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?

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Companies: hbo, netflix, redbox, warner bros.

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Comments on “WB, HBO Continue To Suck At Economics; New Policies Encourage Piracy”

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Rikuo (profile) says:

The top executives at WB and HBO really and I mean desperately need to be tested for insanity. They’re in the market of selling and renting movies, and they’re doing EVERYTHING they can to NOT sell and rent movies.
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?

ltlw0lf (profile) says:

Re: 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.

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.

SomeGuy (profile) says:

Re: Re:

Do they think that Netflix is making money that ought to go to them?

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.

Anonymous Coward says:

Re: Re: Re: Re:

Sounds like they should have partnered with some of the early guys instead of suing them

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.

MAJikMARCer (profile) says:

If I didn’t see the movie in the theaters, then I clearly didn’t think it was worth the price to see it there and thus I would prefer to watch it at home. Thus why would I pay $20-30 for a newly released DVD/Blu-Ray when I didn’t pay the $9+ to see it in the theater?

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).

Capitalist Lion Tamer (profile) says:

WB, HBO Increase Piracy Window to 56 Days

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.

Mike C. (profile) says:

Wait, wait... I think I got it...

I think WB is just trying to help consumers struggling in the tough economy.

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

Machin Shin (profile) says:

The really scary thing is I can only come to two scenarios here.

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.

ChrisB (profile) says:

Re: Re: Re:

> Nope, because remember- you’re not buying the movie. You’re licensing it. (eyeroll)

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?

Gwiz (profile) says:

Re: Re: Re:

Nope, because remember- you’re not buying the movie. You’re licensing it. (eyeroll)

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.

That Anonymous Coward (profile) says:

The fear driving this obviously insane and desperate measures is that they suddenly will not make as much money as they possibly can.
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.

Hephaestus (profile) says:

“How does that help in any way, shape or form?”

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.

anonymous says:

i often wonder if those in charge of big corporations were born as thick as fuck or whether they had to be taught?

‘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!

Anonymous Coward says:

Once more the content industry has tied its futures to sinking ships.

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.

Bob V (profile) says:

Re: Re:

I have a hard time believing that they are braindead, no one should be allowed run multimillion/billion dollar industries with that level of obliviousness to reality. There has to be a point to this strategy. We just don’t know wha the plan is. I’ll be honest I’m starting to entertain global century long conspiracy theorys to explain their strategies.

Anonymous Coward says:

There are over a hundred sites that offer HBO content for download, not to mention torrent sites, so all this does is make them more popular.
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.

Anonymous Coward says:

On behalf of people accross the world, I would like to thank WB. My netflix queue is pretty big. By pushing out all new WB movies, I will likely forget about all new WB movies and watch all those movies that will now be at the top of my queue (non-wb movies). After 52 days, I will likely forget all about those movies because newer better movies are likely out by then. If by some chance I can’t live without seeing one of those movies, I’ll probably just pirate it.

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.

peter says:

No no no

Sorry but you really don’t understand.

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.)

Gwiz (profile) says:

Re: Re:

Rentals of movies give Hollywood so little money that they may as well have been losses to piracy.

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.

Anonymous Coward says:

Re: Re:

This has already been brought up earlier. If you’re going to delay rentals so much, people will either download the movie as an alternative, or forget it by the time rentals do become available and forgo watching the movie.

If rentals are making a loss, why isn’t the solution making rentals available more quickly to take advantage of the window of interest?

Anonymous Coward says:

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.

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.

Rob says:

HBO overcharges for everything

HBO has excellent programming. Their TV shows are wonderful (True Blood, Game of Thrones, and Boardwalk Empire). However, they overcharge and put silly restrictions on their content. If they only charged $8 I would be more then willing to pay. They charge $16 a month. At that price they get none of my money. I’ll just download everything for free 15 minutes after it airs. Overcharging = piracy. $16 a month is a rip off when Netflix is $8 a month.

Anonymous Coward says:

Re: HBO overcharges for everything

I don’t care whether you pay for HBO or not, but all I ask is that when Game of Thrones gets cancelled later this year, don’t get angry or sign any petitions or send lemoncakes to HBO. Just be secure in the fact that you’re part of the reason it didn’t get renewed.

Anonymous Coward says:

Re: Re: HBO overcharges for everything

I didn’t know Rob worked for Time/Warner and is pivotal in the ongoing decision to tie HBO subscriptions to expensive cable plans (read: dead weight) instead of offering HBO go to anyone in the world (or at least the US) for a reasonable subscription fee (read: not double what Netflix charges for streaming several times the content).

Violated (profile) says:


These policies are an old market concept which only bore fruit when people had no other choice. So by their own actions they lose to the competition even if that rival is piracy.

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.

BladeMcCool says:

Some money, or no money?

The studios clearly would be happier to make no money instead of making some money. And SOPA is just going to spur us to make a better DNS system. Your browser wont ask a centralized DNS system for the IP address of Isohunt.com, it’ll ask the DHT system, or something like it, for cryptographically signed name to IP mappings. Its something we were probably eventually going to get to anyways, but they are turning it into a priority. Good for them, and thank you. DNS DDoSing has been a problem for a while, but manageable. Now it will become a non-issue entirely. Thanks again Big Entertainment for spurring needed technical innovation. 🙂

Anonymous Coward says:

Nothing “drives people to infringe”, the decision to steal is a personal choice, watching a television show is not a matter of survival. You can say that poverty drives people to steal food, but you cannot say that lack of options drives people to steal content. Customers have the option to abstain from a purchase, but they are not allowed to illegally obtain videos, music or software.

Anonymous Coward says:

You can still rent WB movies on the day the dvd comes out. You have to do it on itunes though. WB gets a cut of the rental price. Also, they often hold back the ability to buy the same content until the rental has been online for a week. Not all the time, but I have noticed it on occasion. Just another lame attempt to generate new release windows.

ECA (profile) says:


I wonder how many of these Execs have a Full selection of every movie they have EVER watched, sitting around at their homes.
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
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.

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.

rukidding (profile) says:

HBO overcharges for everything

I think the problem has to do with how HBO and other content producers, in addition to cable providers only provide access to content in bundles instead of a-la-carte where the true value of the content would be exposed. The ratio of low value filler content compared to the high-value content is so high that the high price demanded by the content providers is not equitable and thereby driving consumers to infringe.

H6 says:


Blockbuster doesn’t exist in Canada anymore. After they drove all the other video rentals stores out of business they are now gone too. It down Netflix and some Quickster style stuff. Neither have the selection that you get in the US. Piracy is the only way for me to see some movies at home without paying 20 to 30 dollars. They are really making piracy a good option here. People who never before considered it an option are starting to see it as the best option.

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