WB, HBO Continue To Suck At Economics; New Policies Encourage Piracy
from the do-they-not-realize-this? dept
A bunch of folks have been submitting variations on two stories from last week that show -- yet again -- that the big legacy entertainment industry companies suck at economics. AdamR was the first to send over the news that Warner Bros. studio was increasing the "delay" period for rentals. If you don't recall, WB has been at the forefront of this braindead idea that, if it forbids Netflix, Redbox and Blockbuster from renting videos, maybe more people will buy the DVDs they release for sale. Of course, other studios took the time to study the matter and found that such a delay in rentals doesn't increase sales. Meanwhile, a separate study showed that such windows do increase infringement, as those who are perfectly willing to pay the price to rent, find the price to buy ridiculous... and seek alternatives.It appears that WB is implicitly admitting that the strategy of delaying the rental period of a movie by 28 days has been a total failure, in the decision to increase the delay to 56 days. They're basically admitting that not enough people were "buying" in those 28 days... so they somehow think that doubling the wait will increase the purchases. It won't. If people really want to pay the extra money to buy the DVD, they're likely to do so pretty early on. It's not like they're waiting 50 days in and then saying "gee, I can't rent the movie, so I'll just pay a lot more money than necessary to own an obsolete piece of plastic."
Meanwhile, HBO, coming out of the same corporate lineage as WB, has decided to stop selling Netflix the DVDs of its shows. Netflix, of course, notes that it can get these DVDs from other sources, but it makes you wonder what HBO thinks it's accomplishing here. Pissing off its fans on Netflix by trying to force them into HBO's own annoying walled garden doesn't help build fans. And if it does actually lead to Netflix not offering HBO shows, then as plenty of commentators quickly noted, all they're really doing is encouraging more infringement.
This is basic stuff at this point. Not offering your content in simple, legitimate formats that the customers want doesn't help you at all. It just drives people to infringe. How does that help in any way, shape or form?
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: delays, hbo, movies, tv shows, windows
Companies: hbo, netflix, redbox, warner bros
Reader Comments
Subscribe: RSS
View by: Time | Thread
Is Jack Valenti still around? Do people still believe in his line that "The VCR is to the movie industry what the Boston Strangler is to the woman alone at home?" and thus want to get rid of home viewing?
And Netflix...here we have the single greatest weapon against infringement, that has MORE INTERNET TRAFFIC in the US than Bittorent...and they're trying to limit the shows it can receive. Do they think that Netflix is making money that ought to go to them? Have they not seen the fact that it pays obscene amounts in licensing deals to them?
[ link to this | view in chronology ]
Re: Braindead Reflexes
I suppose it might be possible to cause rapid change be getting rid of the "deadwood", but murder is illegal, so I'll just wait.
[ link to this | view in chronology ]
Re: Re: Braindead Reflexes
Well, the **AA have shown us the way around that. Buy a law to legalise shooting someone for being an uncommonly stupid fuckwad.
[ link to this | view in chronology ]
Re: Re: Re: Braindead Reflexes
Sell it as "We have to protect the genepool".
[ link to this | view in chronology ]
Re: Re: Re: Braindead Reflexes
I hate to imagine the unintended consequences on that one.
Do you have to demonstrate over time that you are an uncommonly stupid fuckwad, or does every moment count? What if you have a bad day, or you make a singular mistake at a moment of neglect?
I figure throughout my life I've been an uncommonly stupid fuckwad at least at some moment. Usually before I drink my coffee in the morning I can be pretty stupid.
[ link to this | view in chronology ]
Re:
Just like a good joke can be spoiled if the wrong person tells it.
Let Netflix et al deliver and focus on creating. You don't go to your lawyer for a medical exam...
[ link to this | view in chronology ]
Re:
In short, yes. They (and others like them) have convinced themselves that all of the value is in their content, and they utterly ignore any value that someone else might add. If you make money and their product was somehow involved, you've stolen from them.
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re: Re: Re:
But that doesn't alleviate the problem - if WB partnered with someone, then that partner is making money off their content, and thus they are stealing from WB!
This isn't a case of something that can be fixed - it's inherent brain damage on the part of WB.
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
We the 1% need more money
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re:
That's the business model, apparently.
[ link to this | view in chronology ]
Now being able to rent it for a couple dollars I may find that I enjoy the movie enough to buy the disk (or not). But delaying the availability of that rental isn't going to drive me to buy the disk.
Now I'm not one to go pirate the movie either. I'll wait for it to be on RedBox or perhaps On-Demand. I suspect this is more about supporting On-Demand from the cable companies than it is about selling physical media (at least for WB).
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Spokesmen for the oft-idiotic content companies stated that they previous 28-day window had shown little effect on piracy numbers or DVD sales but felt that they could make it up in volume by doubling the size of the window.
"We feel that the average consumer will likely forget about our new product within 56 days, meaning we'll see no additional revenue from the rental and streaming markets as well," stated the spokesman before trailing off into an incomprehensible mumble while updating his resume on his Blackberry.
Further requests for comment were drowned out by horrified shrieks of "OH MY GOD I DON'T HAVE ANY OTHER 'MAJOR SKILLS'!!!" and embarrassingly loud sobbing.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re: Re: Re:
[ link to this | view in chronology ]
Oh I know!
Because it helps them show 'losses' due to piracy and makes it easier to get laws like SOPA/PIPA passed.
[ link to this | view in chronology ]
Re: Oh I know!
[ link to this | view in chronology ]
Wait, wait... I think I got it...
See, since we have to wait 56 days after the DVD is released before we can rent the movie and see if we like it, the chances that the movie has fallen into the $5 bin at Wal-Mart is significantly increased. Thus, WB is just trying to make sure that we pay the lowest possible price for movies.
See? They're actually being nice to us....
/crap, I almost believe that.... lol
[ link to this | view in chronology ]
1. The people in charge of the movie and music industries are complete idiots who have their heads very safely hidden up their own ass. (This is the "good" scenario)
2. The people in charge of the movie and music industry are so drunk with power that they will actually make moves like this that they know will drive up piracy all in an effort for more control. See the more they drive up piracy the more they have to "cry" about and beg Washington to fix.
Somehow I think it is probably the second option, and that is down right scary.
[ link to this | view in chronology ]
Re:
3) Scenarios 1 and 2 are both correct.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Delay windows.
[ link to this | view in chronology ]
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
Wrong. First sale says I can do whatever I want with things I purchase, including DVDs. That includes selling, lending, or renting them to other people. Copyright has nothing to do with it.
If the big media players want to go down the licensing road, they will be f*cked. Can you imagine the backlash if they try and tell people what they can do with stuff they bought?
[ link to this | view in chronology ]
Re: Re: Re:
The only reason libraries exist right now is because A: courts have repeatedly enforced their right to exist, and B: if they REALLY tried to get the shut down, their would probably be literal riots that would end in one or more major studios burned to the ground.
[ link to this | view in chronology ]
Re: Re: Re:
/sarcasm
[ link to this | view in chronology ]
Re: Re: Re: Re:
[ link to this | view in chronology ]
Re: Re:
I believe you are incorrect in this instance.
If Blockbuster is purchasing the physical DVD, therefore under the First Sale Doctrine, they have the right to rent it out without any further licensing from the rights holder.
Streaming movies online is a completely different story because it's legally considered a "performance" and additional performance licenses are required.
(eyeroll) right back at ya.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re: Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
I am willing to bet they are perfectly willing to offer one of the companies earlier access to "rental only" stripped down discs for a higher fee sooner.
They want to extract all of the cash they possibly can, even to the detriment of their company to make sure they are getting the maximum (and then some) they can possibly hope for.
They think they are still in the business of selling expensive plastic cartridges.
They think there is nothing else out there that the people have access to.
They will complain more about sales dipping as they increase the time consumers have to forget their product and interest in it.
[ link to this | view in chronology ]
I does help. It reduces their profits and makes them less relevant. In the long run, continuous bad business decisions will be the death of the legacy content companies.
With the (soon) addition of motion tracking to blender, and virtual sets, every tablet can be a movie studio. Once this becomes drop and drag the studios will have to worry about more than cat videos on Youtube. They will have to worry about true competition from a several billion people.
[ link to this | view in chronology ]
'It just drives people to infringe. How does that help in any way, shape or form?'
by giving idiotic politicians like Lamar Smith more ammunition to further his efforts on getting SOPA into law! you know the rules. when you cant use any legitimate reasoning, use whatever lies and stupidity you can find instead!
[ link to this | view in chronology ]
Blockbuster and on-demand services pay a premium for the early release dates, and I am sure the front-end cash plays a part in the decision to go with delayed release dates.
However, Blockbuster is shrinking and continuing to hemorrhage. On-Demand is tied to an industry that is just starting to wake to the reality of cord-cutting, and even Best Buy's days are numbered if you read some of the current financial press.
[ link to this | view in chronology ]
MAFIAA doctor: DOUBLE THE VENOM DOSE.
Ahem... No surprises right? We know MAFIAA is managed by a bunch of braindead idiots.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
(Month later...)
My plan didn't work. So I'm going to continue punching my customers in the back of the head while jabbing a shiv into their spines. That'll work.
[ link to this | view in chronology ]
I have an HBO subscription, but I still get most of the stuff I like on HBO from a download site, it just allows me to watch them when I want to without filling up my hard drive with Windows PVR files. Most of the shows can be had in MKV format that look just fine on my HDTV.
So all I can say is good luck HBO/WB.
If netflix were a good source of Blu-Ray I would go with that right now.
[ link to this | view in chronology ]
I'll pay my netflix/blockbuster subscription if it means I can watch on my tv, pc, laptop, phone, tablet, xbox, and wii. If it means I need to shell out another $20.00 bucks to watch a dvd that I can only watch on my TV/dvd player, then I'll find a more convenient way to watch it.
Who really buys DVD's anymore? I watch a movie once, and that's it. I guess you could say it's a force of habbit that the movie industry has engrained into my skull. Why go to the theaters more than once to watch a movie... far too expensive. Watch it once, and remember the ending.
[ link to this | view in chronology ]
No no no
All the movies we release are just so wonderful that they create an insatiable demand. We can force people to pay a premium for the DVD as they just can't wait for the rentals to come out.
Making them wait even longer will obviously have the effect of building the anticipation to uncontrollable levels and will force the revenue through the roof.
What could go wrong?
(The fact that if they were just not that excited enough to go and see the movie, they will not be excited enough to by the DVD is beside the point.
Also beside the point, is that a lot of DVD sales are built on the back of seeing the movie and liking it so much they want a copy to watch at home, and making them wait extra time will just lose that excitement.)
[ link to this | view in chronology ]
Burn down the store to protest that some people aren't shopping there...
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
Little money? Or not enough money to satisfy those huge coke & hooker vices?
Based on what I have gleaned about the VHS era the studios sold the tapes for around $100 each and then later it was a profit sharing system, where the tape was really cheap but the studio got 40% of the rental income. Now multiply that by 30 or 40 copies at each store times the number of stores (and they were on every street corner in every city and town then) and that adds up to a whole shitload of money.
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
If rentals are making a loss, why isn't the solution making rentals available more quickly to take advantage of the window of interest?
[ link to this | view in chronology ]
[ link to this | view in chronology ]
SOPA/PIPA = WAR
Boycott them and Censor them from your Wallet.
Buy used physical products and help bring down the MPAA & RIAA !!!
[ link to this | view in chronology ]
Re:
There is only one problem with this. The physical products are fungible. If no one buys new, then there won't be any used products available. While this works currently, the end game wouldn't work. The only way for this to work is to not buy new or used.
[ link to this | view in chronology ]
I think you're totally misreading the intent of this announcement. The 28-day delay have been so successful that WB wants to take even more advantage of the phenomenon, and they're doubling the wait period so that they can double the harvest! They're brilliant
HBO's dumb, though. If it wasn't for Netflix, I would have forgetten they exist by now.
[ link to this | view in chronology ]
HBO overcharges for everything
[ link to this | view in chronology ]
Re: HBO overcharges for everything
[ link to this | view in chronology ]
Re: Re: HBO overcharges for everything
[ link to this | view in chronology ]
Re: Re: HBO overcharges for everything
[ link to this | view in chronology ]
Re: Re: HBO overcharges for everything
[ link to this | view in chronology ]
Re: Re: HBO overcharges for everything
[ link to this | view in chronology ]
Re: Re: HBO overcharges for everything
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Alternative
Artificial supply delays benefit the public none when it is all about trying to maximise profit. It is the same concept that leads to zoning or artificially separated markets.
We can only be thankful there is an alternative so in the end they wise up simply because only good actions, and not a monopoly, now benefits their sales.
[ link to this | view in chronology ]
Re: Alternative
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Double the wait, double the discount?
[ link to this | view in chronology ]
Some money, or no money?
[ link to this | view in chronology ]
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
Re:
[ link to this | view in chronology ]
[ link to this | view in chronology ]
POINT
Between, VCR tapes, and DVD selections, then UPGRADING all the VCR tapes to a medium you can watch on DVD...
I know people who have entire walls COVERED by the paid for recordings, tapes/dvd... They are NOT good insulation.
Many have gone to rentals. for many reasons.
no more wasted space
Cheaper
get it when you want to Watch the movie, you can rent it 2-10 times, for the cost of buying it.
Unless you kid is addicted to it, RENT IT.
Unless you want a COLLECTION of certain movies/artists/actors/.. RENT IT.
Myself.
I cant see why they cant just BURN the movies to disk, ONSITE and hand you a disk with 2-4 movies on it..
it would reduce costs 10 fold. Just GIVE them the disk for $2-5, and dont worry about returns.
Then make 2 forms..the MP2 format(uncompressed) for collectors(full priced buyers) and the MP4 format(compressed, most NEW players can play it) for renters.
These folks are like 2 year olds, running around trying to FIX something, and not knowing the TECH available. They are throwing MUD at a hole in a dike. and only making it worse.
[ link to this | view in chronology ]