The Deal
Netflix has cut a deal with Warner Bros. that as both a customer of Netflix and as a businessperson, I’m conflicted over. The deal will limit when Netflix is allowed to release new Warner Bros. movies. They will now have to wait 28 days before they can release new Warner Bros. titles to their customers. On the other hand, this deal will open up more Warner Bros. title to Netflix’s instant download feature.
The Payoff
Warner Bros. is betting that by making Netflix users wait 28 days, they will go out and buy the DVD instead of waiting. I don’t see this happening. Using myself as an example, I currently have 142 DVDs in my queue. That means there are at least 142 movies that I already want to see. Those movies will conveniently fill the 28-day waiting period; therefore there is no need for me to go out and by a DVD. Will this deal end up hurting Warner Bros., probably not. But I don’t see it having the effect they think it will.
Netflix on the other hand gets two payoffs from this deal. They not only get more titles for their instant download feature they also get DVDs at a cheaper price. This is where the confliction comes in for me. As a Netflix customer, I’m upset that I will have to wait 28 days to get new releases. The sting of having to wait is lessened by an increased choice of instant downloadable movies, but it doesn’t totally make up for having to wait an extra month. On the other hand as a businessperson I can see that this is a great deal from Netflix’s perspective. It will be interesting to see how current Netflix users react.
What do you think about this move by Netflix and Warner Bros.? Will it pay off in the long run?
-Dennis
2 responses so far ↓
Justin // January 8, 2010 at 4:10 pm |
Netflix is an interesting company… they stormed onto the scene with big profits and revolutionary approach… then they started getting pushed aside by larger players… then they come back again!
I see this as a way for them to gain an edge in a market that is quite difficult to differentiate (other than price). Interested to see the results.
Justin
http://healthyexecutive.wordpress.com
dennisbernhard // January 8, 2010 at 4:40 pm |
Thanks for the comment Justin. I know more instant download titles are important for Netflix and it may end up being a good move for them. I just don’t see how this helps Warner Bros. at all. It will be interesting to see how it plays out.