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Netflix Agrees To Delay Distribution Of New Releases From Fox And Universal

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Universal Studios and Twentieth Century Fox, which are both trying to protect sales of their DVDs, have now gotten Netflix (NSDQ: NFLX) to agree to delay renting their new titles until 28 days after they are first available for purchase in stores. In exchange, both studios are letting Netflix make more of their titles available for instant streaming. The deals follow a similar one Warner Bros. (NYSE: TWX) reached with Netflix in January.

During negotiations, Netflix CEO Reed Hastings had publicly acknowledged the impact that cheap rentals were having on DVD sales and said that his company was willing to take new releases at a later date, as long as the studios gave Netflix a significant discount. Netflix says its deal with Universal will give it the “benefits of reduced product costs;” it does not make a similar assertion about Fox.

Both deals do however let Netflix builk up its instant-streaming catalogue. Fox, for instance, says it will make all prior seasons of several hit TV series, including 24, Bones and King of the Hill, available to Netflix instant-streaming subscribers, while Universal says it is doing the same with some “premium domestic titles,” like Gosford Park.

One winner may be Blockbuster (NYSE: BBI), which itself has been negotiating with the studios so it can rent new releases on the same day they are available for sale. So far, it has gotten Warner Bros., Sony (NYSE: SNE) and Fox to agree — and has been loudly advertising its advantage over Netflix and Redbox when it comes to Warner Bros. titles.

One Response to “Netflix Agrees To Delay Distribution Of New Releases From Fox And Universal”

  1. greagirl

    Call me kooky but if I REALLY want to see a movie that badly, I go and watch it at the movie theater on the great big jumbo screen when it first comes out. If for some bizarre reason I am unable to watch it at the “big theater” then I go and watch it at the $1.50 discount theater. In the rare instance that I want to see a new release that is straight to DVD or foreign, I simply put it to the top of my Netflix queue and continuously receive free extra “bonus” DVDs (DVDs on top of my subscription plan allotment) until they can ship it to me. It’s pretty win/win for me.

    I LOVE movies but I consider actually going out into the world and engaging in actual activities with real live people, etc. to be more a priority in my life. There is not one single movie out there that I will throw a fit over if I don’t get. If you choose not to watch a movie at the movie theater and have the patience to wait for it to come out on Blu-ray/DVD in the first place, you really must NOT want to see it all that badly, and therefore, waiting an extra month will hardly kill you.

    I do, however, have mixed feelings about this deal, if only on principle. While I do have a home theatre complete with a Netflix streaming blu-ray player and the more interesting content available via streaming for me to watch when I’m tooling around the house for whatever reason, the better, I also(on principle) don’t like the idea of movie studios trying to force anyone into buying their DVD or going to Blockbuster. There’s just something very un-American (and likewise very American(wink.)) about it all. We are afterall (in theory) a country that believes in competition are we not?

    Still, however, positive or negative this shift is, only time will tell.