Warner Brothers Will Make Netflix, Redbox, Blockbuster Wait Longer for New Movies
Want to watch a new movie just out on DVD from Warner Brothers? You're going to have to buy it, or wait even longer to get it from Netflix or other disc renters. — A new deal between Time Warner's movie studio …
Context & Ripple Effects
This is the second turn of a strategy Warner has been running since 2008, when it first experimented with delaying rental availability to revive DVD sales, and formalized in February 2010 when Redbox agreed to a 28-day window. Extending that wait past 28 days pushes the studio's logic further: if you want a new Warner title at launch, you buy the disc.
The timing lands on a weakened counterparty. Netflix has just reported its streaming base falling from more than 25 million to 20 million members, a customer-satisfaction slide per ForeSee, and a turbulent year overall — even as its 20 million members streamed over two billion hours in Q4 2011. The syndicated pickup by Media Decoder, framed around HBO ending DVD discounts for Netflix, shows how widely the studio squeeze on Netflix's disc business is being read.
First-order effects
- Netflix, Redbox and Blockbuster lose day-and-date access to Warner's new releases, making the kiosk and mail-rental offer strictly worse than buying at launch.
- Consumers face a sharper buy-or-wait choice on Warner titles, with the purchase option now carrying a longer exclusivity premium.
Second-order effects
- Redbox, whose 2010 economics were built around the 28-day compromise, must decide whether to accept a longer window or push back — its per-night $1 model depends on fresh titles driving kiosk traffic.
- Rival studios will watch whether the extended window measurably lifts Warner's disc sell-through against Netflix's softening subscriber numbers; if it does, expect copycat windows across the majors.
Third-order effects
- Release windows harden into the studios' main lever over rental intermediaries, segmenting home video into a buy-first tier and a delayed rental tier rather than one day-and-date market.
- If windowing proves effective at protecting disc revenue while streaming viewing keeps surging, studios gain leverage to demand richer terms from Netflix and kiosk operators alike — reshaping who captures value in home entertainment distribution.
The trend: Studios are lengthening the gap between disc release and rental availability to protect sell-through as consumption shifts toward kiosks and streaming.