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?

Filed Under: business models, dvds, hollywood, movies, rentals, sales, streaming, windows
Companies: netflix, warner bros.

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  1. icon
    ALLHAILPRINCE (profile), 7 Jan 2010 @ 2:42pm

    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.

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