for the studios. The release window is when consumer demand is at its highest. This move is all about ensuring that the demand stays in the sell-through market as long as possible. Despite the downturn, the home video market remains dominated by sell-through.

The folks who download off of torrent sites are already not paying for what they watch. They're already not part of the revenue stream. I doubt that a rental moratorium will move the needle one way or another. Most people don't watch movies on computers or attach networked devices to their TVs.


Pretty stupid idea if you ask me. Now BOTH the Studios and Netflix will be losing revenue.

Quite the contrary. Netflix makes out quite well. They now have an agreement in place that guarantees a stream of recent releases for their streaming service. And if the studios negotiated a higher revenue sharing percentage, then they come out ahead as well. Netflix customers already don't expect new releases to be delivered immediately, so the moratorium doesn't really affect them.

The moratorium hurts only one player -- Redbox. They agreed to it because they had no choice. Wholesale distributors already cut them out, and when Redbox tried circumventing the wholesale restrictions by buying their DVDs at retail stores, Walmart, Best Buy, and Target imposed purchase limits on new releases.

[pixelthis]

Didn't a couple of Cage's houses just go into receivership? I'm pretty sure he's closer to bankruptcy than many would believe...


CAGE has gone bankrupt.
Selling his main house for 32 mill(no takers)_.
REDBOX has done a similar deal.
But pay-per-view is increasingly same "day and date"(pay per view is the preferred
delivery system of the studios).
I smell a setup from these lovable bloodsuckers that tried to outlaw the VCR,
and then went on to make billions on pre-recorded video(probably talkies idea):1:

[BadAssJazz]

28 Days Later. Great movie. Bad rental policy.


Netflix is largely insulated because their wishlist queue setup means that their customers don't expect to see the newest releases immediately around the time that they come out. The release window is not as crucial for them.

Speaking strictly for myself... we can debate whether or not I have a reasonable expectation, but given Netflix's practice of getting the newest releases to me typically on the same day as the release date due to living within their oft-touted one day delivery zones, yes, I'm accustomed to it, I expect it and it is crucial to me.

Back when Netflix was first getting off the ground, I actually cancelled the account for months because they were always out of the latest releases. Postponing the release date has the same effect of "Long Wait" status in my mind.

Moving the rental release dates back a month plays into the hands of the studios, cable & satellite on demand providers, used resellers, and of course, the suppliers of pirated materials. My hunch is that Netflix and other rental companies will feel the impact of this decision...and it won't tickle.

[pixelthis]

HEY SMOKEY.
Haven't you noticed?
The entire DVD section at Walfart has become a "bargain" bin.
A three pack of the XMEN movies...TEN BUCKS.
Ditto for the first three Die hard movies.
Not many DVD's over ten bucks.
And on a similar note, BLU is becoming cheaper.
The Arrival on BLU for eight bucks, a minor sci-fi classic.
If they can't keep the price of BLU up, then DVD is certainly doomed.:1:

[Smokey]

HEY SMOKEY.
Haven't you noticed?
The entire DVD section at Walfart has become a "bargain" bin.
A three pack of the XMEN movies...TEN BUCKS. itto for the first three Die hard movies.
Not many DVD's over ten bucks:1:

Whats up Pix

I think the DVD may have reached the market saturation point where most poeple have own or rented the movies they wanted on DVDs (minus new releases), so there are not too many DVD buyers out there.

Even the chain store Biglots $3 DVD bin seem to be slow going where titles used to fly off shellf just couple of years ago, now seem not to move so fast. Lowering the price and/or repackgaing (like tripple play) may be the only option left to attract more buyers.