At the beginning of the year
, Netflix began signing deals with the movie studios that would give them broader access to licenses for broadband streaming, in exchange for delaying the rental of new films for 28 days. After signing such deals with Warner Brothers, Universal, and Twentieth Century Fox, they've now struck a similar deal with Sony
. As with previous such deals, users who enjoy new releases lose out:
Swasey wouldn’t release other details, but we can guess that the deal follows the pattern established with the precedent Netflix set in its January deal with Warner: Netflix agrees not to rent Sony’s (SNE) movies for the first 28 days after they go on sale. In return, it will pay the studio a reduced fee when it does rent the discs, and will get more movies to offer via its growing Web streaming service.
In the head of the protectionist studio executive, this delay allows them to sell more physical DVDs, and gives them the ability to offer Netflix competitors like Blockbuster a tactical advantage through paying to get new releases immediately (not that this helped Blockbuster
). Execs tend to ignore that by making it harder for customers to rent content (either via broadband or mail), they may be more inclined to simply pirate these titles -- not buy them.
Meanwhile Warner Brothers, one of the first companies to strike such a delayed release deal with Netflix, this week proclaimed that DVD sales shot up 15% as a result of these deals. However as Mike Masnick at Techdirt notes
, correlation does not imply causation, and that surge could have come from anywhere -- like the release of a string of more popular films. One exec has this to say about the deals:
"You make money in the film business by putting your content in appropriate windows that matches up with the way consumers like to use it."
In reality, the film industry's always done the exact opposite. While these deals do get more streaming titles to users, these new release delay efforts simply add another layer of annoyance and confusion. Generally, studios continue to annoy customers by constricting broadband streaming licensing in the first place, and creating additional delays in consumers obtaining the content, -- all to temporarily prop up the physical media market in the face of broadband delivery.