Warner Bros., HBO Withhold DVDs From Netflix And Redbox
In what could be part of a larger Hollywood strategy to raise flagging DVD sales, Warner Bros. is reportedly requiring Netflix and Redbox to wait twice as long before receiving DVDs of their movies. At the same time, news leaked that HBO (owned by Time Warner) would no longer sell DVDs to Netflix at a discount, signaling the escalating competition as movie and TV studios see streaming and rental as a growing threat to their profits.
Right now, Redbox, Netflix, and Blockbuster customers generally must wait 28 days after a movie or TV show is released on DVD before it becomes available for rental. This window forces consumers to buy the DVD during that time, which offers a much higher profit margin to the parent company. Warner Bros. is now pushing a 56 day window.
According to AllThingsD, Redbox’s parent company Coinstar denies that they have agreed to a new deal.
HBO previously sold DVDs directly to Netflix in bulk for wholesale. Now, the rental company will have to buy the discs retail. This will not be a major blow to the company, but represents just how clear competition has become between the companies that produce programming and the companies that once simply distributed the product.
Netflix and Redbox have become rivals to the networks’ and studios’ own efforts to sell or stream their programming. In fact, Netflix still does not stream HBO shows or movies, as these are available exclusively through HBO GO.
What do you think? Will this make you reconsider using the rental companies?