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.

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  1. identicon
    Anonymous Coward, 9 Feb 2014 @ 12:24pm

    Warner 28 day release

    I started my video specialty business in Jan. 1979. This was significantly prior to the pre-recorded movie business. It evolved into the movie rental business when the big box corporate entities decimated the hardware business and the so called war between vhs and beta was settled in the USA.

    Over the years I watched the industry raise the price of VHS movies from $59.95 to $104.95 retail. I also (via trade mag info) found the outlandish attempts at high speed VHS replication that were tried. The real time replication was considered a major barrier to the industry. High speed replication, it seems, generated more problems than it solved.

    The situation the studios are in is a direct side effect of digitization, something which was previewed by the audio industry. (DA) In order to get the DVD format established literally overnight, the studios had to work with the mass marketers, (WalMart, KMart,Target,etc) and they sold movies for $15 or less. These retail giants knew they were in the catbird seat and demanded that new releases be included before they would stock this new format. Overnight $104.95 VHS new releases were available as $19.95 DVD new releases.
    What was accomplished by this DVD deal was to devalue new movie releases to 1/5. The side effect of this was the motivation to over saturate the market to make up the difference. This caused another problem addressed by ebay and amazon, cheap used movie dumps via used media brokers, which further stressed the value of a movie.

    Another side effect of digitization high speed replication was it also allowed high speed/cheap piracy via recordable DVD and internet distribution. The logistics of DVD allowed for mail order sales and rental as well as viable vending machine operations. All these approaches involve the removal of the human labor factor as the premise for their marketing advantage. The result of thousand of jobs being lost in the video rental realm.

    When all these new access came into play, the big box corporation found that it was beneficial for them to shrink their movie operations to the extent that alarmed the studios about the seriouly eroding physical presence and sales of new DVD releases. History of home video demonstrates that package entertainment(VHS,DVD) sales were noticeably more profitable than a electronic mediums. The current actions by MGM are not attempts (in my opinion) to prevent people from viewing movies, but rather to provide a release schedule to bolster their dangerously sagging DVD sales market.
    In the early days of home video there was an orderly release schedule and equally orderly access to home entertainment which facilitated the market very well. Home entertainment had much more value. The digital age has injected mass confusion in this process, much of this confusion is illegal distribution.

    I hope this confusion will be settled for the benefit of all, however I will admit to having no better answers than MGM.

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