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Behind the Netflix-Warner Bros deal

New York Times’ Bits Blog has the details:

He says that Netflix was willing to compromise on the issue because “our number one objective now is expanding the digital catalog.” Netflix’s streaming service won’t receive any newer movies from Warner – “it’s not that much of a breakthrough,” Mr. Hastings said – but it will get a larger piece of the Warner back catalog.

The issue at hand is Netflix agreeing to a waiting period before they start sending out new releases on DVD. Warner Brothers wants a window during which customers have to buy DVDs in order to watch them when they are initially released. In exchange, Netflix gets access to more movies that they can stream instantly, and better prices on DVDs.

I am a big user of the Netflix streaming feature and I almost never watch movies right after they are released, so this deal is a win for me. More than that, I think it’s a win for customers in general in the long term. It would be nice to have every movie available instantly online, but we’re a long way from there. Any deal that gets the studios more accustomed to streaming of their movies on demand moves us closer to that ideal.

This deal is bad for people who want movies from Netflix as soon as they’re released to DVD, but a good deal for pretty much everybody else. Even if you don’t stream movies now, you probably will soon.

3 Comments

  1. Eventually the studios will realize that delaying streaming doesn’t impact DVD sales at all and they can make more money providing instant streaming immediately and this restriction will be lifted. They are used to their old business model and so fearful of becoming irrelevant that they are being overly cautious.

  2. Another thing to realize is that most of netflix’s good streaming movies are a result of a deal with Starz. This deal was not popular with the movie labels, and will be going away when the Starz contract with the labels needs to be renewed.

    If Netflix doesn’t cut deals with the individual labels, their streaming service will get much worse.

  3. Was going to sign up for Netflix again, but it’s back to The Pirate Bay and Demonoid for me now because of this delay.

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