DirecTV Pays Studios To Help Confuse Customers Further

from the restrictions-may-apply dept

Wed, Apr 21st 2010 1:11pm — Karl Bode

The film studios have convinced Netflix to sign deals that expand the company's access to streaming film licenses -- in exchange for agreeing to delay new releases by 28 days. Studios, of course, think this will somehow magically ramp up user purchases of physical DVDs, though it seems the primary result is going to be a lot of confused consumers, who see new releases for rent in one place, but not in another. But the studios are likely quite pleased with themselves, given the deal gives them more license negotiation power -- and allows them to charge companies more money if they want a perceived leg up on Netflix. If nobody is willing to pay, the studios figure they've still managed to create a wider delay window (the exact opposite of what should be happening in the broadband age).

But Blockbuster quickly jumped at the opportunity, throwing money at the studios, not only to avoid the new release delay, but so they could use the opportunity to mock Netflix instead of having to innovate. DirecTV has also now decided to play along, and will be paying for the honor of offering new releases under the "DirecTV Cinema" brand. Like Blockbuster, it didn't take DirecTV long to brag that unlike Netflix or Redbox, they'll be getting Avatar the same day it hits store shelves:

"As many as 400 new movies will be available this summer through DirecTV Cinema. Titles from Universal Studios Home Entertainment, Twentieth Century Fox and Time Warner Inc.'s Warner Bros. will be given to DirecTV subscribers 28 days before they can be rented on Netflix, said Paul Guyardo, DirecTV's chief sales and marketing officer"

Granted this might not hurt Netflix much, given the fact that DirecTV agreements with the studios ban them from offering subscription service, so if users want these new releases -- they have to pay between $4.99 and $5.99 per title -- nearly the cost of a Netflix subscription. You also had better hurry up and watch your movie, given that under a 2008 DirecTV agreement with the studios, movies you store on your DVR will be automatically deleted after 24 hours. While the studios think layering restriction upon restriction onto how, where and when customers can consume their product is helping them save the traditional DVD -- all they're really doing is delaying the inevitable death of physical media, annoying and confusing customers, and making it harder for people to consume their product.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: movies, release windows
Companies: directv, netflix

36 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Bob V (profile), 21 Apr 2010 @ 1:15pm

I wonder sometimes what the children and grandchildren of the RIAA and MPAA exec who make these decisions think. It's fairly obvious that the execs themselves are not consumers of media.
[ link to this | view in thread ]
Mikecancook, 21 Apr 2010 @ 1:17pm

Tough choice. Make customers go to Blockbuster, which I would refuse to do, or download a copy off the intertubes. Which would be much like streaming it the same day it comes out except, oh wait, anyone can get a copy and watch it right now. And has been able to since it came out if not before.

What's that saying? You don't compete with free by sucking?
[ link to this | view in thread ]
Anonymous Coward, 21 Apr 2010 @ 1:24pm

What it really does is push more people into learning how to use torrents.
[ link to this | view in thread ]
Anonymous Coward, 21 Apr 2010 @ 1:35pm

You typed "rushing" wrong. It came out as "delaying".
[ link to this | view in thread ]
Michael (profile), 21 Apr 2010 @ 1:35pm

The studios are basically taking bids from any company that Netflix is going to kill. Whoever pays up gets to stay in business for just a little bit longer.

Maintaining the delayed release agreement with Netflix is key for them. As long as they can go to Blockbuster and say "Now you pay MY price for these rentals, or you won't have anything to offer that Netflix doesn't do better."
[ link to this | view in thread ]
Steve, 21 Apr 2010 @ 1:40pm

I'm all for doing PPV on demand, streaming stuff ... once they get a reasonable price in place. $6 for a 24-hour viewing window (once started) is just crazy.

If I didn't want to wait, I'd rather rent the Bluray for $4 for 5 days at Blockbuster, and get 10x the quality.
[ link to this | view in thread ]
SureW (profile), 21 Apr 2010 @ 1:48pm

Not sure why the term "confused customers" is tossed around in these updates.

I think customers understand that some places have exclusive contracts or some items are not available everywhere. I don't go to Wal-Mart to buy AlienWare laptops etc.

Not saying it's a smart move; but I don't think consumers will be confused or distressed over it.
[ link to this | view in thread ]
:Lobo Santo (profile), 21 Apr 2010 @ 1:51pm

Re: Thinking of the children...?
"I wonder sometimes what the children and grandchildren of the RIAA and MPAA exec who make these decisions think."
That's just crazy talk. Everybody knows the undead cannot have children thru conventional means, and the execs at those companies are obviously vampires or ghouls or something.
[ link to this | view in thread ]
Jupiter (profile), 21 Apr 2010 @ 2:04pm

I'm just now getting Netflix movies that I put in my queue a year and a half ago. What the hell do I care about another 28 days?

Hollywood sure has people hyped up to see their latest turkey, while Netflix is giving me access to 100 years of stunning filmmaking from all over the world. I could go out and see a movie, but I know I've got a better movie waiting in my mailbox. If I'm going to bother to leave the house, I'd rather go to the theatre and see a play with real people.
[ link to this | view in thread ]
Don Brew Haha, 21 Apr 2010 @ 2:08pm

Luddite
Nothing new here..... See "Luddite" at Wikipedia dot com
[ link to this | view in thread ]
sehlat (profile), 21 Apr 2010 @ 2:14pm

Re:
I quite agree. Netflix has been a bonanza of fine films for my family, few of them coming out of the Hollywood Cesspool. This weekend, we got to see Akira Kurosawa's "Madedayo," which was a beautiful reminder that Kurosawa knew how to tell stories, and those stories were not limited to samurai movies.

It's not the only, or even the first movie we've seen that is better than anything coming out from America's corporatized movie factories.

About the only way 28 days will ever really matter is if the studios find a way to release a virus that infests you with murderous rage unless you watch their crap within that time limit.
[ link to this | view in thread ]
JEDIDIAH, 21 Apr 2010 @ 2:15pm

They're signing their own death warrant
Whenever Blockbuster or DirecTV mentions Netflix, they are essentially signing their own death warrant.

We recently got our Netflix streaming disc for the Wii. When the wife saw it her immediate response was: "cable is doomed".

Now I have been a DVR user for a long time and I have a wonderfully geeky MythTV setup but having everything on demand for a low flat monthly fee is the bees knees. There's even some older HBO/Showtime stuff on there.

So if you have a little patience you can wait for the $15 per month per premium channel stuff to come to you.

A comparable cable package that would allow timely access to all of that stuff would be $100 per month.

An extra 28 days isn't going to matter to a lot of people.

I suspect that there is a quick falloff and a gaping chasm from "willing to buy" versus "interested in renting".

BTW: Don't bother with the Roku player. It's crap.
[ link to this | view in thread ]
Anonymous Coward, 21 Apr 2010 @ 2:17pm

Re:
You don't have to be a consumer of your own product. You always get your own product free for personal use and you get it before its released to everyone else. They are clueless and they don't care.
[ link to this | view in thread ]
Yakko Warner, 21 Apr 2010 @ 2:21pm

24-hour delete is self-defeating
The same restriction was in place when Microsoft launched movie rentals over Xbox Live -- you could pay to rent for 72 hours, but once you start the movie, you must finish it within 24 hours. It smelled like the kind of restriction put in place only to make MPAA execs happy.

(At least, that was the case when it first launched. I don't know if the terms are the same since they rebranded it as Zune; I haven't had any interest in checking.)

The thing is, I have young kids. My peace and quiet "me" time doesn't start until they're in bed. I could start watching a movie, and it's not inconceivable that something could happen that would take me away from the movie for the night (kid getting sick, a nightmare, a dozen and one other things that parents deal with), and I wouldn't get back to the movie until my next "me" time -- 24 hours later. Oops, movie's deleted.

Which is why I've never used the service.
[ link to this | view in thread ]
fogbugzd (profile), 21 Apr 2010 @ 2:23pm

Timing
The studios usually have a major advertising push right around the release of the movie. 28 days after the hype, it shows up on Netflix and no one notices.
[ link to this | view in thread ]
jakerome (profile), 21 Apr 2010 @ 2:25pm

Not that complicated
Netflix buys DVDs and the studios earn zero additional dollars when someone rents them. Blockbuster is lent the DVDs, and pays a cut to the studio for each rental. This innovation came about because of the great "The New Release DVDs are never available" crisis of the early 2000s. DirecTV pays the studios a cut for each PPV download.

It may be, in part, about getting more people to buy DVDs. But mostly it's about the studios wanting to get a cut of each DVD rented, at least for the first 30 days. Netflix could've thumbed their nose at the studios, but that would likely have killed their streaming service as studios pulled movies off the virtual shelves.
[ link to this | view in thread ]
Joe (profile), 21 Apr 2010 @ 2:27pm

Re:
I think you greatly underestimate the average consumer.

I don't expect to see a mass defect to BB to rent new releases or anything, but I can see people being incorrectly upset with NetFlix or RedBox as a result because they assume THEY are the ones delaying releases.
[ link to this | view in thread ]
Anonymous Coward, 21 Apr 2010 @ 2:53pm

@Steve
"If I didn't want to wait, I'd rather rent the Bluray for $4 for 5 days at Blockbuster, and get 10x the quality."

It is HD 1080i. I had the misfortune to "upgrade" to one of these crappy devices recently because they said they were turning off the MPEG2 HD Spigot in favor of MPEG4. So they offered a "New and improved" crappy DVR which reminds me of DishNetwork's crappy DVR software.

The damn thing doesn't even record the second tuner so I can go back to the other show...

And yes, the 24-hour window shows are $6.00. Plus, there's some new DVR has some sort of On-Demand capability where it secretly records obscure TV shows during off-peak time and then presents ads in for them in the scheduler like an annoying Carnival Barker, and also has an ethernet port in so in the future, I can use DirecTV's pricey version of NetFlix.

I really want my TiVo back. Thinking of switching to (ugh) Comcast.
[ link to this | view in thread ]
Anonymous Coward, 21 Apr 2010 @ 2:57pm

@Steve
"If I didn't want to wait, I'd rather rent the Bluray for $4 for 5 days at Blockbuster, and get 10x the quality."

It is HD 1080i. I had the misfortune to "upgrade" to one of these crappy devices recently because they said they were turning off the MPEG2 HD Spigot in favor of MPEG4. So they offered a "New and improved" crappy DVR which reminds me of DishNetwork's crappy DVR software.

The damn thing doesn't even record the second tuner so I can go back to the other show...

And yes, the 24-hour window shows are $6.00. Plus, there's some new DVR has some sort of On-Demand capability where it secretly records obscure TV shows during off-peak time and then presents ads in for them in the scheduler like an annoying Carnival Barker, and also has an ethernet port in so in the future, I can use DirecTV's pricey version of NetFlix.

I really want my TiVo back. Thinking of switching to (ugh) Comcast.
[ link to this | view in thread ]
JEDIDIAH, 21 Apr 2010 @ 2:59pm

Re: Timing
Netflix can let me add a movie to my queue as soon as they want. They don't have to wait until it's actually shipping. They could offer a (send it when you get it) sort of option (and might do that already). Netflix isn't a realtime service. So it doesn't matter so much what the studio timeline is. It's much like the Tivo in this respect.

If I were that hot about a movie, I would pre-order it from Amazon.

I am "processing" one of those right now infact.
[ link to this | view in thread ]
taoareyou (profile), 21 Apr 2010 @ 3:07pm

I subscribe to Netflix. Netflix offers me things other than new releases. I'm not going to go out and buy DVDs just because the studios want me to do so. I'm not going out and spending money with Blockbuster just because they get new releases earlier. I'm definitely not going to subscribe to Direct-TV.

Netflix has more and more stuff available to stream. That is what I like. I don't want to bother with shipping little discs back and forth or paying $20 for a disc I may only watch once.

I am perfectly comfortable with what I am spending and have no intentions to change that just to support some business model I'm not interested in using.
[ link to this | view in thread ]
Anonymous Coward, 21 Apr 2010 @ 3:08pm

the funny part is that it isnt any harder to consume the product at all. unless you are going to drop dead in 28 days, you pretty much will have all the same chance to see the movie outside of the theater as you did before. remember it is you who chose not to go to the theater to see it. the harder to consume thing is a red herring.
[ link to this | view in thread ]
ElijahBlue (profile), 21 Apr 2010 @ 3:20pm

Re:
I'm just now getting Netflix movies that I put in my queue a year and a half ago. What the hell do I care about another 28 days?
Same here. I also can't imagine getting my pants wet thinking about seeing Avatar on my laptop TV screen. If I want to see a blockbuster (no pun intended) I'll go to the movies and see the film as the creator intended - on a huge screen with surround-sound and greasy popcorn drenched in butter.
[ link to this | view in thread ]
ECA (profile), 21 Apr 2010 @ 3:23pm

So what..
Either wait another month..
Or learn to DL off the net, 6 months BEFORE its even released??

Big challenge.
[ link to this | view in thread ]
Rose M. Welch (profile), 21 Apr 2010 @ 3:39pm

Re: They're signing their own death warrant
Yes! Now that they have Instant Streaming on the top three gaming devices and people are quickly learning how to hook up their laptops to their big screens (what we did before we got our Wii disc), they're gold. You can't kill them. Advertising mocking a month-delay may postpone a few potential customers, but it's not going to hurt them in any substantial way.
[ link to this | view in thread ]
P3T3R5ON (profile), 21 Apr 2010 @ 3:41pm

soooo...
So by delaying the release for streaming by 28 days you are hoping to accomplish what?

Cause I can get it (if I wanted to) before you even release it to DVD because video piracy is far from controlled.

So don't give us what we want, then make it take longer to give us what we want...what do you think we are going to do? We will go get what we want, when we want it...
[ link to this | view in thread ]
taoareyou (profile), 21 Apr 2010 @ 3:50pm

Exactly. If I could wait and pass on the theater experience, will waiting another 28 days really bother me? My patience won't suddenly vanish. If it was so very important that I experience a movie as soon as possible, I would have gone to the theater.
[ link to this | view in thread ]
Anonymous Coward, 21 Apr 2010 @ 4:29pm

Re: soooo...
if you were going to get it by pirating it the release date means nothing to you except perhaps to get a better quality version. you were not going to pay anyway, so the commercial releases mean nothing.
[ link to this | view in thread ]
InfoWars, 21 Apr 2010 @ 4:38pm

Right..
All the Netflix movies I want are not there anyways.. Invisible Empire, Fall of the Republic, Obama Deception, ZeitGeist Movie, PoliceState 4. You know, all the ones that tell what's really going on you can't get untill you hit the interweb..
[ link to this | view in thread ]
Tyanna, 22 Apr 2010 @ 6:23am

Re:
Don't forget that it won't be deleted from your hard drive if you don't watch it within 24 hours of downloading. :)
[ link to this | view in thread ]
Joel (profile), 22 Apr 2010 @ 8:54am

No shots at Blockbuster?
Why didn't they take a shot at BlockBuster too?? I want to see DirecTV tell people what advantages they have over heading to BlockBuster.

I see some numbers are going to be rising and it won't be profit or stock well at least not for BlockBuster and DirecTV.
[ link to this | view in thread ]
Hephaestus (profile), 22 Apr 2010 @ 4:22pm

Re: Re:
"greasy popcorn drenched in butter."

Actually its ...

"greasy popcorn drenched in Partially Hydrogenated Vegetable Oil"
[ link to this | view in thread ]
Derek Kerton (profile), 22 Apr 2010 @ 4:24pm

Re:
Good point.
[ link to this | view in thread ]
Derek Kerton (profile), 22 Apr 2010 @ 4:34pm

Re: 24-hour delete is self-defeating
That happened to me with two movies from Amazon on Demand over a year ago. When I could not play the movie I legally rented that was stored on my laptop's drive, the movie industry made a jaded customer for life.

Those were the last movies I will ever "rent" under those terms.

I've found other options that better meet my needs. Netflix is one such option.
[ link to this | view in thread ]
Derek Kerton (profile), 22 Apr 2010 @ 4:38pm

Re: Re: soooo...
Wrong. The release date matters a lot. If it were released on PPV and DVD at the same time as the theater, Peterson might pay a few bucks for a legit version. As it is, he doesn't.
[ link to this | view in thread ]
tollfree (profile), 29 May 2010 @ 2:22pm

Called DirecTV Toll Free Telephone at 1-877-781-4046 - Got Perfect System/Service
Personally I could not of been happier with the equipment and service I received from my DIRECTV order when I dialed the telephone number for DIRECTV at 1-877-781-4046. The installation technician was most helpful with showing me how the system works from how to use the clever interface to what is required to program the free HD DVR I received. I really could of not asked for a better system, a better deal, or a better outfit as the support apparatus was an absolute paragon of professional excellence. I would personally recommend to anyone to call 1-877-781-4046 and order DirecTV. I would stake my reputation on it.
[ link to this | view in thread ]