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.

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Companies: netflix, warner bros.

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Comments on “Netflix Exec Claims That Delaying Movie Rentals For A Month Benefits Customers”

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jjmsan (profile) says:

You may feel a slight period of discomfort

I understand people making business decisions in their own interest. I may not agree with whatever the decision is but it is their business and so they can do so. What really makes me angry is when they explain how my understanding of how this impacts me is really wrong because if only I would look at the situation however They decide to spin it I would understand and be happy. So not only do they damage my interests they think I am too stupid to notice. They should really just get into politics where this is the norm.

Joseph Durnal (user link) says:

Netflix Customer

I’ve been a Netflix customer since before they really caught on. At first, they were perfect, and they are still pretty good, but I think that this is a line of marketing BS to convince us that a big loss is really a win. While some of the most popular titles were sometimes delayed for the first few weeks, I don’t think I ever had to wait a month for any title. I’m not even sure I ever had to wait two weeks.

Michael Long (profile) says:

Re: Netflix Customer

I have. If I could put a screenshot clip here I’d show you, but nearly every movie in my list has “long wait” or “extremely long wait” next to it. And some are titles that appeared in late November.

My response? I’ve cut back my rentals, going from what was once a seven-disc queue to three. I’ve also started using Redbox a lot more.

Netflix’s job (for the moment) is to ship discs. If they can’t or won’t stock enough of them to meet demand in a reasonable time frame, then people will find someone who can.

Anonymous Coward says:

…And I was looking forward to subscribing to Netflix when I got a device that would do streaming. Seriously, for my next home theater video device, whatever that may be, I really wanted Netflix streaming. It was a must-have feature. And there’s a lot of them out there now. I’m jealous of friends and family who do have that setup, be it a Tivo HD, 360, or whatever.

Well not now. Fuck you WB, and fuck you Netflix. I’ll just have to keep torrenting movies and TV shows since I can’t get them legitimately in a format I want. That format is completely non-DRM’ed, playable on any device, convertable to any format I want… in short, in a format that’s useful to ME, not the studios or distributors or whoever. ME. And I will NEVER knowingly or willingly “buy” DRM’ed content. “Buying” DRM’ed content is not buying, it’s renting.

But that’s off topic. I AM willing to rent content, such as through Netflix streaming. But not when the company engages in blatantly anti-customer moves like this. And then they make it worse by acting like we’re all stupid and we’ll just believe their bullshit. Sorry, no sale. Literally.

It’s the same reason I’ll never buy any of the current ebook readers. Especially a Kindle. The anti-customer bullshit Amazon has perpetrated is just staggering. I’ve also bought things at sites other than Amazon recently because of that.

We all need to vote with our wallets and let companies know they cannot do this kind of thing. Had Netflix been forced into this and gone down fighting, that would have been a world of difference. But they caved, and then acted like we’re all stupid.

Again, fuck you WB, and fuck you Netflix.

And fuck you Amazon. :-p

Allison K (profile) says:


No mention here of the restriction on streaming the video in question, I notice – the “inventory management” argument really breaks down when you’re talking about streaming digital files. They try to sell it as an improvement by investing the savings into beefing up streaming, but wouldn’t it be better still (by that logic) to restrict physical rentals but enable streaming? Of course, they’re restricted by yesterday’s business models from the studios, so I’m not sure what their options are – but this is just intellectually dishonest.

intel_chris says:

For some netflix customers it may make sense

Customers like me. I’ve had netflix for a long time. I have 40 some unwatched movies in my streaming queue and 60 some in my DVD queue. There is always something good to watch in the queue. If I wanted to watch a movie when it was “hot”, I would pay to see it in a theater, but I really want my entertained with reasonable quality at a reasonable price. If I have to wait another 30 days to see a movie, I don’t care. It doesn’t even matter to me if I can’t see it on netflix until I can also see it on a premium movie channel or perhaps even on a non-premium channel, although with some movies that later wait is definitely too long.

Having move movies I can watch streaming is a definite plus for me, even if it incurs a delay when I can watch them. The people who want a wide variety of movies including some “older” ones are definitely the contingent netflix serves best. If you think you could serve a different contingent better, you are welcome to make your own startup and rove yourself right. Moverover, even if you can’t run your own startup, you can always go to you local blockbuster store, they tend to be filled with copies of the latest releases that are available and more limited selections of older releases.

chris (profile) says:

Re: For some netflix customers it may make sense

There is always something good to watch in the queue. If I wanted to watch a movie when it was “hot”, I would pay to see it in a theater, but I really want my entertained with reasonable quality at a reasonable price.

i agree sort of. i do see a lot of movies in the theater, probably once or twice a month, but i torrent a lot more. the “new release” section for me is sorting a couple of trackers by seeds and seeing what’s hot. that means i already get new releases a week to a month before they hit retail. i use netflix to augment my back catalog of independent/obscure films, and netflix streaming to watch arbitrary stuff when i don’t feel like waiting for something.

so while it’s bad news that netflix caved in, it doesn’t really matter for me, since i don’t use netflix for new stuff.

Anonymous Coward says:

Re: Re:

Warner Bros is doing this so that the “easy” and “fast” way of seeing new releases is to buy it from them on DVD or Bluray OR to rent it off of Time Warner Cable.. I have Time Warner AND Netflix and I’ll be damned if I’m going to PAY anything “Warner” after paying Netflix for my movie needs.

I’m with everyone else.. I’m done with Warner Brothers movies. Never another penny from me EVER.. You other studios want to follow suit, that’s fine, you’ll be on the no-buy list too.. I’ll wait the 28 days and view it when I’m damn good and ready on the format I want but I’m NOT paying anything more to see movies.. If Netflix pisses me off anymore, they are done with getting anything from me as well.. Does that mean I’ll pirate? Not really. I believe that someone will come out with a better service without the BS or for a better price and I’ll move on to that or some other form of content delivery.. I will NOT however play into their hands by paying multiple times for access to content because they want to make their product scarce to any form other than direct purchase / rental.

Alan Gerow (profile) says:

Re: decisions, decisions

more like should you download the torrent, or wait 45 days for the DVD to be available via Netflix.

Because (1) DVDs are usually available on torrent sites a couple weeks before release, and (2) you sure as sh*t ain’t gonna be able to watch brand new releases via Netflix streaming if they won’t even be allowed to ship out the DVD.

Jake (user link) says:

I can see a certain amount of logic to this. Driving traffic towards their infinite goods takes the pressure off Netflix when it comes to ordering in physical media, and gives them a hint about how many copies they’ll need to buy in.

Why they can’t just come out and say they’re making the best of a bad situation rather than spinning it as 100% pro-customer I have no idea, though, unless they’re worried that Warner Brothers might cut them off completely if they admitted to being less than pleased.

CastorTroy-Libertarian (profile) says:

Re: Re:

As its WB, they most likely told Netflix that if this was made to look like they where the bad guys (and they are) that they would spank them again.

Really Netflix gets to take the double whammy on this one, no good way to spin it (customers piss), and the WB just hung them up by the short and curlies while stealing their wallet…

slacker525600 (profile) says:

just trying to wrap my head around this.

Is he saying that streaming will be available same day as the dvds? Because, if the options for netflix in negotiations were no streaming with dvds available asap, or streaming and dvds 28 days later, then I understand the argument that this could better serve customers(not that it does, that it could).

I understand that there will be some customers who are adversely effected by this decision, but with the infinite availability on the 28th day, isn’t that a better economic option than having a limit based on a physical good.
To really dig into it, you would need to know a lot of information about how netflix deals with inventory and purchasing decisions.

The negative in this equation is all the people who would have received the dvd in the first 28 days, and any added delay associated with those 28 days. But, the positives, include the infinite good of streaming, the reduced demand for the physical dvd due to the availability of streaming, and anything that netflix gains as a result of reducing costs of distribution via streaming versus mailing of dvds.

Alan Gerow (profile) says:

Re: just trying to wrap my head around this.

They sure aren’t going to allow Netflix to stream a new release if they aren’t even allowed to ship out the DVDs, because that would be totally counter-productive to WB’s entire desire to limit DVD renting to create their windows.

And they sure aren’t going to allow Netflix to stream new releases as soon as they are allowed to ship the DVDs because then Netflix wouldn’t need to purchase as many DVDs themselves.

Likely, they worked with Netflix to create more of their wondrous “windows”. They’ll get more of WB’s back-catalog of titles to stream, the ones that have already been sapped dry of DVD sales or are seen as non-sellers … and then after several months the “new releases” will be windowed for on-line streaming, probably after a couple of television deals have been signed.

Essentially, to get more of WB’s old crap, Netflix has probably signed away their soul of current cultural relevance. And this is good for the consumers, somehow. And great for RedBox, Blockbuster, and torrent sites.

Dave (profile) says:

How much do release windows really matter?

I understand and agree with every argument about this artificial release window. It’s not consumer-friendly, and the wait ends up reducing demand for rentals of new movies.

In the long run, though, how much does it really matter? Does the average Netflix customer really care *when* the movie is available for streaming? Sure, there will be some demand when commercials for the DVD start showing up on TV, but won’t most people just look in and say, “Oh, let’s see what’s new,” and go from there? Maybe I’m underestimating the public’s patience for these things, but I just don’t see the vast majority of Netflix subscribers pining for that sort of instant gratification — especially if there are plenty more movies available and waiting to be discovered.

The studios have to know this. That’s why they can get away with creating these windows, even if they aren’t consumer-friendly and seem to be merely propping up old business models. We can rail against these windows until we’re blue in the face, too, but with so many people still going to the cineplexes and still subscribed to Netflix, our complaints become little more than a fly’s buzzing to the MPAA and its members.

Perhaps we should be less focused on the release windows and more focused on the broader issues associated with copyright, like ACTA and other attempts to force abhorrent laws and regulations down our throats. Release windows are silly and unnecessary, yes, but evil? That seems like a stretch to me. It’s a business tactic, and it’s one that plenty of people will begrudgingly accept in exchange for more viewing options overall.

Besides, if we don’t like the MPAA, we can always stop watching movies, right?

Sean says:

Having to wait another month doesn’t really seem like a big deal to me. For instance, you’ve got a queue of movings come to you anyway, so watch those for the next month. Or go online and stream any of the thousands of movies they have. Look for more from that director.

Overall this isn’t really that big of a deal for the customer. I can see how, philosophically it’s frustrating, but the service already has so much content, watch something else and wait for the movie to arrive.

Comboman (profile) says:

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.

This is a very interesting statement that no one seems to have commented on. Why do they purchase WB discs from third parties instead of directly? After they do this deal, will WB allow them to buy directly at a reduced price?

Phillip (profile) says:

I Like It...

I think it could benefit me as a customer for a couple reasons. But it does depend on how they do it. First, I’m much more interested in streaming and this is supposed to get them more titles there. Second, I read that this was not only going to help with demand (I think that affect will be smaller) but will also allow them to get the discs cheaper and therefore in greater quantities. Which really will make it easier for me to get them. I really don’t pay attention to the dates except when they show up on Netflix.

X Netflix customer says:

Throttling Ring a Bell

I learned that no matter how rapidly you return a DVD even if returning it to the post office of their distribution center you will only get a set number sent to you. I dropped their service then and nothing that they have done since then leads me to believe they are a customer friendly company. Good thing that there are so few movies coming out now that I want to see in the first place. Maybe when SAW 12 comes out and nobody goes to see it, buys the DVD, or rents it things will get better.

Happy Customer says:

I find it hard to complain

I find it hard to complain about this when Netflix has the best customer service of any company I can think of.

The subscription price is the price (not 10 pages of fine print and add-on fees – they even *lowered* the subscription rate once). They haven’t raised prices since I’ve been a customer. It’s easy to switch between subscription levels (they don’t even give you a sales pitch if you go to a cheaper plan). Easy to return damaged videos for a replacement. Fast service. Easy to rate vids. Etc., etc.

I wish other companies would follow their lead on actually treating customers well and not just saying they treat customers well.

Me says:

Gonna lose money from me

My wife is already complaining about the long wait for new releases she wants to see. I rented from Redbox for the first time last month because Terminator:Salvation was in a terminally long wait status… We’ve subsequently rented about 6 more movies since then, specifically things that Redbox has in stock and Netflix can’t get me in a reasonable amount of time… So, I’m already thinking of dropping to a lower subscription level and giving that extra money to Redbox. Doing this will probably just drive me back to torrents, so no one gets my money.

rockman123 (profile) says:

the value of pirates

i was at wal-mart and saw that old movies, recent history ones, were at four dollars.four dollar dvds, wow, with me, i steal because its a political statement, dvd of sherlock holmes could be one worthless dollar and i’d still get the screener off the bay, but to the point, movie theaters are the last place the mfaa can get 10 12 bucks to see their lousy crap before the word gets out. but they are stupid because people are not going to quit going, too many reasons to go, juvenile delinquents getting out of the house, girls, ect. i don’t know what the end game looks like, if dvd releases happened two days after the screeners came out would that put on the pressure to have something new faster? warner brothers turns into a sort streaming network, as much content as fast as they can make stupid morals or language caveats, somebody ought to try something new but of course if the stock drops, then a head would have to roll and we’d have one more lawyer going to culinary school or standing in line behind the rest of the ambulance chasers.

Carl (profile) says:

This should work for bakeries too

I’m thinking I could start a good bakery business with this model. I will refrain from selling any pastries or bread while it is fresh, but instead wait for 28 days until it is completely stale. That way there will be less demand for the bread so there will be plenty for the customers to buy immediately, thereby providing a better customer experience.

Anonymous Coward says:

NetFlix 29 Day Window

I subscribe to netflix, and horrors of horrors I use the torrents to time shift, my viewing of various series that I watch. This will just mean that I will download the DVD’s If I Must see the DVD before the end of the 29 day window. I never buy DVD’s anymore since I can’t depend on them working after 2- 3 years anyway, just like I had to convert all my VHS recorded tape to DVD. So I will feel no affect from this decision, other then my downloads may be increased by a few percent.
And if I find that I don’t use Netflix all that often i will just disconnect that subscription, just like I disconnected my Subscription to Dish Network 2 years ago, and went with Netflix.
I actually hope someone will report this to Netflix, since after talking to family and friends they feel pretty much the same.

Tom Black says:

You misunderstand a basic element of this deal...

and that is the fact that Netflix will be paying less per unit for the Warner titles now that Warner has agreed to play ball. Netflix had deals with other studios in place but not Warners so they ordered fewer of each of Warner’s titles.

Whether or not this is a positive for consumers depends entirely on your use of the service. I for one love the idea that I can stream more high-quality titles after this deal goes through. That’s much more useful to me than getting in line for a handful of WB new release titles that I wanna see each month. If you don’t use the streaming service I could see how you’d think of this as a negative.

Chris Maresca (profile) says:

Streams tied to actual DVDs

I think what most people are missing is that NetFlix streaming is likely tied to the amount of DVDs NetFlix owns of each movie, ie. streaming is the same as getting the physical copy. So, when a movie comes out, it’s both volume constrained and more expensive.

By delaying for a little bit, they are giving up some viewership that they would have lost anyway by not having enough DVD stock (either for physical delivery or for streaming), but they are also able to get the DVDs at a lower price.

Phil says:

logical business decision??

“…that doesn’t seem very customer friendly at all”

It also doesn’t seem like a very good business decision… unless you’ve either been paid, or unwillingly levered into it.
I can’t believe Netflix executives are actually happy about having to make this announcement. I’m sure they understand the nature of the competition they face from Redbox

Danny says:

Blockbuster Online

I don’t put too many movies in my queue as soon as they release but the few times I have they were plauged by wait times (I added The Hurt Locker last night and it appeared in my queue as having a Short Wait). Honestly if it wasn’t for me living in such a remote area that we don’t have RedBoxes (the closest one is a bit over an hour away from me) I would have switched to one long before now.

RIchZ (profile) says:

Not much of a business model

“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.”

Doesn’t seem like much of a business model, either. …taking away the ability to collect revenue from your customers for nearly a month at the point when their demand is likely to be the highest…

John Smith says:

Welcome to the real world Jackass...

Ok so here is how it will go:

  1. Log into Netflix.. Movie Unavaiible. NETFLIX FAIL.
  2. Search interwebs for XYZ Movie.torrent.
  3. Download movie for free off the interwebs.
  4. Cancel Netflix account for not providing the same service I can get for free else where.
  5. Netfliz looses subscribers and orders fewer discs and only
  6. Netflix and the movie studio lose cause if I already have and watched the free version why pay to get a “real” copy.

Lesson: Once you send your customers else where to get serviced and they find a way to get the same service or better (EARLY RELEASED DVD SCREENERS) for FREE. You will not get them to come back and pay you for mediocre service just cause its the “Moral” thing to do.

These days especially, people are broke, and hollywood execs in their million dollar mansions have the audacity to tell the rest of us that they are going broke cause we download movies. Well Mr Hollywood exec GO {INSERT COLOR METAPHOR FOR PROCREATION HERE} YOURSELF !

Since you wont let movie theaters turn a real profit filling seats they in turn rob us at the concession stand. We in turn download movies for free.

You limit exposure by delaying releases. We in turn download it cause we want it now. This is America and we always want things NOW. That’s just how it is and that is your customer base. Why the hell should I have to pan around your schedule? If I have time to watch a movie i dont wanna wait till Next Friday when it hits theaters if I can download a leaked copy and watch it right now in my boxers on my couch with a cold beer from my fridge and a steak not flat movie theater soda and stale popcorn… in case you missed it thats me giving you the middle finger mr hollywood exec.

If you cant service your customers someone else will. And places like the pirate cove make tons in advertising cause YOU created their demand and encouraged their growth by not adapting to the needs of the customer. Welcome to the real world jackass.

BOTTOM LINE: I still get what i want, I watched your shitty movie. What did you get? Not my money jackass. However, anyone that makes a masterpiece like the Godfather deserves to have that movie paid for and appreciated. Yeah sure i can download that movie and probably have when my dvd copy was out of reach but thats the point. I had the tape and then I bought the DVD cause to me, the customer, that movie has REAL value and in turn creates a willingness to PAY for it.

Or more recently Avatar was released with a 3D option I paid the 18 dollars to watch it because thats an experience I can not duplicate at home for a more reasonable cost… YET.

SolidSilver (profile) says:

Unclear on the concept

How many movies are worth owning anyway? There are only a few that I watch repeatedly. The rest, I’m perfectly happy to rent and watch once. So if I didn’t care enough to pay to see a movie in a theater, what would possibly make me pay 5x the ticket price (cheap theater in my neighborhood) to own a copy that I would, in all likelihood, watch once and stack away?

Jeff says:

New "Rental" Movies from Netflix

In addition to this bewildering move, Netflix now has a slew of New Releases that are a different breed of DVD. They are designed for Rental and in fact have the word RENTAL right on the disc. I have had two of these from Netflix now, Night at the Museum 2 and The Invention of Lying. THEY SUCK! No Extras, No Commentary, and the Invention of Lying didn’t even have Scene Selection! In addition the disc plays in a continuous loop, which in our case means it played for two days straight because the teenager fell asleep watching it, woke up, shut off the TV fully expecting the DVD player to finish the movie and shut off. Instead it ran for 2 days and 3 nights before I caught it…

If this is the wave of the future at Netflix I will be a customer for about another week and I’m done. When I pay rental fees for The Invention of Lying and Netflix describes it as: interactive menus; scene access; making-of featurette; “Prequel: The Dawn of Lying;” “Meet Karl Pilkington;” “More Laughter: Corpsing and Outtakes;”; “Rick and Matt’s Video Podcasts;” additional scenes.
And find it has not a single one of these, and it was actually NOT in 5.1 Surround but instead Stereo. (The same problems with Night at the Museum 2) I find this to be unacceptable. I will instead end up returning to the days of Burning Bootleg DVDs. At least I get the extras with them, and I won’t pay the obscene price to buy the darn things! (I do buy DVDs of my Favorites and will continue to do so, the bootlegging is in lieu of renting)
Netflix tried telling me these “RENTAL” movies are for our benefit, “So we are assured to have enough copies” B.S. I have never waited so long for New Releases in my life, I have had 10 New Release movies in the top of my queue for over 6 weeks, I have received 2 of them in the 6 weeks (both arrived in the past week). Never in the 8 years of membership have I waited this long, and never have I even considered dropping my membership, until now. This is all a case of the Movie Execs and Companies wanting a larger piece of the pie, they are whining about revenues! When they are spending close to a half a BILLION to make AVATAR, they truly are out of touch with their average movie viewer.
I say show Netflix and the Movie industry how you feel by boycotting them. If I knew how to make a website I would start one on this RENTAL movie crap.
Well that’s my piece…

magnet says:

With a 28 days delay Netflix is now a true archive outlet. You will only be able to get older movies. In southern California you are able to rent at a Safeway current movies for $1. So that makes me rethink the subscription strategy. I may go with Netflix for the cheapest subscription to get oldies and go for the local store dispenser for current movies at $1 a night.

common sense says:

Netflix allows you to rent about 10 dvd’s a months (based on shipping time) for 9 dollars as well as watch as manf free streaming movies as you care to watch (they have about 17,000 titles to watch online)

I find it to be a pretty good deal. I watch about 15-20 movies a month through them for less than 10 dollars. I used to buy dvd’s all the time for 10-15 dollars each, sometimes 10 of them at a time, so Netflix is a huge money saver for me.

Obviously we would all like new releases to arrive at our door the morning they come out but it’s just not going to happen. Not at these prices anyway.

I think you can get new releases through blockbuster’s online site, but I act fast because they wont be around for long.

jean jacques says:


my 9 year old grandaughter drwe my attention to your comments.Couldnt you have made the same comment without the “f” word.?.I know you will think im an out of touch grandmother but you have to realize its not just adults that read these comments.Please consider re-writing your coments without that word.Its not only offensive to most inteligent adults its a word when used by a child,thats ends up with a smack or room banishment.We cant teach children the right time and right place to use some words when supposedly grown man uses it o a public web site.

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