Netflix Swaps Longer DVD Window for More Streaming Titles from Warner Bros.

27 Comments

Netflix CEO Reed Hastings at NewTeeVee Live

Under the new agreement, everyone wins:

Netflix gets more content that will cost it less money to deliver. At NewTeeVee live in November, Netflix CEO Reed Hastings told Om that it costs about $0.05 per title for the company to stream a single film online. On the other hand, Netflix spends about $600 million a year in postage fees delivering DVDs and Blu-ray discs by mail. In addition, the 28-day window, while limiting the amount of new content that is available during the first four weeks of a DVD’s life, has the added bonus of reducing the number of new release discs that will need to be obtained, stored, or shipped. According to the press release, new releases from all suppliers account for about 30 percent of Netflix shipments.

Warner Bros. could increase sales in the four week window. The film studio says that 75 percent of sell-through for its DVDs and Blu-ray discs occurs in the first four weeks that those discs are available. Since new releases will no longer be competing with Netflix rentals during that period, Warner is betting that it will be able to get more consumers to pony up and own the physical disc, rather than just renting it on Netflix.

The deal is just one more example of how Netflix is de-emphasizing DVD-by-mail in lieu of its streaming video service. Last month, the company made the tab for its “Watch Instantly” streaming service the first thing users see when they log on to Netflix.com.

Due to a proliferation of ways users can “Watch Instantly” on the TV — from connected TVs to Blu-Ray players to gaming consoles — the company is seeing quick take-up of that service. According to a recent study, 62 percent of Netflix subscribers have tried out the streaming service, and more than half — 54 percent — stream Netflix titles at least once a month.

27 Comments

Joe Cool

Why doesn’t Amazon have this restriction? This just makes me want to cancel Netflix and start streaming from Amazon!

Dogtags

The only problem I have with streaming is the lack of HD quality. If netflix is trying to get everybody to stream then what the hell is a blu ray player for?.

Tyler Durrant

Any one else receive WB discs of Late for new rentals that say “Rental” and have a grey cover?

Razzmuzzen

The question is – when WB realizes that Netflix subscribers are not the cause of declining DVD sales – rental does not cannibalize retail significantly – will they cop to it? Will they be back to netflix saying: “never mind, we were wrong, just looking for a scapegoat to explain 2009’s P&L”?

This whole DVD windows thing for Netflix & Redbox is folly. Turning back the clock to a VHS model circa 1984 is more proof that the entertainment industry is stumped, too conservative to figure out a solution.

Adam

The problem with this 4 week window is that it’s only an inconvenience during the first month of it’s existence. After that, people will simply be 4 weeks behind in their viewing schedule for all WB releases and will simply rent them later. The film industry is fighting a losing battle here and Netflix knows it. So sure, it’s a big win for Netflix but it’s neither good nor bad for WB.

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