Redbox Follows Netflix's Lead, Delays Fox and Universal DVD Releases by 28 Days

from the misguided,-again dept

Mon, Apr 26th 2010 12:47pm — Carlo Longino

A couple of weeks ago, Netflix announced that it had reached a "deal" with Fox and Universal movies studios, in which it agreed to delay the release of their DVDs to its subscribers by 28 days. Netflix did the deal in order to maintain its access to movies for its streaming service, and the studios think it will help them sell more DVDs. The studios tried to get DVD rental service Redbox over a similar barrel by threatening its access to their DVDs. Redbox had already caved to Warner Bros., and has now done a similar deal to Netflix's, with Fox and Universal. And, just like all the earlier deals, this one's pretty stupid on the part of the movie studios. Let's go over why.

Redbox offers two main benefits to its customers: convenience and price. Its machines are everywhere these days, and its $1 per night price capitalized on the widespread consumer displeasure with Blockbuster and other rental chains' high prices and late fees. The Redbox customer is price sensitive; so is it really very likely that delaying the release of a movie by a month is going to get them to decide to shell out $15-$25 per movie to see it immediately after it's released? The same goes for Netflix subscribers. If they're already paying for their subscription service, why would they run out to buy a new release -- particularly when they already have to wait to get some new releases anyway. The studios think they can force customers to change their behavior by controlling access to new movies. All this plan is going to do is to illustrate to them that the part of the market they're aiming for with these delays really doesn't care enough -- or cares about other factors more -- to behave any differently.

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Filed Under: movies, release windows
Companies: netflix, redbox, universal

40 Comments

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william (profile), 26 Apr 2010 @ 10:34am

I think the movie studio over-estimated the draw of their products. Basically, they are hoping that desperate customers who MUST watch/rent a new movie at this VERY MOMENT would be annoyed/compelled to buy it instead of renting it. This is similar to newspapers over-estimating the importance of their content and thinks a pay-wall will force customers to subscribe.

Seriously, only perhaps 3-4 movies per year has that kind of following, and they would sell well already even without this kind of scheme. The rest of the so-so and garbage movie will continue to sell just the way it is, while the general public spit on the studios for their obvious money grab moves.

Newspapers, movie studios and music industries are controlled by older folks who understand very little of the current technology/Internet and will continue to dream up "Old ways" of doing business. They never learn.
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- Anonymous Coward, 26 Apr 2010 @ 1:16pm
  
  Re:
  I actually wonder if these moves will lead to reduced interest and sales.
  
  My thinking is this; if a movie was good enough to run out and buy, people won't bother renting it in the first place. Crappy movies, on the other hand, need to play off the marketing that happens at release and rely on rentals to produce future sales. If people see the ads but can't rent the movie, my assumption is they'll just forget about it 28 days later when they CAN rent it. So now, not only did the studios not get the sale, but they've blocked the rental which would lead to a sale.
  
  It should be interesting to see what the end result of these deals ends up being. Personally, I'm glad I have the Internet, free of release cycles...
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- Hephaestus (profile), 27 Apr 2010 @ 7:14am
  
  Re:
  "I think the movie studio over-estimated the draw of their products. Basically, they are hoping that desperate customers who MUST watch/rent a new movie at this VERY MOMENT would be annoyed/compelled to buy it instead of renting it. This is similar to newspapers over-estimating the importance of their content and thinks a pay-wall will force customers to subscribe."
  
  Its a very common rationalization to believe that something that you are passionate about is something everyone else is passionate about also. In real life most people just dont care enough to be passionate or have other things on their plate.
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Chronno S. Trigger (profile), 26 Apr 2010 @ 12:50pm

I could work
If RedBox built itself an image of classic hard to find movies then it could work. Let BlockBuster deal with the MPAA's crap.
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- Hulser (profile), 26 Apr 2010 @ 12:58pm
  
  Re: I could work
  Isn't Redbox based on vending machines which only have enough space to store the more popular movie titles? (I've never seen a Redbox machine, so I don't know.) If this is the case, then it would seem to me that you'd need a vending machine as big as, well...as big as a Blockbuster store to carry enough hard-to-find movies to make it worthwhile.
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  - Chronno S. Trigger (profile), 26 Apr 2010 @ 1:17pm
    
    Re: Re: I could work
    Yes, they are based on vending machines, but they have more room then you think. The machines are huge and they use the small CD cases so there's even less air space. They don't display the movies directly, they have a touch screen on the front that lets you pick what you want. So they probably have several hundred movies in one. Plus they don't all have the same things so one may not have what you're looking for where the other does. You can look online to see what box has what you want and can even reserve it online. They really thought it threw when they made them.
    
    This is turning into a Redbox advertisement so I'm going to shut up now.
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    - nasch (profile), 26 Apr 2010 @ 3:53pm
      
      Re: Re: Re: I could work
      I think there are way too many old and/or obscure movies for that to work. At 500 movies per box, even if there were 10 of them near you, that would be a fairly small catalog. And with one copy of each, there would always be a good chance what you want isn't in. No, they need to continue what's working - relatively new movies that a lot of people want to watch.
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  - Skeptical Cynic (profile), 26 Apr 2010 @ 1:18pm
    
    Re: Re: I could work
    The box can store maybe 200-400 or so videos. Based on size and delivery format.
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Kevin (profile), 26 Apr 2010 @ 1:10pm

Well
All that means it takes a month before I will see any of those titles. Still bought Avatar though. First DVD purchase in 3 years(Finally a movie worth paying for)IMHO.
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- Big Mook, 26 Apr 2010 @ 1:59pm
  
  Re: Well
  "Still bought the thinly veiled remake of Pocahontas though. First remake of a crappy Disney retelling of an old story in a long time".
  
  There, fixed that for ya. IMHO, of course.
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  - Anonymous Coward, 26 Apr 2010 @ 2:07pm
    
    Re: Re: Well
    I always enjoy when people try to pretend that Avatar has some deep philosophy behind it, too.
    
    - Don't be racist. Unless you really are the superior race. In which case, hate the foreigners all you want, and they'll integrate with you.
    
    - Don't hurt the environment. Because it's actually a living being that will attack you back. And not because it's the right thing to do or anything.
    
    - Scientists are always right, because everyone else is a stereotypically corrupt official.
    
    - No matter who you are or what planet you're from, some white American is still going to do it better than you. And steal your girl.
    
    - No matter how obvious it is that you're Australian, it's still better to pretend to be an All-American American.
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  - Hephaestus (profile), 27 Apr 2010 @ 7:18am
    
    Re: Re: Well
    ""Still bought the thinly veiled remake of Pocahontas though. First remake of a crappy Disney retelling of an old story in a long time"."
    
    Dude ... That is so off
    
    Still bought Avatar though. Even though its a remake of dances with wolves done with blue people.
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Skeptical Cynic (profile), 26 Apr 2010 @ 1:22pm

Make your profit where you can.
Netflix already pays an access fee and so does Redbox. The people that use both (myself included) will not pay the inflated cost to own a DVD. So get the revenue you can and stop showing us why we do not want to buy your video when we can wait and get it for 10% of the cost.
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- Danny (profile), 26 Apr 2010 @ 1:56pm
  
  Re: Make your profit where you can.
  Perhaps I am atypical, but I've stopped even renting movies.
  
  There is way more material on my 200 satellite channels than I am ever going to TiVo and watch. Lots of movies are out there.
  
  About 4 to 6 times a year I am moved to go to a movie theater and watch a movie. The rest of my time my entertainment needs are met by my TV and my computer.
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  - Greevar (profile), 26 Apr 2010 @ 3:26pm
    
    Re: Re: Make your profit where you can.
    "There is way more material on the internet than I am ever going to download and watch. Lots of good movies are out there."
    
    There you go, I fixed it for you.
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AJ, 26 Apr 2010 @ 1:47pm

Profit out the window?
I wonder how many people this drove to downloading it from a torrent site? Wait to pay, or get it online now for free.... Right or wrong, you know thats going through some peoples head.....

"The studios think they can force customers to change their behavior by controlling access to new movies. "

This is why people love to download from torrent sites. When will the studios learn?
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- Greevar (profile), 26 Apr 2010 @ 3:27pm
  
  Re: Profit out the window?
  Business rule No. 1: Don't piss off your customers or you will lose them.
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Anonymous Coward, 26 Apr 2010 @ 1:48pm

The new marketing ploy for smart movie studios
New releases that you can get wherever you want, the moment it is released! Rent it anywhere! Buy it anywhere! Stream it anywhere! We recognize you are a valued customer with limited time, so we are going to make our movies as easy to rent, buy, or watch as possible.
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Oh Well, 26 Apr 2010 @ 1:57pm

Lost sale
There are many movies that people might have rented for 1$ when the movie was being advertised, but not so much after having not bought it and forgotten about it.
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torrentmaster, 26 Apr 2010 @ 2:02pm

Why buy or rent:)
All of the really good movies are torrents before plastic anyway. Those of us who really want them now just DL, no delays on the net, ever.
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Anonymous Coward, 26 Apr 2010 @ 2:04pm

The movie studios aren't bright enough to realize that most Redbox and Netflix customers don't really buy DVDs? I certainly don't. Between Netflix on my Xbox and on demand movies for my cable movie channels I don't ever buy DVDs. It's rare I actually watch a physical DVD.
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Designerfx (profile), 26 Apr 2010 @ 2:15pm

ammunition
it's just more for them to say "dvd sales are down! we need more ip enforcement rights! seeee!" while at the same time business is up.
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Chuck Norris' Enemy (deceased) (profile), 26 Apr 2010 @ 3:05pm

Ban rentals!
If there were no such thing as rentals then the only option would be to buy the DVD...or torrent. Choose your demise!
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- most movies are not worth the price, 26 Apr 2010 @ 3:25pm
  
  Re: Ban rentals!
  "buy the DVD...or torrent. Choose your demise!"
  
  or forget about the movie
  read a book
  or something
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  - Greevar (profile), 26 Apr 2010 @ 3:29pm
    
    Re: Re: Ban rentals!
    Spend time with your family? Bah, that's so 20th century!
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Simple Mind, 26 Apr 2010 @ 4:32pm

why would anyone still buy movies?
The great thing about streaming is you don't have to own videos anymore and still can watch them whenever you feel like it. No more organizing your dvds and having to lug them around when you move. No need to waste hard drive space to keep a copy, either. I cannot see why anyone would want to keep a collection of movies given the ability to instantly stream them. The only thing is that streaming doesn't include the extras that are on dvds. Commentary and deleted scenes can sometimes be fun.

As for Avatar, I haven't seen it yet. It is on top of my netflix queue but it probably will not show up until after August given past experience. I can live with that. What is crazy is that they still need to send me a dvd. Netflix doesn't stream new releases right away for some unknown reason.
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- Joe Flix, 27 Apr 2010 @ 7:51am
  
  Re: why would anyone still buy movies?
  Netflix doesn't stream new releases right away for some unknown reason.
  
  That reason begins and ends at the doorsteps of the studios, and their bizarre attachment to "availability windows".
  
  I think it's even been discussed here, but the word is that Netflix is agreeing to these deals in order to increase their catalog of streamable movies from the movie studios. IIRC, it's pretty well known that Netflix's broader plan is to eventually be a streaming service first, a disc provider second.
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- Joe Flix, 27 Apr 2010 @ 8:00am
  
  Re: why would anyone still buy movies?
  Netflix doesn't stream new releases right away for some unknown reason.
  
  That reason begins and ends at the doorsteps of the studios, and their bizarre attachment to "availability windows".
  
  I think it's even been discussed here, but the word is that Netflix is agreeing to these deals in order to increase their catalog of streamable movies from the movie studios. IIRC, it's pretty well known that Netflix's broader plan is to eventually be a streaming service first, a disc provider second.
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MovieGuy (profile), 26 Apr 2010 @ 5:13pm

You can still get the movies at you local video store for rent. Redbox did this because they want the movies for cheaper. Seriously, if people could really wait, then why does the theatre make money, they should all be out of business by now, cause people should be able to wait till it's video..... REDBOX makes me sick
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- Anonymous Coward, 26 Apr 2010 @ 6:47pm
  
  Re:
  I can definitely see why TAM stopped posting using an account. I mean, look at this guy, it's so easy to follow his money trail.
  
  Sorry pal. When your price point doesn't match the market, you lose business. Welcome to reality. When Blockbuster's dead and gone, we won't mourn it.
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Justin, 27 Apr 2010 @ 6:23am

Keeping up with new releases
Did they ever think about the idea that some people use Netflix and Redbox to keep up with the new movies that are coming out and the release date? That is what I do, When I see the movie is available on Netflix I know the DVD is released. If they don't want to tell me for 28 days that I can buy their movie, fine, I'm not going to think about buying it. Pretty sure they are working against the marketing department on that one.
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yourdumb, 27 Apr 2010 @ 7:19am

You obviously know nothing about the video industry to even write this article. You act like this will not push people back to Brick and Morter stores or retail. How could it not Amarica is a I want it now society.
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- Hephaestus (profile), 27 Apr 2010 @ 8:04am
  
  Re:
  "Amarica is a I want it now society."
  
  America is an apathetic, I will get it when I get a chance to society. I know I live here. Entertainment in the US has changed and the trends are becoming very clear.
  
  We are getting our news through aggregators and our friends. In 20 years when the young smart phone and iPad weilding types are the ones doing the spending the news papers will die and people will be getting personalized news from specialty sites and Rss feeds.
  
  Currently people can request movies that they want to see months out. This trend is growing and will continue to grow. More low cost rental and streaming companies will crop up. New on demand services will show up with services that allow people to say "when this movie costs this much or is free I will watch it". Prices will continue to fall. Studio and label profits will continue to decline as more efficiencies work their way into the system. As the technology becomes easier to use more individuals wil begin making movies and shows. The quantity of shows, movies, and music available will increase slowly drowning out the studios and labels.
  
  Increased competition for entertainment dollars, declining profits, decreased costs for making films and music, all are trends that will continue. It doesnt bode well for the 200 million dollar movie, the labels, or the studios.
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f182 (profile), 27 Apr 2010 @ 8:49am

If I have to wait 28 days till Redbox has the movie I'll wait. Or maybe I'll just forget about that movie altogether. I'm not going to buy a DVD in either case.
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- Hephaestus (profile), 27 Apr 2010 @ 9:20am
  
  Re:
  Go for netflix and put the DVD in your queue.
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jman, 28 Apr 2010 @ 11:23am

I haven't bought a DVD in years. I've bought a few MP3s off amazon because they're a buck!
I can wait but will more then likely just not bother watching the movie at all or maybe months later.
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MovieGuy (profile), 28 Apr 2010 @ 5:55pm

Waiting is easier said than done
first off, why wait. Most people work very hard, and if spending a few bucks gets you new entertainment, it's worth it. Some people are so cheap, they think everything should be a goodwill prices.... you probably have no jobs, and stay home with mom & dad, that's why 2.99 at blockbuster for 3 days is so expensive compared to the $1 a day at redbox.... my god, maybe i should just sell my car and buy a bike, because gas is $3 a gallon now... and torrent, why the hell would anyone buy a dvd player, HD TV and watch a movie that worse picture than a VHS. boggles me, I think REDBOX & Netflix are JOKE, 28-days wait, when it at Blockbuster day of release makes no sense to me. I will go to my independent video store. BTW, if New Release are not important, then why do we need Theatre and bit torrents.... we should just keep watching the old crap day in and day out.
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Greg, 30 Apr 2010 @ 7:25am

How will this accomplish anything unless they hold Blockbuster to the same terms? Won't this just drive business to Blockbuster?
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Jeff Stockton, 24 May 2010 @ 11:58am

you guys are missing the point
You guys are all pretty much missing the point. The studios know Netflix customers won't buy. But they may rent on pay per view. They want that revenue since they get something like 60% of the pay per view revenue.
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Paul, 21 Sep 2010 @ 7:07pm

I don't know what they are thinking
I have a blu-ray player but do not own a single blu-ray. I will only watch hd movies, in 7.1 if possible. I rent all my movies, 90% being net flix. Will not pay for an on demand movie. I am one who rents a movie once, maybe if it was really good, twice. I don't know what they are thinking doing this. There have been many times where I have been waiting to "see" a movie but by the time it comes out I am over it. I will guarantee making me wait an extra 28 days will actually make me pass to a newer movie every time. Now, their movie does not get watched, does not get talked about, does not even get remembered. I guess it is there loss because I don't have the time to watch every movie that comes out anyway.
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