Wednesday, January 06, 2010

Warner Brothers will make Netflix customers wait 4 weeks to rent newly released DVD: a business model experiment?

Netflix subscribers, who enjoy unlimited rental time and movies (although a maximum at one time) will have to wait an extra four weeks to rent Warner Brothers DVD’s after the DVD’s are released. This was part of a concession to allow Netflix to show more WB movies online (it’s not clear if the online availability waits four weeks). WB’s reasoning is that more people who are impatient to see hot movies will purchase DVD’s, at a much higher price than rental.

Blockbuster was not affected by the deal, since it has a more conventional rental model. Netflix has so many movies (including some indie films that it distributes to theaters as Red Envelope Entertainment) that it believes consumers won’t be inconvenienced.

Other studios may follow suit.

The AP story appeared Wednesday Jan. 6 on MSNBC, here.

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