Source: I Watch Stuff

If you are a fan of the movie rental service Netflix, you may not be a fan of the deals they have been making lately.  Recently they solidified a deal with Warner Bros where Netflix would delay the release of brand new DVD’s for 28 days, so the studio has a full month to try to make more money by selling them.  In return, Netflix gets the DVD’s at a lower cost giving them a cheaper per unit price.  This makes sense for both parties involved, especially Netflix who has been dominating the movie rental service and now online streaming service lately.  Here at the banter, we predicted that because of the success of the deal on both parties, that it was only a matter of time before of studios got in on the action.

Fox and Universal both signed deals with Netflix delaying new releases for 28 days.

Both studios signed almost identical deals as Warner Bros did regarding the release of new DVD’s that could be distributed on Netflix.  But it may not all be as bad as it sounds.  With this deal, Netflix is actually going to offer more streaming content from both these studios.  Now that sounds great in theory, of course depending on what types of movies they release to stream.  Clearly it’s not the new releases, and most of the older movies service no interest to me.  Not saying I wouldn’t like a larger library to scan through.  When I have found a movie to stream via my PS3, I think it’s great and the service is excellent.  But they come few and far between.  Hopefully this new deal makes more movies I actually would want to watch available.  I would rather have Netflix work on improving the quality of the stream first, but that’s just me.

What do you think of Fox and Universal signing deals with Netflix?

Anti-Piracy is a big issue in Hollywood as the studios are potentially losing millions each year when users illegally download their movies online .  It’s hard to believe when we hear movies like Avatar are breaking financial milestones and Hollywood seems to be up despite terrible movies coming out.  But the truth is, technology is leading the way towards illegal downloads and it doesn’t look like it will be stopping soon.  And why not?  Spend an hour downloading a decent quality new released movie and watch it for free, or spend $10+ to take a chance on a possible mediocre movie.

Well Warner Bros UK is leading the way to take a stand against anti-piracy and is building a team of aces to crack down on it.  They are hiring interns for a 12 month position who are responsible for finding these bit torrent sites and learning the ins and outs so Warner Bros can take actions against these sites and to hopefully decrease the amount of online piracy that is going around.  The IT literate students needs to be experts in file sharing technology.  They will have additional responsibilities in researching these sites and developing technologies scouring the internet and finding sites and ways to crack down.  This is an extremely bold move by the studio and I am surprised that we are not seeing more of this from studios.

I mean the government looks to ace hackers when developing security programs for top secret government sites so I don’t see why studios have been taking so long.  Regardless of the efforts of the interns or full time employees who may be responsible in leading the charge, hackers and IT studs will always improve and alter the technology to be one step ahead.  It’s a cat and mouse battle between the two and the distance seems to be getting shorter although I always think that there will be ways to get movies illegally.

Here’s the job description for the internship:

“During the 12 month internship, duties will include: monitoring local Internet forums and IRC for pirated WB and NBCU content and in order to gather information on pirate sites, pirate groups and other pirate activities; finding new and maintaining existing accounts on private sites; scanning for links to hosted pirated WB and NBCU content and using tools to issue takedown requests; maintaining and developing bots for Internet link scanning system (training provided); preparing sending of infringement notices and logging feedback; performing trap purchases of pirated product and logging results; inputting pirate hard goods data and other intelligence into the forensics database; selecting local keywords and submitting local filenames for monitoring and countermeasure campaigns and periodically producing research documents on piracy related technological developments. Various training will be provided.”

Bailouts are taking over the country as a way to help out the big boys stay in business and rework themselves with the competition.  We saw the US government bail out the banks, now we are seeing the same thing happen with the movie industry.  I have spoken a lot recently about Blockbuster’s bankruptcy problems and how the one time mega movie rental company is struggling to make ends meat.  But Hollywood flew in to the rescue to help the big dawg stay afloat.

Warner Brothers recently pressured companies like Netflix and Red Box into delaying sending the companies their latest DVD releases for 4 weeks to hopefully persuade customers to buy DVD’s instead of rent them.  Now Warner Brothers went ahead and made a deal with Blockbuster allowing the company to rent out new DVD’s and Blu Ray movies to customers four weeks before Netflix and Red Box.  They will just be getting the new DVD releases the day the movie comes out, which could persuade customers to flock to Blockbuster to rent a new release.

Here’s BB CEO James Keyes in an interview on this deal with Bloomberg: “The studios appreciate that we are the only business that has the ability to offer cross channels…That enables us to give consumers access to movies when they want it and where they want it.”

I don’t know the specific outlines to the deal, but am unclear of why Warner Brothers would make this deal.  Unless Blockbuster is paying them some ridiculous amount of money (which there is no way the company could afford it) what is the benefit to Warner Brothers?  Blockbuster going out of business doesn’t hurt the movie rental business, it just is adapting in new directions.  For Blockbuster, this will help in the short run, but inevitably the company will be hitting the tanks sooner than later.  This may delay it a few months, but customers of Netflix and Red Box are not going to be going to Blockbuster in the masses just to rent a new release a few weeks earlier.

What are your thoughts on Warner Brothers making this deal with Blockbuster?

Red Box is the latest victim to the pressures of Hollywood studio giant Warner Brothers.  The shark just ate the little fish of Red Box and is making them delay the rental of new movie releases to 28 days later in order for the studio to try to sell more DVD’s in that time period.  There have been rumors that Warner Brothers was going to force this type of deal with Red Box.  Warner Brothers already delayed new movie releases with Netflix.  The difference is Netflix is rapidly growing their online streaming movies and new releases is only about 30% of their movie rental service distributions.  Many people like myself use the service more to find older and more obscure titles.

Red Box fully relies on new releases and fans of the service love how the kiosks can be found at local stores they normally shop at, and for only $1.  Now with this deal, it will scare users away, really hurting the company big time.  This is total crap.  Warner Brothers is killing a quality and inexpensive service that customers love because it is trying to make more money by selling crappy DVD’s no one wants.  People are getting smarter, and with so many rental options, itunes, and illegally downloading movies, why pay the money to own a crappy movie you will watch once and never again?  Not worth it, DVD’s are dying.  The only DVD’s I don’t mind getting are the classics you find in the $4.99 section in Best Buy.  Other than that, I haven’t bought a new DVD in well over a year, and a lot of that has to do with Netflix.  This deal will not make me buy DVD’s again, and it won’t change Red Box customers minds either.  Sadly I wouldn’t be surprised if other Hollywood studios do the same type of deal.

Here’s what Warner Brothers had to say.

Warner Bros. Home Entertainment Group and redbox today announced a new multi-year distribution agreement that will make Warner Bros. new release DVD and Blu-ray titles available to redbox customers after a 28-day window. The agreement also marks the end of the lawsuit that redbox filed against Warner Home Video in August 2009.  Below is a copy of the press release with additional details.

What do you think of Warner Brothers bullying Red Box?