Netflix, Warner face lawsuit over DVD delays

An agreement between Netflix and Warner Brothers Studio was finally supposed to bring an end to a DVD distribution argument between the two parties – but now a class-action lawsuit has been filed against both parties by a New York woman who said the 28-day rental delay is a “scheme to restrain trade.”

The lawsuit, filed by Susan Uman on March 3 in the U.S. District Court of Southern New York in Manhattan, claims Uman’s Netflix subscription is no longer worth the value now that new Warner DVD and Blu-ray movie releases will be delayed at least 28-days.

The No. 1 movie rental business thought it alleviated all issues with Warner — but instead ended up in the cross hairs of angry movie viewers.

Netflix, Warner face lawsuit over DVD delays

Instead of continuing a battle with Warner, Netflix decided to instead focus on obtaining more streaming movie and TV content for subscribers. More and more Netflix subscribers are testing the online streaming service now using set-top boxes, game consoles, TV’s, computers and other streaming portals.  Almost 48% of the company’s 12 million subscribers used streaming services last December, which is a 20% increase over Dec. 2008.

I don’t know how well this lady’s argument will work in court, but I’m interested to see if legal pressure will force Netflix and Warner to remove the 28-day new release delay agreement.  I doubt this class action lawsuit will be a serious issue for either company, but it shows that subscribers are paying attention to their behavior.

Redbox also agreed to a 28-day sales delay window for Warner and other movie studios — it hasn’t been targeted yet, but could face a similar class action lawsuit from customers.

The 28 day delay is a scheme by movie studios to try and increase sales of new release DVD’s, but as we’ve opined before, we doubt this will help bolster sales much and it will probably lead to more piracy instead.