Warner Bros. Claims That Annoying Customers With 28-Day Rental Delay Is Working

from the correlation? dept

Warner Bros. studio was among the more adamant about getting Netflix, Redbox and others to delay rentals of movies until 28-days after the DVD release, in the hopes that it would drive more people to buy. We suggested that was pissing off customers, just at a time when they're discovering they have (perhaps not very legal) alternatives, and it probably isn't a great business strategy. However, Khyle points us to the news that Warner Bros. CFO is claiming success with the program, claiming that DVD sales are up 15% following this strategy.

Of course, that leaves out all sorts of important details. Beyond the simple correlation ≠ causation issue, there are so many other variables here, I'd be hesitant to believe that the higher sales were due mostly to this delay. Perhaps there was just a popular movie that people really wanted to own when it came out. Or perhaps there were other promotions. Or, maybe, it's just a dead cat bounce. Either way, let's wait and see before declaring that pissing off your customers so much is a good idea.

The best part, though, might be the confident quote from the guy:

"You make money in the film business by putting your content in appropriate windows that matches up with the way consumers like to use it."

Thing is, he's got it wrong. It's not the "windows," but the different convenience and values that people consider. You can offer "the way consumers like to use it," all at the same time, if you want. The studios aren't doing this because they're so in love with the "windowing" system as a way to price differentiate, that they keep wanting to introduce more and more windows. At some point they'll realize that this is really dangerous short-term thinking. Pissing off people eventually comes back to bite you.

Filed Under: delays, movies, windows
Companies: netflix, redbox, warner bros.

Microsoft's Patent On Fast Shutdowns Shows Why Windows Is So Slow To Shut Down

from the you-need-a-patent-for-that dept

A bunch of folks have sent over the story of how Microsoft recently patented its method of shutting down Windows (7,788,474), which plenty of people are mocking for all sorts of reasons. Reader Prashanth points out the fact that the patent actually helps demonstrate why Microsoft's shut down process is so slow. The whole thing just highlights how companies these days file for completely ridiculous patents just to pad their patent portfolio, and potentially to block others from doing pretty obvious things.

Filed Under: operating system, patents, shutdown, windows
Companies: microsoft

Freakonomics Flips The Window: Releasing Movie Online Before In Theaters

from the freakout-those-windows dept

We've talked numerous times about the movie industry's love affair with release windows, where they basically try to get people to pay for things multiple times by releasing them in different formats at different times. The first window, normally, is the theatrical release -- and the theaters go absolutely livid if anyone suggests shortening the theatrical release window. Heaven forbid anyone go so far as to suggest something as "radical" as a so-called day and date release, where it's released in all formats at the same time, and watch the theaters go ballistic and boycott the film, as a startling admission that they don't think they can compete with home theaters.

So, it's quite interesting to see that the Freakonomics movie that's coming out in the fall is apparently going to flip the windows over. Sheri Candler points us to the news, as seen at the end of the movie's trailer, that it's going to be released via iTunes on September 3rd, and in theaters October 1st: Yes, it's being released online before it's released in the theaters. This isn't exactly the first time this has been tried. Magnolia Films, who produced the Freakonomics film is trying something similar right now with the film Centurion, which was released via On Demand cable systems a few weeks back, and is about to come to theaters. Still, this is pretty big news. In mentioning this reversed window, Freakonomics author Stephen Dubner mentions that there's also another "wrinkle to the release schedule," but he's not revealing what it is just yet.

I'm curious about this, because what the Freakonomics duo are famous for is exposing how "the common wisdom" is wrong on a variety of things. I don't always agree with their analysis, but it would be fascinating to see if they're exposing that the common wisdom on movie release windows is -- as we've suggested for years -- totally screwed up. I am curious, however, to see how the theaters handle this. As mentioned, in the past, they've boycotted day-and-date releases, and even boycotted movies that they thought were coming to DVD too soon after the theatrical release (in that case, 12 weeks). So, will theaters be boycotting the Freakonomics film? I really don't know enough about how the film is being positioned, so if it's only in indie/art house-type theaters, perhaps it's not as big an issue. Still, I can't see any of the big theaters too happy about these "wrinkles," even if they actually prove that theaters can get more business with simultaneous releases.

Filed Under: freakonomics, movie releases, online, windows
Companies: magnolia films

Warner Bros. Latest Movie Release Strategy? Confuse The Hell Out Of The Market And Prop Up Blockbuster?

from the at-least-that's-what-it-appears-to-be dept

It's tough to figure Warner Bros. out these days. It got both Netflix and Redbox to agree to delay renting new release movies for 28 days in an effort to get more people to purchase DVDs. For this, it got hit with a class action lawsuit. But now comes the news that it's signed a new deal with the financially troubled Blockbuster that has no such restriction. This has lots of people scratching their heads. The obvious answer is that Blockbuster is promising Warner a lot more money...

But there's a bigger issue here, which goes beyond just commentators scratching their heads: this is going to confuse a lot of customers at a time when that's the last thing Warner Bros. should be doing. Your average movie renter isn't paying attention to the silly games that Warner execs are playing, and all they want to know is how come they can't rent the latest release. If Warner somehow convinced all players not to rent until a certain date, then that would effectively have just shifted the release date further back (a dumb move in an age when windows are shrinking... but that's Hollywood for you). However, by having the movie available for rental in some places, but not others, it's now setting itself up for mass customer confusion, where people will hear that a movie is available, but then get pissed off that it's not available in their preferred rental system.

It's as if the folks in Hollywood haven't been paying attention to what happens to companies that aren't providing what their customers want.

Filed Under: dvds, movies, rentals, windows
Companies: blockbuster, netflix, redbox, warner bros.

Netflix, Warner Bros., Sued In Class Action Lawsuit Over Delayed Movie Window

from the pissing-off-customers-left-and-right dept

Warner Bros. has been busy getting both Netflix and Redbox to agree to delay renting new release DVDs for 28 days, in the misguided belief that this will get more people to buy the DVDs. While Netflix has tried to spin this as benefiting customers it appears plenty of customers see otherwise. Specifically, at least one customer has filed a class action lawsuit against both Warner Bros. and Netflix, alleging that this is restraint of trade and has decreased the value of a Netflix subscription (thanks to Eric for sending this over). It seems unlikely that this lawsuit will get very far, but it certainly suggests that at least some Netflix customers are none too pleased with this move, despite Netflix's claims.

Filed Under: class action, delays, movies, rentals, windows
Companies: netflix, warner bros.

Odeon Cinemas Admit The Experience At Their Theaters Is So Bad It Can't Compete With Your Home Theater

from the can't-compete? dept

We've seen this before, but it's still really incredible. The Odeon movie theater chain is apparently refusing to show the new Alice in Wonderland film, directed by Tim Burton, in the UK, Ireland and Italy, because Disney is (smartly) trying to shorten the "window" between the cinema release and the DVD release. Basically, what Odeon is admitting here is that it knows the experience of going to its theaters is so bad that it simply can't compete with watching the movie at home. This is a rather stunning admission by Odeon and probably should make you think twice before going to any Odeon theaters.

The reason that the box office had its best year ever last year was because people like going out to the movies, for the experience, even if they can watch the movie at home. Odeon's admission that it can't compete even with a 12-week head start is really incredible. Disney isn't even really pushing the bar that much. Many of us believe that there shouldn't be any window at all, but Disney is just trying to reduce the window on this movie from 17-weeks down to 12-weeks. And Odeon is giving up all the revenue from people wanting to see the movie because it's afraid it might make slightly less in just 12 weeks? This makes no sense at all. Not only is Odeon guaranteeing no revenue at all from this movie, it's publicizing the fact that it believes its theaters aren't worth going to.

Filed Under: alice in wonderland, competition, movies, releases, windows
Companies: odeon

Redbox Caves To Warner Bros., Will Delay New Movie Releases From Kiosks

from the dumber-and-dumber dept

Some of the movie studios (admittedly, not all of them) have been on a braindead fight against Redbox -- despite the fact that Redbox had created a service that people liked and were paying for and that generated revenue for the movie industry. There are still ongoing lawsuits, but today came the news that Redbox caved to Warner Bros., on the most important point: delaying the availability of new release movies until 28 days after the release. Yes, this is the same deal that Warner Bros. convinced Netflix to agree to last month. Basically, Warner Bros. is telling people to either not rent its video or to download them from an unauthorized source.

The whole thing makes no sense at all. Warner Bros. mistakenly thinks that if people can't rent a particular DVD in the first four weeks of release, they're more likely to shell out money to actually buy the DVD. This is Warner Bros. pretending that it can influence customer behavior by denying them what they want. That's a strategy that has never worked well. What this means is that at the moment when Warner Bros. actually puts some marketing effort behind the DVD release, that movie will not be available from the most popular rental options. And, the bizarre reasoning put forth by Netflix that this would benefit customers by improving inventory and availability of movies is not seen in reality. So rather than pissing off some customers because a movie is not available, you're now pissing off all customers by making the movie not be available on purpose, and then effectively massively increasing the amount of time they have to wait to see the movie? Does no one at Warner realize that a lot of those "customers" will simply decide to go see other movies or to download an unauthorized copy instead?

Based on Warner Bros., logic here, why release movies at all?

Filed Under: delays, kiosks, movies, releases, rentals, windows
Companies: netflix, redbox, warner bros.

Bollywood Movie Released On YouTube Same Day As Theatrical Release

from the day-and-date dept

The whole concept of "windowing" movie releases makes little sense. It's as if the movie industry purposely wants to make sure customers don't get to consume the content in the format that fits them best at the time when they're putting the most money behind a marketing campaign. It's hard to fathom why they do this, other than the pressure they get from the movie theater companies (which is silly, because the theaters would benefit from this too). Every so often, though, we hear about a moviemaker who seems to understand how to better reach out to an audience. Pranav points us to the news of a new movie out of Bollywood that is being released on YouTube at the same time as its theatrical release. There is a big caveat though: the YouTube videos are only available for international, rather than domestic (Indian) viewers. Also, it looks like US viewers will have to pay to rent it via Google's new YouTube rental program, but those in any other country (outside of the US or India) can view it for free. It's not necessarily ideal (and there doesn't seem to be much of a business model behind the free viewings), but at least it's a step in the right direction.

Filed Under: day and date, india, movies, online, windows, youtube

Does French Three Strikes Law Also Mandate Movie Release Windows?

from the if-so,-why? dept

The EFF points us to a story claiming that the Blu-ray edition of the movie Avatar is being released earlier than the studio would like due to France's three strikes law. The article claims that, while most folks have concentrated on the three strikes part, the law also requires limited release windows, such that studios need to release films on DVD within a certain time period after theatrical release. I certainly had not heard this, and some challenged the claim in the comments, but the original blogger points to the specific language in the statute. While some others point out that the window for release is pretty large (longer than pretty much every other movie ever uses), it makes you wonder why France is legislating this at all. I'm all for shorter movie release windows -- and think studios should get rid of the windows for the most part -- but I can't fathom how it could make sense to mandate a specific time for release windows in the law.

Filed Under: france, movies, three strikes, windows

Netflix Exec Claims That Delaying Movie Rentals For A Month Benefits Customers

from the assuming-you-didn't-want-to-see-that-movie-when-it-was-released dept

With Netflix caving in to Warner Bros. and agreeing to delay offering DVDs for 28 days after release in order to get movies to stream online, it certainly pissed off a bunch of Netflix subscribers. But, you've apparently got it all wrong. A Netflix exec is now trying to explain how the deal is pro-customer because it will keep demand down for the DVDs, meaning that when they finally do come out, you may have a better chance to rent them. Seriously:

The most practical reason is that the savings derived from this deal enable us to be in stock completely on day 29. Remember that we're a subscription service and the way that you manage the economics of a subscription service is to manage the demand of any disc, depending on the economics of the disc. In the case of the most expensive disc, which in this case is a Warner Bros. disc, purchased through a 3rd party, those discs were out of stock for far longer than 29 days for most Netflix subscribers.

So what were able to is create a deal with them that gave them a little open running room in terms of creating a sell-through window ahead of rental, for us, and hopefully that they'll find enough value in that it'll extend to other retailers and other studios will take note and it'll extend across other studios as well. The net savings derived from technically creating a better customer experience have been redeployed in additional streaming content for all customers.

I'm still trying to parse this, but it really does sound like he's saying that Netflix couldn't handle the demand for new releases before, so by getting rid of them entirely, it may be able to handle them on the 29th day, since fewer people will care about renting that movie then. Now, you could claim that's a better customer experience if you ignore the 28 days in which no one on Netflix can rent the movie (though they can get it elsewhere). But if you realize that you're now taking away the ability to serve all of your customers for nearly a month at the point when their demand is likely to be the highest... well, that doesn't seem very customer friendly at all.

Filed Under: delays, dvds, rentals, spin, windows
Companies: netflix, warner bros.