DirecTV Pays Studios To Help Confuse Customers Further

from the restrictions-may-apply dept

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.

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

Netflix Agrees To Delay Fox And Universal New Releases, Annoy Avatar Fans

from the let's-make-it-harder-for-the-consumer-to-access-our-product dept

Netflix recently decided it would be a good idea to strike a deal with Warner Brothers that involved delaying all new Warner Brothers releases by 28 days. Film industry executives somehow believe this strategy is going to help them sell more DVDs, though as we've been discussing, the deal as designed seems just as likely to confuse the hell out of consumers as it tries (and fails) to prop up less innovative companies. Why would Netflix agree to such a deal? It was the only way they could get Hollywood to loosen their vice-like licensing grip on the number of titles they allow Netflix to stream via broadband.

Of course the deal doesn't apply to Blockbuster, who ponied up the cash to the studios so they can apparently mock Netflix and Redbox in advertisements instead of actually innovating. None of this, including the fact that Netflix is facing a class action lawsuit, has apparently fazed Netflix or the studios -- as Netflix has now signed similar delayed-release deals with both Twentieth Century Fox and Unviersal Studios. As with the Warner Brothers arrangement, this will ramp up Netflix's access to both studios' libraries for streaming, though it looks like it won't necessarily save Netflix any money:

Netflix says its deal with Universal will give it the "benefits of reduced product costs;" it does not make a similar assertion about Fox. Both deals do however let Netflix build up its instant-streaming catalogue. Fox, for instance, says it will make all prior seasons of several hit TV series, including 24, Bones and King of the Hill, available to Netflix instant-streaming subscribers, while Universal says it is doing the same with some "premium domestic titles," like Gosford Park.

Not too surprisingly, the press release announcing the deal tries to pretend that the deal is about "providing consumers with attractive options" when it does the exact opposite. Netflix goes on to insist that by restricting how consumers can consume studio content, they're actually making film delivery more "flexible" and "convenient" and that the deal is just "a win all around."

Granted, Netflix customers who really only use Netflix's streaming service may not care about this, especially if they're not all that interested in new releases. Still, that doesn't make keeping your product out of customer hands any smarter of a business plan when you're trying to compete with piracy. One of the first major titles to be impacted by the deal will be Avatar, which thanks to this "convenient" deal won't be available on Netflix in any form until 28 days after its April 22 street release date. Customers annoyed by that delay might go buy the DVD, or hey, they might just go download it via Bit Torrent, where they aren't forced to wait for no particularly good reason.

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

Hollywood Removing Hit Movies From Apple, Netflix

from the stupidity-knows-no-bounds dept

Some days you just wonder if entertainment execs wake up in the morning planning to shoot themselves in their collective foot. The latest display of entertainment exec short-sightedness is that the Hollywood Studios have apparently forced both the Apple iTunes store and Netflix's download store to remove certain movies just as they're getting close to being available for TV. As you probably already know, Hollywood makes a lot of money through a "windowing" system, where they release movies in different formats at different times: theaters, special locations (airplanes, hotels), DVD, cable and finally network TV. Of course, they're working on adding some more tiers to this as well, but apparently they convinced these online download stores that they need to kill certain movies as the timing reaches where the movies can appear on TV.

The studios' myopic reasoning is that TV broadcasters pay a lot of money for those rights, and they don't want to piss them off: "It wouldn't make any business sense to do it any other way," claiming that allowing the videos to be downloaded via these online stores would kill some of its biggest money makers. Of course, this makes no sense. The movies are already released on DVD and the studios don't prevent Blockbuster or Netflix from offering the physical DVD for rent, so why do that with the download version? If people really want to download these movies, they're more likely to just go get them from an unauthorized site, rather than bother to watch the network broadcast version (which, given recent MPAA statements, they'll probably try to prevent you from recording via your DVR anyway). If TV networks have been willing to pay good money for the broadcasting rights all these years while DVDs and unauthorized downloads have been available, are they really suddenly going to stop paying because legal downloads are available? Unlikely.

So what are we left with instead? A bunch of consumers really pissed off at the movie studios yet again. One of these days movie studio execs will discover that business models are much harder to implement when a large percentage of your customers hate you.

Filed Under: competition, downloads, movies, release windows
Companies: apple, netflix