Yesterday Netflix became the first, and perhaps only, rental outlet to agree to Warner's proposed 56 day delay from the time a movie is released for sale on disc to when it's available to rent. Previously Netflix and Redbox had both agreed to a 28 day window.
Redbox, however, has not agreed to the new terms. That's not surprising considering they were already considering ditching the arrangement when their agreement ends at the end of this month.
If they opt to skip a new deal with Warner entirely, Redbox would actually be able to get new releases sooner by purchasing them from alternate sources. In fact, last October a company spokesman indicated they were prepared to do just that.
Dish Network owned Blockbuster also appears to be balking at Warner's new plan. Of course they were already fighting Warner over the 28 day window, which was extended to brick and mortar rental outlets last year.
Of the three companies, Netflix arguably has the least to lose from extended release windows, while Redbox probably has the most at stake. Netflix relies more on variety for their revenue, while the limited selection offered in a kiosk means Redbox must focus on the most popular titles as much as possible.
Speaking to Bloomberg, entertainment industry analyst Eric Wold pointed out that any additional disc costs for Redbox from opting out of the deal would likely be offset by dropping other conditions of the current agreement. Currently they are not allowed to sell used Warner discs and are required to buy a certain number of straight to video releases.
Written by: Rich Fiscus @ 11 Jan 2012 10:56
