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

Reed Hastings

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.

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