Warner Bros. Claims That Annoying Customers With 28-Day Rental Delay Is Working
from the correlation? dept
Warner Bros. studio was among the more adamant about getting Netflix, Redbox and others to delay rentals of movies until 28-days after the DVD release, in the hopes that it would drive more people to buy. We suggested that was pissing off customers, just at a time when they’re discovering they have (perhaps not very legal) alternatives, and it probably isn’t a great business strategy. However, Khyle points us to the news that Warner Bros. CFO is claiming success with the program, claiming that DVD sales are up 15% following this strategy.
Of course, that leaves out all sorts of important details. Beyond the simple correlation ≠ causation issue, there are so many other variables here, I’d be hesitant to believe that the higher sales were due mostly to this delay. Perhaps there was just a popular movie that people really wanted to own when it came out. Or perhaps there were other promotions. Or, maybe, it’s just a dead cat bounce. Either way, let’s wait and see before declaring that pissing off your customers so much is a good idea.
The best part, though, might be the confident quote from the guy:
“You make money in the film business by putting your content in appropriate windows that matches up with the way consumers like to use it.”
Thing is, he’s got it wrong. It’s not the “windows,” but the different convenience and values that people consider. You can offer “the way consumers like to use it,” all at the same time, if you want. The studios aren’t doing this because they’re so in love with the “windowing” system as a way to price differentiate, that they keep wanting to introduce more and more windows. At some point they’ll realize that this is really dangerous short-term thinking. Pissing off people eventually comes back to bite you.
Filed Under: delays, movies, windows
Companies: netflix, redbox, warner bros.
Comments on “Warner Bros. Claims That Annoying Customers With 28-Day Rental Delay Is Working”
it may be working for Netflix
I thought of this very subject today when I saw news that Netflix signed a similar deal with Sony. Sony gets the delay and Netflix gets more access to streaming the Sony catalog.
This is a win for Netflix and a win for the consumer in that the expanded streaming is what the consumer wants (or at least what I and my friends want). Seriously, who actually uses the DVDs from Netflix anymore?
http://www.electronista.com/articles/10/10/06/netflix.agrees.28.day.sony.delay.for.more.streams/
Re: it may be working for Netflix
I sure don’t use the DVD feature, nothing but streaming for me. Actually I did receive one DVD odd thing is I never ordered it – I figured I must have fallen asleep on my mouse and queued it. Lol.
Re: it may be working for Netflix
We just got Netflix in Canada so streaming is the only option we have up here. Now if only these deals would mean Netflix would add some actual content up here it would be great! I’ve been looking for an option for legally obtaining movies and TV programming, so far Netflix isn’t it and lord knows I’m not paying $7 to rent a movie from Blockbuster.
oH I don't know
When you want to watch something and you’re at Target and Netflix won’t have it for some time, you toss it in the cart. Not everyone is as cheap as the folks who comment here. I think it’s plausible but the domain is so complicated that we’ll never really know.
Re: oH I don't know
Only the lemmings just throw it in the cart, the wise already have DL from any number of sites bc if it’s on dvd it’s on the net.
Re: They need to get over themselves.
I am not going to spend $30 on a movie just because the rental is not readily available. If I am willing to spend $30 then I’ve already got that movie on pre-order anyways. Trying to sabotage Netflix doesn’t really achieve anything. So something will be added to the end of my rather long queue later rather than sooner.
Not a big deal really.
The studios have an overinflated sense of their importance and the value of their product.
Re: Re: They need to get over themselves.
If I haven’t seen the movie, chances are I decided “wait until video” when it was in the theaters. I’m most likely not going to buy that movie anyway. That’s why it’s on my Netflix list. I either see movies in the theaters or via DVD rental.
If I’ve already seen the movie, loved it, and want to own it so I can watch it again and again, I’ll wait until it’s in the stores and not bother renting it. There are very few movies in this category. I don’t own many movies for this reason.
Such release windows don’t influence my buying behavior because I don’t usually buy DVDs.
Re: oH I don't know
I think that the windows are lame, but in my (anecdotal) experience, it seems to work, mainly because my Better Half is too impatient.
I still love her though 🙂
On the other hand I love how the amount of streaming options has boomed for Netflix.
Why are you complaining?
I’m in film marketing, I don’t have a problem with the extra movie window. The extra 28 days mean I will have to add people under me to find ways to educate customers that they can get the movie earlier. Along with creating special content, co-op marketing and T-Shirt deals, I should be able to hire ten to twenty people to take advantage of the new release window.
I know it’s hard to imagine, but Mike, for a moment, imagine having a Pizza delivered and as a “most valuable customer” you get a coupon for a “Still In The Theater” rental deal that can be streamed to your TV. With this new window, this is very much possible!
Re: Why are you complaining?
fuck you.
thats what the customer says.
I’m the customer. thats what I just said.
you want to know why? cuase you just made my experience worse, and it cost me by adding in extra overhead.
so fuck you.
Re: Why are you complaining?
It was possible without the 28-day delay too.
Re: Why are you complaining?
That makes no sense to me.
First, you’re in marketing so its easy to just dismiss everything you say as spin and conjecture. And you don’t understand your audience so your idea is flawed; usually marketers what to get their product in the hands of as many people as they can. Windows limit consumption. Period. They are counter intuitive to what marketing wants.
But beyond that, you’re actually saying that increasing your costs (by hiring people) just to “educate” them on the movie being available for purchase is the way to a profitable business. Why would you increase your costs like that? You just hired over a million dollars in resources on top of your normal production costs (figure $80 to $125k base salary & double that for benefits). And its only going to net you a few sales, if that, because people will know it will be out on Netflix for rental or stream for free in a month.
Those that want to buy the physical copy (or digital if they want) are going to do so with or without the window. Those who would never buy the DVD download illegally if they want it right away or wait for Netflix – 28 days in a queue of 100s of movies isn’t going to phase ANYONE.
So you just increased your costs and got nothing for it. Good job!
Also, your promotion example ignores the fact the movie is already available for free on the internet. And streaming to a TV will happen with or without a coupon.
Your job as a marketer is to get that movie to as many eyeballs as possible. Don’t limit it by DRM, windows, targeted release partners, or whatever the heck they are.
Re: Why are you complaining?
I know it’s hard to imagine, but Anonymous Coward, for a moment, imagine having a Pizza delivered and as a “most valuable customer” you get a coupon for either a Theatre ticket deal or a “Still In The Theater” rental deal. Just choose which is the most convenient to you. With this new simultaneous release, this is very much possible!
You see, it is all about giving the customer choice.
As to the first half of your comment, did not understand what you were talking about. Can you rewrite into some semblance of loigic, or even English.
Re: Why are you complaining?
I know it’s hard to imagine, but Anonymous Coward, for a moment, imagine having a Pizza delivered and as a “most valuable customer” you get a coupon for either a Theatre ticket deal or a “Still In The Theater” rental deal. Just choose which is the most convenient to you. With this new simultaneous release, this is very much possible!
You see, it is all about giving the customer choice.
As to the first half of your comment, did not understand what you were talking about. Can you rewrite into some semblance of loigic, or even English.
Re: Why are you complaining?
“I’m in film marketing, I don’t have a problem with the extra movie window.”
Of course you don’t – that’s why you’re the problem.
“The extra 28 days mean I will have to add people under me to find ways to educate customers that they can get the movie earlier”
It’s been said already, but f*ck you. I don’t need “educating”, I just need the product I wish to see. If I on’t already wish to buy it at full price, I will either rent it or wait 6 months for the price to drop. YOU need educating as to why withholding your product is a great incentive for people to “pirate”.
“Along with creating special content, co-op marketing and T-Shirt deals, I should be able to hire ten to twenty people to take advantage of the new release window. “
Why, exactly, does forcing people to wait for a rental make this possible? Be specific – I know you’re in marketing so it might be hard to not bullshit, but try to respond without pretending that withholding product from me is somehow beneficial to me.
“I know it’s hard to imagine, but Mike, for a moment, imagine having a Pizza delivered and as a “most valuable customer” you get a coupon for a “Still In The Theater” rental deal that can be streamed to your TV. With this new window, this is very much possible!”
Again, why is this not possible without the window?
Re: Why are you complaining?
Meanwhile, I’ll be watching those movies for free from Bittorrent or some other P2P network in High Def quality, a day before the theater release.
That’s why release windows don’t make any sense! Because it hampers with what many consumers want.
And P2P networks are more than happy to satisfy that demand.
BTW, I must congratulate the people behind Inception.
It apparently took about 3 weeks before that movie turned up on p2p networks in a decent enough quality. (and before anyone condemns me, I was merely curious how long it would take, I had already watched the movie twice in the cinema)
Re: Re: Why are you complaining?
But that was the case only with Inception, almost every other big time movie production, that I know of, was on torrent networks before, on the day itself or very shortly after the theater release.
The Power of You
Time-Warner claims through its ads that it is empowering YOU, the consumer since Time-Warner makes these movies available to YOU before other services. So how are they empowering me by eliminating my freedom to rent a movie from another source. Orwell Newspeak strikes again. What a bunch of crock.
What seems to missing from this 28 rental delay discussion is the concept of restraint of trade, or something similar. With the free-market companies are not supposed to collude to restrict consumer actions. This type of collusion along with ever more onerous so-called intellectual property is reducing the consumer to a “managed” revenue unit.
Re: The Power of You
Immediately after posting I used my fabulous Time-Warner remote control, it has a very irritating “undocumented feature”. If you are on a premium channel, you cannot use the “exit” button to exit the program guide, you have to find a “free” channel. What is the sense in disabling the remote’s exit button??????
I don’t buy DVD’s anymore and I have a Netflix account for the express purpose of watching DVD’s. I would have really like to watch the new Superman/Batman DVD but I have to wait til later this month. The extra window hasn’t made me go out and buy the DVD, it just made me wait and extra 28 days for no reason.
Do Stop Being Such Sheeple
Come on people, do not allow yourselves to be so easily manipulated. Never buy any movie until it has been out for at least a year. Stop being needy. It does not matter a toss if you do or you do not see any recent movie. It will still be there in a year’s time. Set yourself a firm upper price you are willing to pay (say $5), then just walk away if anybody tries to charge you more. Check out the bargain bins. Ignore the flashy advertising. Check out the garage sales. Seriously, there is no lack of stuff available at very reasonable prices. If you miss out on some particular movie, who cares? That situation is temporary anyway. You do not have to make these companies richer. They have to get the message, “You sell us what we want for a good price, or no deal. Take it or leave it.”
Re: Do Stop Being Such Sheeple
People who use the word sheeple are sheeple.
Re: Re: Do Stop Being Such Sheeple
Better than being one of them goatles.
Re: Do Stop Being Such Sheeple
You know, that’s exactly my approach to video games. Let them mature for a while. Let bugs rear their ugly heads and let them roll out patches. Let mods start flourishing and communities forming.
Then, after a year or so, I might consider getting the game. I mean, if the game survived that long being supported by developers and the community, then it must be really worth it.
Re: Re: Do Stop Being Such Sheeple
Why does this remind me of http://xkcd.com/606/ ?
Rule No. 1 in business
Don’t piss of your customers. Rule No. 2: Don’t piss off your customers. Rule No. 3: See rules no. 1 & 2.
sound
Streaming is alright sometimes, but I’m rather fond of our 5.1 surround system with real speakers. Until they find a way to jam good audio down the tubes, I’m stickin’ to the plastic discs.
Netflix *says* 5.1 streaming is coming. We’ll see how it compressed it is, or if Comcast mangles it.
Then again, maybe that’s just what the business-types want: a choice between great sound and watching at home. If so, that will be the day movies die for me.
28 what days for what?
ya this article taking up space is annoying
Really? Netflix doesn't have Dolby Digital?
It’s hard to imagine Netflix doesn’t have 5.1.
You can get 5.1 audio over streaming with DirecTV On Demand in 1080p and it works fine on a non-throttled 5MB DSL line. Just need to let it stream at the beginning of the movie or show for 30 seconds, and you’re good to go.
I rented the original “WallStreet” from 1984 about a month ago to determine if I wanted to see the newly released “Wallstreet” in the theater. Over DSL it worked fine.
But then we changed to Comcast for their High Speed 16MB internet special and it had to buffer several times during the movie.
You misunderstand, WB Suit:
“You make money in the film business by putting your content in appropriate windows that matches up with the way consumers like to use it.”
You took your movie out of an appropriate window (Netflix first 30 days) and probably also took out the next most viable one (Netflix instant streaming).
You then act all shocked when I bypass an inappropriate window (overpriced silver coasters that my kids eat) and go directly to the best remaining option (Usenet + SabNzbd!).
You fail, sir. You get nothing! You lose! Good day, sir!
28 days of waiting? That's fine...
Once the DVD comes out, people will still pirate it anyways.
http://www.youtube.com/watch?v=1ytCEuuW2_A
Sorry WB, but you lose. Get off the stage.
You misunderstand, WB Suit:
“You make money in the film business by putting your content in appropriate windows that matches up with the way consumers like to use it.”
You took your movie out of an appropriate window (Netflix first 30 days) and probably also took out the next most viable one (Netflix instant streaming).
You then act all shocked when I bypass an inappropriate window (overpriced silver coasters that my kids eat) and go directly to the best remaining option (Usenet + SabNzbd!).
You fail, sir. You get nothing! You lose! Good day, sir!
I downloaded a movie last year was a bluray rip, once the DVD was out I rented to check it out, the thing is the rip was better quality than the DVD and it was better quality than the TV channel, I can see why people go the pirate way, they get a great experience out of it without all the drama.
You think that people doing this as a hobby or for the lulz would do a worst job than professionals, nope is the other way around and until that changes piracy will be big and scary for a lot of folks.
What will those people say when someone do a comparison of the pirated product and the original and find out that the pirates are doing a better job at delivering the content in higher quality?
Will they call the spin doctor’s to smooze things?
Because right now everyone can see how they are being duped, they just need to compare it with the competition and does not look good for the monopolists.
Seems a 28-day window will invariably turn into a 21-day window next year, and 14 the year after, etc. The windows HAS to get smaller, so complaining about how there is a window now is as fruitless as the studios insisting it won’t eventually be reduced to nothing.
It’s terribly amusing though watching distribution models crumble before our eyes. I haven’t been in a theater in years, and likely never will visit one again. I haven’t owned a TV in 11 years, and the idea of putting a large display in my home is as foreign to me as buying a typewriter.
Next time check your facts, not your pre-concieved notions
So this plan went into effect in January? Well why don’t we check the top selling DVD’s for the year and see what comes up shall we?
http://www.the-numbers.com/dvd/charts/annual/2010.php
Oh well look at that! The Blind Side, Hangover, Sherlock Holmes, Book of Eli, Clash of the Titans, Time Travelers Wife, etc, etc, all Warner Bros, all in the top, all released since this delay went into effect. All unavailable for streaming on netflix, some good, most not.
I think the evidence speaks for itself. It works.
Re: Next time check your facts, not your pre-concieved notions
???
And that is different from the other years how?
http://www.the-numbers.com/dvd/charts/annual/2009.php
Don’t tell me a 10 points is statiscally relevant
Re: Next time check your facts, not your pre-concieved notions
Oh I get it, this is a joke or sarcasm attempt right?
Re: Next time check your facts, not your pre-concieved notions
Oh well look at that! The Blind Side, Hangover, Sherlock Holmes, Book of Eli, Clash of the Titans, Time Travelers Wife, etc, etc, all Warner Bros, all in the top, all released since this delay went into effect. All unavailable for streaming on netflix, some good, most not. I think the evidence speaks for itself. It works.
Correlation != causation.
Re: Next time check your facts, not your pre-concieved notions
It’s kind of hilarious that your blatantly poor “evidence” was already addressed in the post and yet you chose to attempt to use it anyway.
Your stupidity speaks for itself, I suppose.
Re: Next time check your facts, not your pre-concieved notions
“Oh well look at that! The Blind Side, Hangover, Sherlock Holmes, Book of Eli, Clash of the Titans, Time Travelers Wife, etc, etc, all Warner Bros, all in the top, all released since this delay went into effect.”
…and?
What were the movies before it went into effect? Several of the films mentioned were surprisingly high box office successes at the theatrical releases – how does this compare with the previous movies?
Withholding product from customers does NOT make them want to buy. pirate, maybe, but not buy. It’s as equally likely that the movies in question were just popular and more importantly GOOD films that people wanted to buy.
“I think the evidence speaks for itself.”
When you come up with some actual evidence rather than random correlation, we’ll see. You people have yet to present any actual evidence.
Why are you complaining?
>>As to the first half of your comment, did not understand what you were talking about. Can you rewrite into some semblance of loigic, or even English.
We work on an “As Is” basis. And that’s what you get for free. My company’s normal rate is currently $350 an hour.
However, you may benefit from our $800 an hour package which includes a “interpreter” and also a “comprehension assistant”.
28 day rental delay
so essentially this person is saying piracy is down because people are buying more dvds
If people are truly buying more DVDs it’s because their local Blockbuster went out of business and they haven’t figured out where the Redbox is so they pick the movie up at Walmart.
These aren’t Netflix customers, who are happy at home streaming really good movies from the last 100 years of filmmaking, not just that latest garbage from Hollywood. They really don’t care about a 28 day window.
It’s nice not having shelf fulls of discs anymore.
Idiots all...
Let’s face it… anyone with even the slightest bit of intelligence will pre-order from some place like Amazon or Walmart and have it the day it’s release… for half the normal price.
IF… (and that’s a BIG IF)… it’s a movie you really want. And even if it was available on Netflix, I’d STILL buy it for the skipped scenes, alternate endings, uncut versions, etc.
That’s the key. OFFER value. I like value.
I like the above poster...
He got some brains, unline Warner Bros.
Heres how it works…
As a consumer, I see a company BLATANTLY make a money grab that costs me more, and causes inconvienence to me. What do I do?
I torrent every movie from Warner Bros from now on, and I will never give them my money again.
I like the idea of waiting until its on sale or looking to a garage sale, in this economy, there are a lot of other people who could use your money OTHER THAN WB CEOs. Nuff said.
Back to my torrenting, you should all do it, in silent yet effective protest against the machine. I will fin with a nice quote…
“There’s a time when the operation of the machine becomes so odious?makes you so sick at heart?that you can’t take part. You can’t even passively take part. And you’ve got to put your bodies upon the gears and upon the wheels, upon the levers, upon all the apparatus, and you’ve got to make it stop. And you’ve got to indicate to the people who run it, to the people who own it that unless you’re free, the machine will be prevented from working at all.” Mario Savio, 1964.
piss off the customers
it is sad that corporate america has bain wash you the customer in thinking they are doing whats best for you
it is sad tha you the customers who have the money have give up your power to the greed of these corporation
you the buying people dont have no power any more you bend and give your money freely to these greedy corporation that have no respect for you as a buy public
you are wrong when you say we who wait for netflix are cheap you are oh so wrong we have the power and refuse to give the greedy corporation we have the patience and we lose less than you who are bain wash on you toss the dvd in your target basket and you see it what else are you going to do with it you cannot sell it and regain your money it stays there and gather dust SO WHO IS THE FOOL my friends not us cheap and waiting the 28 days!!!!!!!!!
piss off the customers
it is sad that corporate america has bain wash you the customer in thinking they are doing whats best for you
it is sad tha you the customers who have the money have give up your power to the greed of these corporation
you the buying people dont have no power any more you bend and give your money freely to these greedy corporation that have no respect for you as a buy public
you are wrong when you say we who wait for netflix are cheap you are oh so wrong we have the power and refuse to give the greedy corporation we have the patience and we lose less than you who are bain wash on you toss the dvd in your target basket and you see it what else are you going to do with it you cannot sell it and regain your money it stays there and gather dust SO WHO IS THE FOOL my friends not us cheap and waiting the 28 days!!!!!!!!!
But it may work, even if it is annoying.
People are sometimes impatient so yes, they will pay more if they have to and if they want to see the show earlier. Of course there is the issue of unauthorized copies but the general premise that you don’t annoy your customers is not always true.
28 day delay would obviously help sales.
1) Delay Pisses off consumers and drives them download movie illegally.
2) As has been said over and over and over again on techdirt that piracy tends to lead to more sales.
The more you piss people off and make them resort to downloading the better your sales do. While they cant just outright admit it cause people like the mpaa would be all over them. They are actually making a wise business decision.
Annoying Practices -> Piracy -> Profit
Re: Re:
You just *blew* my mind!
i still think the consumer wins
What i was trying to explain earlier is that WB clearly loses in this as they are pissing off their customer. But i keep thinking about the previous stories on this and how it was questioned why Netflix would agree to it.
Obviously it’s because Netflix is looking forward. More and more entertainment is moving to streaming, so increasing their access to movie catalogs for streaming (at a lower price to them as well) definitely benefits the consumer and Netflix.
So for as dumb as it seems for Hollywood add another window, it seems like a smart move by Netflix to leverage this window to their advantage for streams.
One thing I don’t understand is this fixation with streaming over downloading. I prefer downloading because that way I don’t have to be online to watch a movie, I can watch it regardless. I’m surprised more people don’t seem to have seen this inherent limitation that streaming has.
Re: Re:
I can’t speak for everyone but there’s a few reasons in my mind. The first is price – downloading is usually a “purchase” while streaming is a “rental”. So, streaming is usually cheaper as you’re not keeping a copy of the movie on your device.
The second is accessibility. DRM screws you royally, and so far nobody’s offering legal, DRM free, non-public domain downloaded movies to my knowledge. The streams work on a greater number of systems. Netflix also offers access through a range of devices – anything from a Wii to certain models of TV. Try doing that with downloaded media.
The third is convenience. When you download, you have to wait for the download to finish. So, pick your movie, maybe wait an hour or 2 depending on your connection speed then watch. With streaming, you wait a few seconds for buffering, then you’re watching it.
Re: Re: Re:
@ With streaming, you wait a few seconds for buffering, then you’re watching it.
No, you are not. Depending on the connection speed.
I was wondering why the selection @netfix sux
I decided that I would give netflix a try. But the selection was very poor. So I was going to drop them. It seemed like a good idea but it looks like it was executed poorly. My guess is that this is another attempt by Hollywood to sabatage paid down loads.
Other then that the movie stram was unrerliable so I suspect my cable company was messing up the transfer.
Too bad. It would have kept a lot of people off torrents.
28 Day delay on rentals
There still are some boxes out there that have the new stuff!!