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Summary:

Hollywood studios began striking deals earlier this year to ensure new release DVDs weren’t available for rent from Netflix or Redbox for 28 days until after they had gone on sale. But if certain studio execs have their way, the wait might get even longer.

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Earlier this year, Hollywood studios began striking deals to ensure that new release DVD titles are not available for rent from Netflix’s DVD-by-mail service or Redbox automated kiosks for 28 days until after they had been available for sale. But soon all new releases could be subject to the 28-day rental window — and if certain studio execs have their way, the wait might get even longer.

According to the LA Times, studio executives from Fox, Universal and Warner Bros. said at an industry conference Tuesday that DVD sales have increased some 10 to 15 percent over comparable titles since the 28-day DVD rental window has been instituted. That’s bad news for consumers, as more studios may seek to follow suit and strike their own windowing deals.

But that’s not all. With the success of a four-week window under their belts, studios might try to extend the time between the date a DVD goes on sale and when it becomes available for rent even further, hoping to extract even more value from DVD sales. The LA Times reports:

Warner Bros.’ Ron Sanders said his studio’s only problem with the 28-day window for Redbox and Netflix is that it’s not long enough. “To be honest, I think it’s a little short today versus what we probably need,” he said. “That will get revisited as those deals expire.”

But despite the boost that some studios are seeing from the sales of certain windowed titles, DVD sales as a whole are a dying business. The market is down 14 percent over the past year, according to Sanders (who is also board president for DEG: The Digital Entertainment Group). And growth of Blu-ray discs and digital distribution aren’t making up the slack: overall home entertainment sales — which include DVDs, Blu-rays, as well as digital downloads and rentals — are down 4 percent for the year.

That makes companies like Netflix and Redbox look bad to the studios, which have grown dependent on the DVD cash cow over the last several years. The problem is that it’s not new forms of distribution that are eating into their profit margins, but fundamental shifts in consumer behavior. If the studios don’t embrace those shifts — which includes no longer buying DVDs but paying for and consuming entertainment in different ways — they will be left clinging to a dying business model.

Image courtesy of Flickr user Scott Feldstein.

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  1. How can a studio release a DVD for sale but prevent the buyers of the DVD from renting it out? In the case of Netflix, I can understand – Netflix has to do what studios want in order to get the right to stream movies. But what’s stopping Redbox from buying the DVD the day it comes out and renting it out immediately without waiting 28 days?

  2. What’s really interesting is what happens with these windows as people transition from physical to digital. Netflix current window for STREAMING content is multiple YEARS (not 28 days) for lots of top content. As more people get more connected TVs etc. they’ll be less willing to wait for the mail & will really feel the pain.

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