Streaming Rights On Whitney Houston Movie NOT Pulled In Order To 'Make Really A Large Amount Of Money On DVD Sales' [Updated]

Movie Industry

from the profiting-off-of-death dept

Update: Netflix denies this story, though the reporter stands by it. See update at the end.

We covered how Sony Music UK jacked up prices on Whitney Houston’s music minutes after her death — then changing them back and apologizing. However, in an even more extreme case, it appears that whoever holds the copyrights on the Whitney Houston movie, The Bodyguard has pulled those rights from Netflix, where it had been streamable (found via Karl Bode, but kudos to Dan McDermott who noticed the problem and found out the details from Netflix). The reasoning is that they figure lots of people will want to buy it now, and this is a chance to cash in on her death:

Now, watch the copyright holder complain that there’s too much infringement of the movie as well…

Update: Apparently Netflix is denying the story though McDermott — a long time reporter stands by the story. Netflix claims that the streaming rights to the movie went away last year when a licensing deal ended (and it is true that Netflix has lost some streaming rights in the last few months, though I have no idea if this is one of them). However, McDermott insists that he got the story from Netflix directly. As he told Andrew Couts at Digital Trends:

“I publish three newspapers and first started in news when I was news director at WLVA in 1987. I was aware of the sensitive nature of the story and was cautious and responsible,” McDermott told us via email. “The quote I printed is accurate. I cannot speak to whether the Netflix representative was telling me the truth but I asked him to verify what the Netflix users were saying (that it was pulled after her death) and the guy came back and said what he said. I tripled checked to get the quote accurate.

“He said that he had checked with two supervisors and that the ‘main’ one told him why it had been pulled.

“Personally I believe that the kid told me what his supervisors said. I can’t imagine that they were pulled after her death in some bizarre coincidence.

“Also, it is important to note that Netflix is not the bad guy in this. Unless they lie now.”

I guess it’s possible that Netflix is right, and there was confusion on the part of the supervisors…

Update 2: Indeed, it looks like my guess was correct. Netflix was right, and the supervisors of the customer service guy were wrong. Dan McDermott has admitted that the report the guy gave him appears to be wrong. He reported it correctly, but Netflix staffers gave him incorrect info. The movie was pulled from streaming back in January…

Filed Under: death, dvds, movies, music, prices, streaming, the bodyguard, whitney houston
Companies: netflix

Redbox Won't Cave To Warner Bros. Demands; Will Buy WB DVDs From Other Sources And Rent Them

Copyright

from the good-for-redbox dept

With all the talk of movie studios trying to create a new window between DVD releases for sales, and DVD releases for rentals, it’s sometimes forgotten that Redbox tried to fight this fight a few years ago… and ended up in a big legal battle with the studios, before caving and agreeing to delay rentals. However, it appears that the company may be ready to fight back again. Rather than accept an increased 56 day window with other annoying restrictions, Redbox is apparently telling Warner Bros. to take its dumb idea and to shove it, because it’ll just buy the DVDs from alternative sources:

However, after lengthy talks between WB and Redbox this month, the companies couldn’t come to an agreement over the new demands from the studio.

Instead, Redbox has opted to turn to “alternate means” to purchase the films on DVD and Blu-ray it makes available to rent for as low as $1.20 a night through its more than 28,000 kiosks — and offer them the same day they hit store shelves to buy, according to Redbox senior VP of marketing Gary Cohen.

This could get interesting, because the last time they had this fight, the studios sought to block companies like Walmart from selling to Redbox, and Walmart put in place some restrictions to make it harder for Redbox to do this. I still think Redbox could potentially crowdsource these purchases, and get around any restrictions.

Either way, it’s stories like this that show why the First Sale doctrine is so important. Redbox should be able to buy from alternative sources and then be free to rent those movies. And that’s the case due to “first sale” rights — even if Warner Brothers wants to pretend they don’t exist.

Filed Under: copyright, first sale, movies, rentals
Companies: netflix, redbox, warner bros.

Warner Bros. Just Keeps Pushing People To Piracy; New Deal Also Delays Queuing

Movie Industry

from the are-they-that-clueless? dept

Sometimes you really have to wonder about some legacy entertainment industry execs and their thought process. Warner Bros. is the most aggressively stupid when it comes to willfully going against what consumers want and pushing them to pirate instead. It, among the big Hollywood studios has been the leader in trying to hold back rentals in the bizarre belief that if people can’t rent a video legally, they’re suddenly more likely to pony up many times the amount to buy the full DVD. This is what we call denial. And economically clueless. The latest detail, which came out last week, is that one of WB’s new conditions with its deal with Netflix isn’t just that the rentals are delayed by 56 days (up from the previous 28), but that they won’t even be able to put the delayed movie in their “wanted” queue until 28 days before it’s actually available.

Under the companies’ previous agreement, users could add discs to their queues even before they went on sale. Warner executives apparently believed that policy made it easier for consumers to wait, confident that the discs would arrive eventually.

But now when users search for Warner’s “A Very Harold and Kumar Christmas,” which goes on sale Feb. 7, the Netflix website simply says the movie is not available. Consumers will have wait until March 6 to add the film to their queues and until April 3 to get it in the mail.

What’s amazing about this policy is that it seems to provide the exact opposite incentives of what WB should want. At least, when they could put it in their queue as a sort of “pre-release” commitment, they knew they’d be getting it soon, and would have less incentive to go out and get it through unauthorized means. But, now, they won’t even have that, making it even more likely they seek the movie out via unauthorized means. WB is in complete denial if it thinks this is suddenly going to make people more interested in buying the physical DVDs.

Filed Under: delays, movies, piracy
Companies: netflix, warner bros.

WB, HBO Continue To Suck At Economics; New Policies Encourage Piracy

Economics

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?

Filed Under: delays, hbo, movies, tv shows, windows
Companies: hbo, netflix, redbox, warner bros.

Netflix Kills Qwikster Before It Has A Chance To Live

Failures

from the one-step-forward-two-steps-back dept

In a not all together surprising move, Netflix announced its plans to kill Qwikster. It cites a backlash from consumers over the plan to separate the DVD and streaming services into two brands with separate websites. The whole raking over the coals it got from the media probably didn’t help its plans, either. So before it even had a chance to live, Qwikster is dead. However (not surprisingly), Netflix plans to retain its current pricing model.

What this development really reeks of is a strong disconnect between Netflix and its customers. These are moves of a company focused on how to best benefit itself, not how to best benefit its customers. Based on the overall reaction to the price change and the service split, it looks like Netflix never took into account what its customers would think or how they would react to the change. Instead, it focused on its own situation first, and then retroactively tried to spin it in terms of how it might benefit consumers. Had it taken the time to objectively think about and plan for customer reaction rather than looking out for its own interests, it could have prevented all this bad publicity and retained many of the customers it lost. Hopefully, Netflix will take this folly as a learning opportunity and make positive changes to its business philosophy and customer relations.

Filed Under: consumer focus, names
Companies: netflix, qwikster

Counterintuitive: How Netflix Letting You Keep Movies Longer Decreases The Number Of DVDs It Needs

Studies

from the neat dept

It’s always fun to recognize how some initially counterintuitive logic makes sense. A new paper looking at Netflix’s (er… Qwikster’s) early decision that it would let people keep movies as long as they wanted, discovered that this policy didn’t just help Netflix from a marketing perspective, but also meant that Netflix had to buy fewer DVDs than if it had imposed time limits and late fees. This seems counterintuitive. After all, if people can keep DVDs forever, there’s greater uncertainty, and Netflix could, theoretically, send out a disc and never see it again. So you might think it would need to stock up in order to account for these huge chunks of time that people might keep DVDs.

The problem with that thinking is that it’s only looking at the “market” for a single DVD, rather than the larger market of all of Netflix’s DVDs, and the kind of demand patterns it would expect. The researchers looked at that, and noted that by letting people keep DVDs longer, it actually slows down the rate at which they take out new DVDs, which decreases the amount of DVDs Netflix needs. In other words, if there’s a time limit, people would return DVDs faster, meaning that Netflix would have to send another one out faster. This problem becomes especially noticeable for “hot” movies, like new releases:

To understand how Netflix actually profits from uncertainty, it is helpful to imagine a handful of idealized Netflix customers, as Bassamboo and his colleagues do in their paper. The only thing all the customers have in common is that when a hot new movie comes out, they all want it. If Netflix imposed late fees on its customers, the company could be sure that every customer who wanted a particular new release would return their last-viewed movie, and automatically be sent that new release, within a narrow window of a few days.

Bassamboo and his colleagues discovered that for a hypothetical Netflix-like service with late fees, the company would have to stock as many copies of a new release as it has customers. Given that all those customers would probably only rent it once, the company would be hard-pressed to either remain profitable or offer a compelling subscription fee.

On the other hand, when Netflix allows customers to keep DVDs indefinitely, the point in time at which they return old discs and automatically request a hot new release is staggered. Some customers are going to return a disc the day a new release comes out, while others will take a few days or even weeks to return their last movie and request the new one. The longer customers wait to request that next disc, the more times Netflix can rent out individual copies of its new releases. It is this re-use of discs, or ?multiplexing,? that makes the Netflix model possible.

Filed Under: counterintuitive, dvds, operations, supply
Companies: netflix, qwikster

Conan O'Brien Has The Inside Scoop On More Netflix Changes

Too Much Free Time

from the is-it-too-subtle dept

If you have been living under a rock for the last couple of weeks, you are probably not aware that Netflix dramatically increased its prices, separated its streaming and DVD by mail services and then branched the two services into two different companies. You have also probably missed Netflix CEO Reed Hastings’ apology and explanation of the debacle. In case you fit this bill, here is the video:

You probably thought that was the end of it.

Well, Susannah from Team CoCo wrote in to tell us that Netflix has even more up its red sleeve to make our movie viewing experience even better.

Honestly, I think having Paul Hogan come over to hang out is quite the deal for only $1.49 a month.

Filed Under: apologies, conan o'brien, reed hastings
Companies: netflix, qwikster

Netflix: We're Sorry About The Huge Price Increase, So, Uh… Qwikster!

Overhype

from the two-for-the-price-of-two! dept

Reed Hastings is very sad. I know, because today I got a very somber email from the Netflix Co-Founder and CEO (also posted here). He’s sad about the very negative reaction of Netflix subscribers to the recent fee increase. He’s also sad about something called “Qwikster” and red envelopes.

I was going to write up a post analyzing the causes of Mr. Hastings’ sadness and how he plans to make things right, but then I saw this:

Frankly, I really don’t understand the point of this apology letter. If you’re not going to do anything to address the real cause of your (former) subscribers’ dissatisfaction, why even bother bringing more attention to the issue? Seems like when you say you’re trying to “make things right,” it might be a good idea to actually try to make things right, not worse.

Filed Under: apologies, pricing
Companies: netflix, qwikster

Massive Exodus From Netflix Over Fee Increase

Failures

from the surprise dept

When Netflix first hit its customer base with the rather massive fee increase, we noted just how loud and passionate the response was. A week or so later, Netflix boss Reed Hastings insisted that they were actually surprised that the response wasn’t worse, stating:

“Believe it or not, the noise level was actually less than we expected, given a 60 percent price increase for some subscribers.”

Perhaps he should have waited until all of his customers got over the shell shock. The company is now admitting that a lot more people than they expected have canceled their accounts. Somewhere in the range of 600,000 customers bailed on Netflix over this, making it just the second time that Netflix has had a net loss in subscribers month-to-month.

While Hastings also tried to spin the price increase into a story about how Netflix was accelerating subscribers’ shift to digital, that story is falling flat with partners like Starz bailing out.

It’s beginning to look like our original statement about the price increase was the most accurate. It was driven by the ridiculously high fees that Hollywood now wants, because it can’t stand the thought that a service provider like Netflix actually should get any value from helping to drive the market forward. Instead, the content is 100% of the value, and they deserve any and all profits (and then some). It’s a classic killing of the golden goose — something that Hollywood always tries to do. At this rate, it might just “succeed” in that once again.

Filed Under: movie subscriptions, pricing
Companies: netflix

Starz, Netflix And How Industry Jealousies Strangle A Golden Goose

Movie Industry

from the we'll-see dept

In a somewhat surprising move, Starz has decided to not renew its contract with Netflix. Many other TV channels and movie studios are sure to follow as their current contracts end. Even though Netflix is somewhat braced for this, Starz was one of the few providers willing to supply newer titles, thanks to its deals with Disney and Sony Pictures. Not only that, but Netflix’s licensing deal with Starz was somewhat of a coup with its bargain-basement price tag ($30 million) which helped it get its streaming service off the ground. While this loss will probably adversely affect Netflix in the short term, in the long term it may have more of an effect on Starz.

According to Starz CEO Chris Albrecht:

Starz Entertainment has ended contract renewal negotiations with Netflix. When the agreement expires on February 28, 2012, Starz will cease to distribute its content on the Netflix streaming platform. This decision is a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content. With our current studio rights and growing original programming presence, the network is in an excellent position to evaluate new opportunities and expand its overall business.

In between all the jargon, there’s a message: Netflix isn’t willing to pay us what we think our content is worth. Unfortunately for Starz, it may soon find out that Netflix was actually paying what the content was worth. In Starz’ opinion, it can go elsewhere and make more. More accurately, Starz just has to go somewhere else.

Despite the fact that Netflix has offered $300 million for continued access to Starz content, it wasn’t enough for those swimming upstream of the cable channel. In all likelihood, $300 million would have been plenty except for the uncomfortable fact that Netflix is beating cable television at its own game. Pressure from Liberty Media (which owns Starz and invests in Time Warner Cable) to create a new, higher priced tier for Starz very likely killed the deal:

[R]epresentatives for the cable network owned by John Malone’s Liberty Media were insistent that Netflix create a new “tier” for subscribers who wanted its movies at a higher price than the $7.99 it currently charges for online video. That would have put Netflix more in line with the pricing of cable and satellite companies, a step the video company apparently wasn’t willing to take.

“Starz could have taken a check from Netflix, but there would have been pushback from cable and satellite operators and its studio partners,” said analyst Tony Wible of Janney Montgomery Scott.

Unfortunately for Netflix and its customers, the content providers seem to think that they can reset the clock back to a “simpler” time by withholding new releases in order to drum up plastic disc sales or, in the case of Liberty Media, turning its content into a “premium” in an effort to shore up its flagging subscriber base.

This all points to an incredible level of arrogance on the part of the content providers. First off, they assume the public cares about release dates, exclusive licensing deals and PPV windows. I can assure you that the public could not give less of a shit about when, where and how the content providers release their movies and TV shows. Secondly, they do everything in their power to turn back the clock to captive audiences, tied to a single television and handcuffed to a single cable box.

The public just wants access to the content in its most convenient (to them) form. The game has changed (thanks to Netflix and others) and no one feels compelled to deal with one service only for their entertainment. Liberty Media may think it can set the price for its content to whatever dollar amount is best for it, but consumers have given no indication that they like sudden price increases. In fact, consumers are finding cable to be less and less essential thanks to services like Netflix, but rather than learn from the past, content providers seem to think that new media has to play by old media’s rules and consquently, swiftly ruin everything they touch.

These members of the entertainment industry also seem to forget the file-sharing elephant in the room. (Perhaps it’s because Industry-Vision™ corrective lenses render this animal as a “scapegoat.”) If this short-sighted pursuit of DVD sales and PPV income continues, they’re going to find customers fleeing to “content providers” who can give them what they want when they want it, all at a price the entertainment industry can’t afford. And instead of being able to collect “too little,” they’ll be collecting nothing at all.

Filed Under: dowloads, movies, streaming
Companies: liberty media, netflix, starz