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HBO Makes Netflix Pay Retail For DVDs
As Time Warner Expands New Release Delay to 60 Days
by Karl Bode Friday 06-Jan-2012 tags: legal · Video · competition · alternatives
Tipped by Jon See Profile
You might recall that HBO didn't exactly rush to embrace broadband video. The company initially poisoned copies of their TV shows available for download via BitTorrent, petitioned the FCC to make DVR recording of subscription video-on demand illegal, and threatened Slingbox for place shifting technology. It took years for HBO to finally offer their HBO Go broadband video service, but they've walled it off so that it's only available to users who subscribe to traditional cable.

Now in a one-two punch for Netflix, Time Warner has decided to not only double the new release delay window to nearly 60 days (someone should tell executives that simply drives users to piracy), they're also going to stop selling HBO content on DVD directly to Netflix at a discount:

Netflix typically buys the film and TV show DVDs that it rents to customers through wholesale venues, thereby taking advantage of volume discounts. But from now on, Netflix will have to buy DVD sets of shows like “True Blood” and “Boardwalk Empire” at retail in order to rent them to customers. It's not a huge financial hit to Netflix, but it is a signal about what the competitive landscape looks like. Asked about the change, a Netflix spokesman said, “Netflix will continue to provide HBO titles on DVD and Blu-ray to our members."

This move comes as HBO and Time Warner already prevent Netflix from streaming HBO shows. HBO executives believe that by making content available to fewer people, they'll somehow retain HBO's reputation (in their minds) of HBO as a premium entity. In reality, HBO's doing what many cable operations are doing, trying to wall off and jack up the price of content in the false belief this can protect legacy business models from both piracy and competitors. Netflix meanwhile is getting into original programming, something that terrifies the folks at traditional outfits like HBO.

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spewak
R.I.P Dadkins
Premium
join:2001-08-07
Elk Grove, CA
kudos:1
Reviews:
·SureWest Internet
·Clear Wireless

Feelin' it yo!

The Reedster is feeling those icy, greedy (Entertainment industry) paws tightening around his neck right about now. I almost feel bad for the guy.

NOT!!!!!
--
The weekend is here, grab a can of beer!

n2jtx

join:2001-01-13
Glen Head, NY

HBO a Premium Entity?

ROTFLMAO! HBO (Has Been On) has not been a premium channel, IMHO, since the early 1980's.
--
I support the right to keep and arm bears.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: HBO a Premium Entity?

said by n2jtx:

ROTFLMAO! HBO (Has Been On) has not been a premium channel, IMHO, since the early 1980's.

Apparently their original programming is quite the hit, though I can't say anything on HBO has ever enticed me to even consider paying for it.
--
"Net Neutrality" zealots - the people you can thank for your capped Internet service.

Romney2012
Defeat Obama 2012-Chg we can believe in
Premium
join:2002-03-03
USA
kudos:4

Re: HBO a Premium Entity?

said by pnh102:

said by n2jtx:

ROTFLMAO! HBO (Has Been On) has not been a premium channel, IMHO, since the early 1980's.

Apparently their original programming is quite the hit, though I can't say anything on HBO has ever enticed me to even consider paying for it.

The Sopranos had me paying for HBO. But when that ended and Comcast kept raising rates, I dropped the Premium channels like HBO, Showtime, Starz, etc.
--
The nine most terrifying words in the English language are, I'm from the government and I'm here to help.
»www.politico.com/2012-election/


pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD

Re: HBO a Premium Entity?

said by Romney2012:

The Sopranos had me paying for HBO. But when that ended and Comcast kept raising rates, I dropped the Premium channels like HBO, Showtime, Starz, etc.

That's the other thing. HBO and other premium channels are pretty much married to the cable companies. If they offered good deals to outfits like NetFlix, or decided to stream their own content directly to the customers in a way that got people to cancel their premium channel subscriptions, the cable companies would be none too happy about it.
--
"Net Neutrality" zealots - the people you can thank for your capped Internet service.
Wilsdom

join:2009-08-06

Re: HBO a Premium Entity?

I think they basically get to tell cable companies what to charge. Making a cut-rate deal with Netflix or investing in their own servers probably doesn't make sense
jdjbuffalo

join:2004-01-17
Denver, CO
What the premium channels like HBO don't realize is that they are leaving a ton of money on the table. There are a lot of people, myself included, that would consider paying separately for their service if they offered it via Netflix or even as a separate streaming service.

baineschile
2600 ways to live
Premium
join:2008-05-10
Sterling Heights, MI
Game of Thrones. Its worth it, trust me.

syslock
Premium
join:2007-02-03
Ann Arbor, MI
Reviews:
·Comcast

Re: HBO a Premium Entity?

I was totally hooked on The Wire.
The shows story was amazing.

I have not had HBO since then.
HBO has not had any good content since then that is really
worth subscribing to.

HBO has a lot of dusty old content. No one cares.
Starz shells out the most cash for the first runs on cable.
Why should I subscribe to HBO for content that I can
already get free from my public library?

imtim83
Premium
join:2001-06-03
Kenner, LA
said by baineschile:

Game of Thrones. Its worth it, trust me.

That show is awesome!
talz13

join:2006-03-15
Avon, OH
I'm about in the middle of book 3 now, thanks to that show
PDXPLT

join:2003-12-04
Banks, OR
said by n2jtx:

ROTFLMAO! HBO (Has Been On) has not been a premium channel, IMHO, since the early 1980's.

Yea, I guess all those Emmies and praise from critics is all fake, huh?

Hasn't been the same since Entourage went off the air.

Maybe it's time to watch Band of Brothers again.

gballer

@reyrey.net

Ummmmmm

What is HBO anyway?
Rekrul

join:2007-04-21
Milford, CT

Re: Ummmmmm

said by gballer :

What is HBO anyway?

It stands for "Hey, Beastmaster's On!"

Romney2012
Defeat Obama 2012-Chg we can believe in
Premium
join:2002-03-03
USA
kudos:4

TW extending selling freeze from 28 to 56 days

Besides cutting off the discounts, Time Warner is also extending the freeze on sales to the rent DVD companies from 28 to 56 days.

»allthingsd.com/20120105/warner-b···-movies/

A new deal between Time Warner’s movie studio and Netflix, Redbox and Blockbuster will double the “window” for new releases. That means the services will now have to wait 56 days after the discs first go on sale to offer them to their customers, instead of 28 days.

The move is part of Hollywood’s ongoing campaign to bolster flagging DVD sales, and sources tell me the new deal is supposed to be announced at next week’s Consumer Electronics Show in Las Vegas. Warner Brothers executives have already talked publicly about extending the current window.

Two years ago, Netflix was able to argue that by delaying access to DVDs, it was able to get its hands on more streaming content, and lower prices for the discs it did buy. This time around, though, Warner won’t be granting any additional digital rights to the studios.

Kearnstd
Elf Wizard
Premium
join:2002-01-22
Mullica Hill, NJ

Re: TW extending selling freeze from 28 to 56 days

It seems TW likes to encourage piracy.

these IP owners need to learn the more you kick the cheap legal venues for watching movies in the balls the more the users will just kick you in the balls back by pirating the stuff instead.

Sadly our country has such bullshit copyright and licensing laws Netflix cant bypass this by ordering the DVDs bulk from Amazon and renting right away. because you know TW does not want those royalty payments from rentals until 56d later either.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports
dj_eric

join:2004-11-19
Kennett Square, PA

Re: TW extending selling freeze from 28 to 56 days

Actually, they can just buy them from Amazon. It's the first sale doctrine and was established under the NEBG v Weinstein lawsuit.

It's just a shame that RedBox ended up cutting a deal before their lawsuits against 20th Century Fox and Universal didn't make it to court to shove the point home.
pcme2000

join:2008-01-17
Bangor, ME
I totally agree with you!! Time Warner is getting to big for it's pants. That is crazy to almost double the time to release. Maybe i will get my movies the way others do stream them from other sites on the web as soon as they come in the cinama's

Dryvlyne
Far Beyond Driven
Premium
join:2004-08-30
Newark, OH
I don't get this approach of extending the availability "window". It sure as hell doesn't make me want to go out and buy the DVD. I have a family and a full-time job so if anything it just puts it further out of sight and thus out of mind which in turn means it just falls off my radar altogether. So sure, they can go ahead and keep extending this "window"... it'll just make me care less and less about the already sub-par content they offer.
--
In relative terms life is shorter than the blink of an eye. Remember that each and every day because in the end it's not about what you've done but how you've lived.

cdru
Go Colts
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join:2003-05-14
Fort Wayne, IN
kudos:5
Reviews:
·Frontier FiOS

Re: TW extending selling freeze from 28 to 56 days

said by Dryvlyne:

I don't get this approach of extending the availability "window". It sure as hell doesn't make me want to go out and buy the DVD. I have a family and a full-time job so if anything it just puts it further out of sight and thus out of mind which in turn means it just falls off my radar altogether. So sure, they can go ahead and keep extending this "window"... it'll just make me care less and less about the already sub-par content they offer.

I was thinking along the same lines. Oh no I can't watch Season X of Show Y for Z days after everyone else. The show (or movie) already aired (or was in the theater) long before so the water cooler talk about a new release was long along performed.
mogamer

join:2011-04-20
Royal Oak, MI

Why wait to rent?

If Netflix has to purchase HBO series DVD's at retail prices, why would they have to wait 60 days to rent them out? Just buy them on the open market (always cheaper than msrp anyway) and make them available to their customers.
Kearnstd
Elf Wizard
Premium
join:2002-01-22
Mullica Hill, NJ

Re: Why wait to rent?

That is my thought, if they have to pay retail they should just order a shitload from Amazon.com and start renting right away.

But odds are there is some bullshit licensing stuff where they cant do that. because you know HBO does not want that royalty money from renting unless they also sold the DVD itself to Netflix.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports

workablob

join:2004-06-09
Houston, TX

Re: Why wait to rent?

I've never been more proud to be a Pirate.

Damn it feels good to be a Pirate.
Dave

FifthE1ement
Tech Nut

join:2005-03-16
Fort Lauderdale, FL

Re: Why wait to rent?

Damn straight! I have Netflix and if I can't find something there I go through some other "channels" to find it online. I'm going to watch what I want to whether they get paid or not so they should just shut up and take my money rather than push me to do it illegally!
--
"The relationship between what we see and what we know is never settled..."

Camelot One
Premium,MVM
join:2001-11-21
Austin, TX
kudos:1
said by workablob:

I've never been more proud to be a Pirate.

Damn it feels good to be a Pirate.
Dave

+1
and crap like this just reenforces my feelings about it.
donthetech9

join:2010-09-07

Re: Why wait to rent?

...Until DRM like Cinavia comes along and puts the fear of God into piracy, it may be cracked at some point, but this the baddest DRM I've ever seen...It's adaptable, has many signals that can be applied, and people will spend lots of time and money with workarounds, etc, just to be able to watch a movie, TV show, etc.....

I do not condone piracy under any circumstances....If the studios make it harder to buy their content, then I say F*** them! I can spend my extra income on something else... I don't NEED HBO, I don't NEED Showtime, I don't NEED their movies......Piracy will only allow the content owners to get the gov't involved, when that happens, look out(I.E. SOPA/PIPA).....

Pirate515
Premium
join:2001-01-22
Brooklyn, NY

Re: Why wait to rent?

said by donthetech9:

...Until DRM like Cinavia comes along and puts the fear of God into piracy, it may be cracked at some point, but this the baddest DRM I've ever seen...It's adaptable, has many signals that can be applied, and people will spend lots of time and money with workarounds, etc., just to be able to watch a movie, TV show, etc...

I say it will be cracked just as everything else that Hollywood has thrown in so far. Macrovision on VHS tapes, CSS/"bad" sectors on DVD's, AACS/BD+ on Blu-ray were all miserably defeated. IMO, the same fate ultimately awaits Cinavia.

said by donthetech9:

I do not condone piracy under any circumstances...If the studios make it harder to buy their content, then I say F*** them! I can spend my extra income on something else... I don't NEED HBO, I don't NEED ShowTime, I don't NEED their movies...Piracy will only allow the content owners to get the gov't involved, when that happens, look out (i.e. SOPA/PIPA)...

What you should realize is that the reason why the content owners are getting government(s) involved is to protect their antiquated business models instead of getting off their lazy asses and getting with the times, especially when companies like Netflix are giving them technical means to do so. Bills like SOPA/PIPA create dangerous precedent under which any web site can be "blocked" at the request of anyone influential enough to catch AG's attention. Of course, this will be done under the guise of "piracy".

I applaud Netflix for putting some money, time and efforts into trying to create their own content. If they can come up with something worthwhile that can match or beat the stuff on HBO, SHO and other "premium" networks in terms of quality, they will be well on their way to attract even more talented actors, directors, screenwriters, etc. away from Hollywood. Moreover, they will set a precedent for others with enough cash to try to produce their own content and distribute it online as well, bypassing Hollywood and making those above-mentioned "premium" networks less and less relevant. Best of luck to Netflix with that!
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A MESSAGE to the RIAA and the MPAA: You shouldn't wound what you can't kill...
Automate

join:2001-06-26
Atlanta, GA
No, the license can't prevent them from renting the DVD. As I understand it TW will not sell to Netflix any more but others, (RedBox, Blockbuster, etc) they will sell to at wholesale prices after 60 days.
travelguy

join:1999-09-03
Santa Fe, NM
said by mogamer:

If Netflix has to purchase HBO series DVD's at retail prices, why would they have to wait 60 days to rent them out? Just buy them on the open market (always cheaper than msrp anyway) and make them available to their customers.

They don't. What HBO is saying is that if you want the DVDs at wholesale prices, you have to wait 56 days before we'll sell them to you. Otherwise you can pay retail for them (with no delay).
mogamer

join:2011-04-20
Royal Oak, MI

Re: Why wait to rent?

said by travelguy:

said by mogamer:

If Netflix has to purchase HBO series DVD's at retail prices, why would they have to wait 60 days to rent them out? Just buy them on the open market (always cheaper than msrp anyway) and make them available to their customers.

They don't. What HBO is saying is that if you want the DVDs at wholesale prices, you have to wait 56 days before we'll sell them to you. Otherwise you can pay retail for them (with no delay).

Exactly what I was getting at. Netflix should just buy on the open market and rent them out. The plus to this for Netflix would be that they wouldn't have to pay any royalities to TW/HBO because those movies weren't bought through them.
travelguy

join:1999-09-03
Santa Fe, NM

Re: Why wait to rent?

Netflix should just buy on the open market and rent them out. The plus to this for Netflix would be that they wouldn't have to pay any royalities to TW/HBO because those movies weren't bought through them.

True - But that's not necessarily a complete plus for Netflix. A lot of times the studios and distributors will cut deals where companies like Netflix get the DVDs for essentially manufacturing cost (pennies) in exchange for a share of the rental income. So, they might cut a deal where each time a disc was mailed out, Netflix would pay the studio a small amount.

The advantage for Netflix of this kind of deal is that they do not take on any inventory risk (over/under ordering), get to just trash the discs when demand drops and greatly minimize their up front expense. It also spreads the expense out over a long period of time as a disc will only be mailed a few times a month.
Kearnstd
Elf Wizard
Premium
join:2002-01-22
Mullica Hill, NJ
Cinavia might actually be easier to bust, for example if one where to do an image copy of a Blu-Ray how would it know the device playing the copy was not authorized? because if one does a copy bit for bit then the PS3 for example would just think its playing another Blu-Ray.

Also Pirates tend to consume their media using normal computers meaning one would have to get motherboard mfgs on board and GL doing that. And don't think getting MS on board will help because many P2P users are likely savvy enough to toss together a spare computer from parts laying around and just run Linux... Ubuntu might support DRM but the 10,000 other distros out there likely wont.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports

Jon
Premium
join:2001-01-20
Lisle, IL

Just wait.

Next will be netflix saying, "we have to raise prices because we have to pay more for content".
sandman_1

join:2011-04-23
11111

Join my pirate ship

HBO when it comes to movies is a fail. Now they do have a few TV shows that I like: Game of Thrones and Boardwalk Empire. But other than that, they really don't have much of anything else.

Until these idiots change their outmoded business models, I will keep doing what I am doing. Hardy har har maties!!!
Wilsdom

join:2009-08-06

Re: Join my pirate ship

The ocean can't be drained, but the internet can.

cruz1

@sbcglobal.net

HBO is garbage

Who needs that garbage! Not only is the content garbage, but because of their arrogance and attitude I would not ever pay them for anything even if I did enjoy it. The only reason they exist because of the morons who are in the habit of wanting "every channel". I know several of these morons and they pay cable packages that include HBO and Showtime but never even watch it. Once people smarten up a bit, HBO will disappear. It's like so 90's :P
ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL

I can wait

I don't know about other folks, but it isn't going to ruin my day to learn that a movie isn't available for rent right now. I've never thought to myself, "Oh man, I can't rent this movie right now, but I can buy it, so I guess I'll do that." Instead, I'll find something else to watch or something else to do.

And I don't pirate, either. It isn't out of some moral misgivings or the fear of getting caught; it's simply because I don't want to give these greedy bastards the satisfaction of me having watched their movie or listened to their music. I can find alternatives.

None of this is to say I don't go to the movies or buy the occasional music, but I do it on my terms, on my schedule. And seeking to tighten the screws on me as to what my options are isn't going to get one more dime from me.
cybercrime

join:2011-11-23
Honey Brook, PA

GREED will hurt

you will push more and more people to download the movies and u wonder why new movies are downloaded.i have not bought a dvd move because all the movie pre-views.and not able to make a backup copy of the movie if i wanted to take it to my second home or RV what about fare use.i havent bought a music cd for a verry long time cause the RIAA rips the artist off. i support the artist 100% and go to there site.

Corehhi

join:2002-01-28
Bluffton, SC
Reviews:
·Hargray Cable

Not a great move

I can't even tell you what's on HBO as far as shows. Putting HBO shows on Netflix is extra money for HBO since I would never see their shows or know about them. I don't see why these guys think that people who already watch HBO shows are going to some how pay more money to watch them again or I don't know what they are thinking??

mech1164
I'll Be Back

join:2001-11-19
Lodi, NJ
Reviews:
·Optimum Online

Just one more stupid move.

Years ago I had both HBO and Skinmax. As the cost of cable kept going up we realized we didn't need those channels (same old movies cycled again and again). Personally I haven't missed it in the least.

Yes I was curious about BWE but not enough to go reup with them and not enough to buy the DVD's. Now they are doing this BS move thinking yeah we will break them. All this does is make me more likely never to watch anything from them. Instead of the be in every venue you can model (and make a cr@p load of money to boot). They still think it's the US or the Highway model to dictate profits. We all know this isn't going to work. What we don't know is how long before there is sea change to make it happen? At this state, I'd say not until there is generational change in management. 2030 anyone.
axiomatic

join:2006-08-23
Tomball, TX

Dump HBO

Seriously Netflix.... just dump HBO and pass the savings on to your customers. I wont mind at all.

Snakeoil
Ignore Button. The coward's feature.
Premium
join:2000-08-05
Mentor, OH
kudos:1
Reviews:
·RoadRunner Cable
·magicjack.com

No problem

They are only hurting themselves. As fox learned when they made it harder to access their online content. All this will do is drive more people back to Newsgroups/torrents.
I have plenty to watch on Netflix, so increased release date isn't an issue for me. I don't watch any HBO shows that I am aware of. If I do, I'll just turn to the pirate sites and get what I wanna see, that also goes for showtime and starz.

The industry needs to learn that outlets like Netflix/huluplus are what the consumer wants. At least with those outlets you have fewer people torrenting programming. 3 years ago, I torrented a lot of TV shows/movies. Since netflix I don't torrent any show.

How come the article doesn't mention Redbox or "other DVD rental services"
»www.businessweek.com/ap/financia···4601.htm

As they aren't mentioned by name, is "other" referring to Itunes or Vuduu?

--
Is a person a failure for doing nothing? Or is he a failure for trying, and not succeeding at what he is attempting to do? What did you fail at today?.

Ytsejamer1

join:2008-01-18
Somersworth, NH

Shrugs...okay!

If the studios don't want people to see their product, so be it. I won't see it. If HBO wants to raise rates, that's up to them. At some point Netflix will say no thanks...everyone will vote one way or the other with their wallet.

I love the mentality of these companies... If we make it harder for people to get our products, we'll make MORE money!!! The logic astounds me.
decifal

join:2007-03-10
Bon Aqua, TN
kudos:1
Reviews:
·Verizon Broadban..

war

I love the world war 2 series they come up with ( was the pacific hbo too?) Either way, their pricing though keeps me from subscribing to the channels.. Instead I either buy the shows when they come out or rent them.. But if they keep making things unfun with all their price bullying and bs in general, i'll find something else to do till they do..

Teasip

join:2001-05-14
Plano, TX

AP VOD

This is why I like Amazon Prime. So I end up waiting a couple of years to watch something. It is still new to me and I am allowed the luxury of having others comment on good/bad status to save me the time of watching bad programming. Also, no commericials! Perfect example for me is SOA right now (early into season 3). Yes, I do pay for AP membership but I'd be buying stuff anyway (no sales tax) so why not let them tease me with the included Instant VOD for the same price ?
YukonHawk

join:2001-01-07
Patterson, NY

Re: AP VOD

Your state in next in line to start collecting tax from Amazon! I know it stinks!
gorehound

join:2009-06-19
Portland, ME

Buy Used and Physical

Be patient and buy your content used and physical.Boycott the MPAA & RIAA and do it because of SOPA/PIPA if you need a good enough reason to finally join a real Boycott.
GeoStar

join:2011-02-10
j2e6f5

DEC olde boy computin , HBO olde boy video watchin

maybe they should exclusivly only allow HBO on Digital computers ..... they locked out their clients too..

oh er.......... Digital who ?
old_wiz_60

join:2005-06-03
Bedford, MA

in other words....

they are trying to encourage people to pirate stuff instead of get it via legitimate means.

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