Some Hollywood movie studios are receiving financial benefits after forcing Redbox, Netflix and similar services into 28-day new release rental delay agreements.
The 28-day rental window gives movie studios a crucial extended period of time to sell DVD, Blu-ray Discs and video on demand transactions. Digital movie distribution is a major market that movie studios are closely scrutinizing, with Bewkes noting that Time Warner sees marketing room for all platforms; DVD/Blu-ray and VOD.
"We saw considerably higher sales [for the titles] in weeks two-to-four than we used to see in the previous week-by-week distribution of sales,” said Jeff Bewkes, Time Warner CEO, during a recent analyst call. "The net results of pushing new releases back looks quite good. The extent of the windows is that it moves demand to sell through and transactional VOD.”
In related news, NCR has stated that they are now wary of planning for additional Blockbuster Express kiosks, after they finish rolling out 3,500 of their already planned 10,000 kiosks in total. They may opt to focus on new digitial distribution plans going forward, in place of kiosks. Despite NCR's reluctance, CoinStar announced Redbox rental kiosks will find their way to more than 6,000 nationwide CVS/pharmacy locations.
The rental market only has room for so many rental kiosk services, and must now deal with evolving demands from customers. Consumers want all of the traditional features along with the option of renting Blu-ray movies, video games, and movies stored on flash memory. Redbox currently leads the market, and it’d be difficult for more than one or two rival services to succeed in the business.
It's been somewhat surprising to see how willing companies have been to work together to market products to consumers in the living room. Netflix and Redbox both helped shake up a changing market, and movie studios, rivals, and copyright holders all have to adjust.
Movie theaters also want to ensure VOD sales windows remain in place to ensure movie goers continue to visit local theaters.
The news that the 28 day windows are actually boosting packaged media (DVD/Blu-ray) sales is a bit surprising. In a down economy, I would've expected most consumers to just wait another month before renting a new release DVD, rather than going out and purchasing it.
What are your thoughts on the new release delay windows?
