Warner Bros. Gets Netflix To Delay Movies; You Don't Save Your Business By Pissing Off Your Customers

from the this-is-a-mistake dept

While not a huge surprise, it’s worth discussing just how bad an idea it was for Warner Bros. Studios to get Netflix to delay renting DVDs of its movies for 28 days in order to offer up more streaming content. To recap, the very, very, very confused movie studios seem to think that the way to deal with increasing competition is to just add more windows to releases — and one way to do that is to delay when you can rent a movie. In the studios’ incredibly short-sighted thinking, they believe this will make more people buy DVDs — the one area of the movie business that has been on the decline of late. At the same time, the studios have been pissed off at Netflix for routing around them and getting rights to stream movies from Starz, and as such, have been denying requests to stream more movies.

So, the compromise is getting Netflix to delay the rentals in exchange for more streaming content.

It’s hard to express just how bad an idea this is for Warner Bros., and how far out of touch with their customers they must be to think this makes any sense from a business standpoint. What they are saying is that they are not going to give in to customer demand and offer them what they want, but actually make it more difficult, more annoying and more confusing for them to get what they want — and (at the same time!) screwing up basic marketing plans as well. Now, when movies are released on DVD and the large group of people who prefers renting to buying goes online to their Netflix account to do so, they won’t be able to. Four weeks later, they’ll be looking for something else. And, for those who simply want to see it right away, they’re now more likely to get it in an unauthorized manner.

Under what set of logic would it ever make sense to give the customer less of what they want in an era when increased competition from other sources is causing them to already wonder if they should buy your product?

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Companies: netflix, warner bros.

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Comments on “Warner Bros. Gets Netflix To Delay Movies; You Don't Save Your Business By Pissing Off Your Customers”

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79 Comments
trilobug says:

Re: Re:

I’m a netfilx user and I’m not pissed about this the service is moving toward a streaming only platform it seems, if you notice just before the holidays they rearranged the site to have the Instant watch tab at the forefront. I rarely use the mail component of my service only having ordered 2 (by accident no less) ever.

What pisses me off is them denying the streaming service content either through delays or just outright locking it up.

jsl4980 (profile) says:

Re: Re:

I’m a netflix user and I’m not as mad about it as I should be. The streaming content is so much more important to me that I think it’s an ok compromise. My DVD queue has about 20 things in it and I won’t get through those in the next four weeks, so I won’t actually notice any of these delays.

More streaming content on Netflix is awesome, regardless of the idiotic deals they have to sign to get it.

Ima Fish (profile) says:

Re: Re: Re:

The streaming content is so much more important to me…

I love Netflix’s streaming service. But what exactly do we get out of this deal? Do we get all Warner Bros. movies streamed? Nope. Do we get all new Warner Bros. released streamed? Nope. We vaguely get “more streaming content.”

I’d much rather have the certainty of getting new releases when they’re released rather than the very small chance of streaming the movie I want at some unknown date in the future.

Anonymous Coward says:

If a crappy video sits on the shelf, does anyone see it?

Warner seems to think they are the only game in town.

I thought they controlled these release windows, anyways. It’s like back in the day when Blockbuster made people pay $4.99 for a “new release” video. Perhaps it’s a part of a new strategy to charge customers $95.00 for “new releases” during those first 28 days of release also.

After all, nothing quite says “That’ll show you” than jacking customers people who would normally buy through legitimate methods.

Ima Fish (profile) says:

they’re now more likely to get it in an unauthorized manner

Gee, I didn’t even consider that. The blu-rays will be available for an entire month, that will ensure there are quality copies for download. Heck, if the other movie studios jump on board, I can simply dump my Netflix account and save a ton of money.

Thanks Warner Bros.!

Anonymous Coward says:

Congratulations, Warner. You've won!

Warner must have hired a bunch of brain surgeons to their board of directors over the holiday weekend. And because of their obvious intellectual superiority, I am unquestionably more inclined to buy more Warner Brothers crap.

Please, please take my money, Warner. All you have to do is break into my house in the dead of night and make it out alive.

Ima Fish (profile) says:

Re: Re:

I never got my new releases within 28 days anyway

I always get the new releases I want the first day. Here’s the trick. They are released on Tuesday, but are shipped on Monday. All you have to do to get that new release is to have that new movie on the top of your list and return a movie on the prior Saturday. It works every time.

The Anti-Mike (profile) says:

At the end of the day, it doesn’t change much for Netflix customers, except perhaps to encourage them to use streaming rather than mail delivery. For WB, it gives them a chance to retail the product before it becomes a cheaper rental product.

It’s a win win that Netflix will never admit to. They are trying have to push people to streaming (there is no number of copy restrictions, etc), to leverage all those netflix enabled consumer goods in the marketplace. I am guessing you will see Netflix slowly but surely move away from their mail based model, as it will be the most expensive way to do things.

Welcome to the future. Enjoy it.

Ima Fish (profile) says:

Re: Re:

I hate to say this, but if the streams are available the day of the original release, without the 28 day delay, I would completely agree with you. In fact, I’d think this was an awesome move on Netflix’s part.

But unfortunately, the streams are also delayed. So that does not “encourage” people to use the streaming service. It also does not “encourage” anyone to buy the DVD. It might “encourage” someone to simply download it rather than wait.

PaulT (profile) says:

Re: Re:

“At the end of the day, it doesn’t change much for Netflix customers, except perhaps to encourage them to use streaming rather than mail delivery.”

…or except the fact that they have to wait an extra 28 days for new movies.

“For WB, it gives them a chance to retail the product before it becomes a cheaper rental product.”

Here’ss the thing, genius. People who use Netflix INSTEAD of buying will not suddenly go out and buy the retail product. They’ll either wait, or download a pirate copy instead of waiting for the streamed version.

Meanwhile, people who use Netflix to preview movies they want to buy on DVD will not be going out to buy the DVD blind at full price. They’ll wait, by which time the DVD will be cheaper (i.e. less profitable).

“It’s a win win that Netflix will never admit to”

Because it’s not a win-win and, as usual, it’s the consumer who misses out.

The Anti-Mike (profile) says:

Re: Re: Re:

Not really.

If Netflix gets 1000 copies of a movie to mail out, and each cycle takes 4 days (I am guessing here, I don’t have the numbers at hand) then they have about 7000 or so customers they can satisfy per 1000 copies.

What happens? Most people end up with the movie on their wanted list, and they might get it some time in the future.

Move it to streaming, the average consumer still gets the movie in the time frame they are use to, because most of them were not getting the movie in the first 28 days anyway. If you use netflix, consider the last time a hot movie came out that you added to your list. How quickly did you actually get it?

Meanwhile, Netflix gets exactly what it needs to move forward with it’s business, licensed and approved content for their streaming service. They don’t have to sneak in the back door, they don’t have to play games. They have a studio signed up and willing to give them content with certain restrictions.

As Netflix is often as much about the long tail (the time after the 28 day window) rather than just what is hot and new this minute, it helps them to expand their streaming service.

Like I said, you can expect to see Netflix move away from their mail base systems soon enough, as they are expensive to operate, and in the long run will not complete with other online offerings, or the cable/sat PPV systems.

PaulT (profile) says:

Re: Re: Re: Re:

A lot of assumptions there. I agree with you about it possibly being a good thing if it helps the Netflix streaming get more content and help them grow the streaming business. Netflix are about providing a movie viewing service, the medium should be irrelevant. However it’s certainly not guaranteed, and the details are rather vague – which movies, how many is “greater”, will these be new movies or just the ones they can’t shift on $5 DVDs in Wal Mart, etc.

However, that doesn’t really address the issue. If so few people will be affected, as you claim, then what’s the point of the restriction? It’s just another anti-consumer move from an industry that doesn’t seem to understand what their customers actually want. Like the Redbox moves, WB are trying to artificially manipulate customers in ways that are likely to drive more people to “piracy” rather than the new release DVD shelf.

There’s no clear benefit to WB, those customers who DO want the movie in the first 28 days are forced to needlessly wait, and the enforced waits can be confusing for the uninitiated. Windowing is already a big reason why many people download movies illegally, it makes no sense to add more.

“they don’t have to play games”

No, that’s exactly what they’re being forced to do.

Anonymous Coward says:

Path of least resistance

That’s why it’s just easier to download movies from ‘questionable’ places on the internet. It avoids all of this red tape. Greed doesn’t increase piracy, CEOs making poor decisions increases piracy.

People are like electricity. They follow the path of least resistance. Put more resistance in the path, and people go somewhere else that makes their lives easier.

OtherKevin says:

Re: RedBox Anyone

All you pissed off Netflix customers. Why don’t you come on over to the RedBox team with me. I stopped using Netflix when I moved next door to a supermarket with Redbox. Since I definitely don’t watch 8 movies a month, this works fine for me.

Because a lot of Netflix customers watch 8 or more DVDs a month. Because you can’t stream video from Redbox to my Xbox 360, Desktop PC, Laptop PC, BluRay player, or Roku box. Because I don’t live nextdoor to a grocery store. Because even if I did I only go to the grovery once every two weeks, and don’t want to have to make a special trip every time that I see a movie. But mostly because Netflix is far more convenient and useful to me than RedBox ever could be, even after this WB crap.

I don’t know how other people use their Netflix queue, but I have over 100 movies in mine. Every week I check the Best Buy ad to see what new movies are coming out so I’ll know if there’s anything interesting coming out on DVD/BluRay, and if there is I add it to my queue. Even if it is a hot release, the odds are pretty good that it’s in my queue behind at least another dozen movies that I want to see equally badly, so it’s no skin off my back. Maybe I’m weird like that, because I don’t feel the need to watch something just as soon as it’s available.

Oh…and for anyone who may be reading this from Warner Brothers, the last DVD that I bought was about 4 years ago. It was a Star Wars box set. I just don’t bother buying them anymore, because if I want to watch them I can do so more cheaply and there really aren’t that many movies that I would care to see more than once.

brent (profile) says:

i have to imagine that there are about 3 types of netflix users

1 movie buffs – these guys will want their movies right when they come out and with this change they can’t get it on netflix right away. instead they will either purchase the movie, download it while buying it, or else pirate it. My bet is on pirating it or they find a friend who bought it and watch their copy.

2 regular users – the new movies will goto the back of the queue (they probably already were in the queue with the status reserved for when available) and pretty much the consider whenever they get it through netflix they think that is when the movie was released. I am this kind personally as when i see a sweet preview for a movie in the theater i just add it to my netflix queue and expect it at my door in 9-12 months and not even give another thought to the movie.

3 people who have netflix in lieu of cable/satellite and get their TV through the internet as well. Im considering going this route myself as it would save my cable bill some money. These types don’t care about movies and will not have an incentive to purchase these new movies either.

I don’t think this policy will change much of anything.

Ima Fish (profile) says:

Re: Re:

movie buffs – these guys will want their movies right when they come out…

Any movie buff who would buy rather than wait for the movie to be rented, would probably love the movie so much he’s probably just buy it in the first place.

The number of people who will start buying because of this 28 delay will be very small. Remember, all the other rental places will still offer these movies.

Phillip (profile) says:

Re: Re:

Group 2/3 Is me.
We got rid of Satellite and just use netflix and hulu to watch everything.
So we do watch some movies on disc, but a lot of it is tv shows for my wife. I mostly find something on the streaming side I want to watch depending on my mood.
I already don’t watch many of the movies on disc, because by the time it gets here, I’m not in a mood to watch it or I forgot what it’s about so it sits around for a week or two until I look it up.
All this will do is make me less like to ever see the WB movies in question. Already I see almost no commercials for new movies, then the ones I do are long before they come out on disc, so I forget about them. Every now and then I think about them but that doesn’t make me buy them.
Like Section-9 or District-9 whatever it was. It came out a long time ago in theaters and I never got around to seeing it. Then it didn’t come out on DVD until the week of Christmas, by which time I’m too busy and everyone else has already bought their presents, so I still have never seen it. I’m not even sure what made me think of it now.
All these windows do not help me remember to check out movies let alone buy them.

R. Miles (profile) says:

Delay. Queues to start 4 weeks later.

When I first read this news, I couldn’t help but think of TV Everywhere. “Want to stream your movie? Buy it first, but we’ll give you online streaming free!”

Idiocy, though, I certainly don’t see this as being an issue. Given the queues of many Netflix members, I seriously doubt this will do any harm. As several already posted, the 4 week delay won’t even be noticeable given there’s much more to watch in the meantime.

People are already used to delays. When “Mall cop” comes out on DVD in 1 month after it runs in the theaters (because it sucked) while the latest Harry Potter takes nearly a year, things like this don’t seem to bother most folks.

But, should anyone from Warner Bros. read this blog, just a candid note to you: thinking people are going to rush out and spend $25 per movie because they can’t instantly stream it makes you look incredibly foolish.

In what part of “you can’t force consumers to buy” does the CEO and other executives not understand?

By the way, you’re not allowed to read (or reply to) this comment for 4 weeks unless you buy it first.

Alan Gerow (profile) says:

Re: Re: Good for streaming

I’ve heard that WB is going to release all their movies for streaming to Netflix.*

*(note: movies included in the agreement are limited to, but may not include all, movies released between the years 1932 and 1965 that did not receive awards nominations or include any actors who have ever appeared in a movie with Kevin Bacon. Movies will not be release sporadically to not be in excess of one title per lunar cycle except when in the moon is waning when an additional title can be released under the condition its runtime is not in excess of 73 minutes. Movies will only be made available for a period of d20+3 weeks in which case they will self-destruct causing massive ecological disasters across the world.)

Anonymous Coward says:

Re: Good for streaming

That must be great that you are able to get two months of entertainment out of one movie over two months, but I imagine the problem is a little more than you let on. If you lost the envelope, you don’t have to be stuck with the same movie for two months- it remains possible to send two movies in one envelope.

But, I think you forget that some people prefer to watch HD content. Does netflix allow you to stream HD 1080p BluRay-quality content or is Streaming in Standard Def the way of the future?

Anonymous Coward says:

I just can’t make myself care about it. I’m a no-cable netflix customer, and I just can’t muster the outrage.

I want to be mad, but I’m not. Netflix is still a great deal, and they should be working on improving the streamed option. Any improvement there is worth the month delay.

What this does do is open the door a little more for DVD rental competition like Redbox. If this trend continues, Redbox will be new releases and Netflix will be streaming.

I’m curious what sort of leverage this deal gives Netflix with the other studios. You don’t want to be the studio who falls behind by not signing on. It would seem that those studios would be afraid of lost DVD sales.

Phillip (profile) says:

Netflix User - Not Pissed

I would much rather see everything online for streaming on Day 1 but I’m not really pissed about this at all. If it gets me more stuff available for streaming I’m happy. And to be honest, I don’t pay attention to the release dates so I’ll just get things when they become available.

Though I suspect it will increase my downloading on the few I am in a hurry to see…

Jim Johnson (profile) says:

Netflix User that isn't mad

I think this is a win for Netflix. An artificial 28 day window does suck, I will agree with that. But personally, my fiance and I are not so worked up over seeing a new movie that we planned on netflixing that an extra 28 days is going to matter. If we want to see a movie bad enough/it seems worth it we’ll hit the theater. Otherwise, we just add it to our queue and wait for it to be available. If this move gets more new releases available for streaming after the 28 day wait period, that’s fantastic news to me. I think (hope) Netflix is just using this as a foot-in-the-door scenario. I doubt it’ll be difficult for them to show WB how much opportunity they are missing out on by not just making this stuff available immediately.

Tom Black says:

WB & Netflix need some smarter people in PR

The problem with this isn’t the actual practice involved but the spin. What if they said they were going to move up the release dates for sales 28 days before the rental market would receive inventory? My knee-jerk reaction to this was a negative one but then I thought about all the additional streaming options it would afford me in those 28 days. Besides, I have to wait that long for some new releases already!

It’s just a matter of time before everything is streaming. Why knock the studios for trying to make the transition work for everybody?

ALLHAILPRINCE (profile) says:

RE: they're now more likely to get it in an unauthorized manner.

They’re now more likely to get it in an unauthorized manner.

Absolutely true. Those of us who still have jobs are having to work 80 hours a week to keep them. So by the time I get home anything I want to watch has already aired. I goto Hulu or the Studio’s website and try to watch it and am told I have to wait 24 hours. I go to the “Sailor’s Cove” and can download a copy in less time than it takes to watch it.

Sure I can pick my own grapes and make my own wine, but I would rather goto the store and buy a bottle because its easier. When it comes to movies this point is particularly prevalent, it is not just about having the content to provide its also about how you deliver it.

If its easier to download it from some site and watch it when you want to, then it is to wait and maybe catch it when the content provider ALLOWS you… which are you going to do?

These days with content being put in a digital form from conception to production and then to broadcast a copy will get out PERIOD. The content provider can only dictate terms for so long before the consumers backlash or find an alternative. These days the alternative to paying for content is pirating it. I know its an ugly word but the fact is their are pirate out there and these days with content providers attempting to lock up their content its easier to pirate it. Once your customers educate themselves on how to obtain the same content for free its very hard to convince them to pay for it anymore. The MPAA and RIAA only have them selves to blame for the amount of piracy out there.

Do I believe content providers should be compensated for producing a good quality product? YES!

Do I believe content providers can abuse their customers and not expect a few of them to stop paying for a lower quality of service than is expected? NO.

GO ahead Ted Warner and lock up the content you would be getting paid for on NetFlix… You will just get robbed by the pirates instead. Once they saw your shitty movie for free whats the chances they are going to pay you to rent it from net flix? NetFlix isn’t stupid either if the demand for your DVDs drop they aren’t going to buy and shelf as many. You are the only one that looses revenue. How is that consistent to the fiduciary duty you hold to your stock holders?

And PLEASE don’t give me the sob story about how the little guys aren’t getting paid. The actors, director, screen writer etc all got paid or they wouldn’t have done the movie and only a sucker would take points unless its a feature film with a james cameron at the helm of a marquee line up of performers. The only one that doesn’t get paid is Ted Turner.

Mike Masnick (profile) says:

Re: Re:

Mike, you keep linking to the ‘add more Windows’ argument, and I follow the links all the way down the rabbit hole, but never get an answer of explicitly what you are talking about. Please elaborate if you will.

Release windows. Hollywood loves to stagger the release of different formats on different dates.

So the theatrical release is on one date. Then the PPV release. Then the DVD release. Then the cable TV release. Then the network TV release.

They think that the more windows, the more money they make. So now they’re trying to make the DVD release two separate windows. One is “DVD purchase” release and the other is “DVD rental” release.

Oh, and with SOC they’re trying to add in a separate “PPV, but you can’t record on your TiVo” release.

lux (profile) says:

Re:

I appreciate the feedback Mike, and wow, I definitely agree. I don’t know how this type of backward thinking drove the movie industry to record profits last year. How the hell are they pulling this off? At least in this case, delaying customer satisfaction (read: pissing off the customer) by not giving them what they want when they want it is just moronic. People’s propensity to consume for the latest movies only dwindles with time…why not tap into that buzz as soon as you can.

Tim K (profile) says:

Who will notice...besides Warner's accountants?

I don’t care. It won’t affect me…or probably anyone. Maybe I am wrong, but it seems like Warner has no clue how real people actually operate. For the most part, I think there are a few types of consumers of DVDs.

Type A – ONLY rent.
Type B – mostly rent (or stream) and occasionally buy a favorite DVD.
Type C – Buy everything.

I think 99% of people fall into type A or B. Those in TYPE A who never, or almost never BUY a DVD aren’t going to start buying simply because they have to wait 28 days to rent. Type B people are only going to buy their faves anyway, so it won’t matter to them, they aren’t going to buy more movies. Type C people are buying movies anyway so nothing changes for them.

I just don’t see how this makes ANY more money for Warner at all.

Besides, most Netflix users put things in their queue and when they show up in the mail they watch them. Release dates are so random anyway that most people wouldn’t know the difference if a film was delayed 28 days. I know I wouldn’t.

Goni says:

what’s 30 days? it’s a month, chances are if you’ve waited till a movie is out on DVD you’re not that desperate to see it. And if this gives a viewer more options on Instant download than i really see this as a benefit. There are so many movies already on my que that having the ability to watch these on instant would save me alot of time and hassle. Sometimes as Consumers we have to learn to compromise to get what we want. Having instant viewing is amazing. I don’t even have cable anymore because I just use instant on Netflix. Learn to love life people. and check out this video.
http://www.youtube.com/watch?v=-LkusicUL2s

Goni says:

what’s 30 days? it’s a month, chances are if you’ve waited till a movie is out on DVD you’re not that desperate to see it. And if this gives a viewer more options on Instant download than i really see this as a benefit. There are so many movies already on my que that having the ability to watch these on instant would save me alot of time and hassle. Sometimes as Consumers we have to learn to compromise to get what we want. Having instant viewing is amazing. I don’t even have cable anymore because I just use instant on Netflix. Learn to love life people. and check out this video.
http://www.youtube.com/watch?v=-LkusicUL2s

david says:

Warner

To Warner!!! What the %^$#%^# is going on?!! All of us that is getting movies the correct way are being punished. You are promoting and provoking society to other measures of obtaining movies, and then “LITIGATION”. Maybe someone should buy you out, and handle it. Just remember, there are more of us than YOU. What would you do, if you were to be boycott by 70% of the world population? YEAH! you would get it then, HUH?! More streaming for netflix, simple request.

TMFKAF says:

I’ll be doing the same as Jean, I WAS paying 18 a month for the 3 DVDs at a time thru netflix. Now instead I’ll drop down to 1 DVD at a time with net flix and sign up for one DVD at a time with Blockbuster. It’ll be about the same and I’ll still get new releases AND online content … which was what Netflix PROMISED with its advertising when I signed up

Grea Alexander (user link) says:

New Releases

Call me kooky but if I REALLY want to see a movie that badly, I go and watch it at the movie theater on the great big jumbo screen when it first comes out. If for some bizarre reason I am unable to watch it at the “big theater” then I go and watch it at the $1.50 discount theater. In the rare instance that I want to see a new release that is straight to DVD or foreign, I simply put it to the top of my Netflix queue and continuously receive free extra “bonus” DVDs (DVDs on top of my subscription plan allotment) until they can ship it to me. It’s pretty win/win for me.

I LOVE movies but I consider actually going out into the world and engaging in actual activities with real live people, etc. to be more a priority in my life. There is not one single movie out there that I will throw a fit over if I don’t get. If you choose not to watch a movie at the movie theater and have the patience to wait for it to come out on Blu-ray/DVD in the first place, you really must NOT want to see it all that badly, and therefore, waiting an extra month will hardly kill you.

I do, however, have mixed feelings about this deal and the latest one along similiar lines that has been struck, if only on principle. While I do have a home theatre complete with a Netflix streaming blu-ray player and the more interesting content available via streaming for me to watch when I’m tooling around the house for whatever reason, the better, I also(on principle) don’t like the idea of movie studios trying to force anyone into buying their DVD or going to Blockbuster. There’s just something very un-American (and likewise very American(wink.)) about it all. We are afterall (in theory) a country that believes in competition are we not?

Still, however, positive or negative this shift is, only time will tell.

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