It appears that Netflix has struck yet another deal with a studio that will see DVDs from that company delayed for 28 days after the initial retail release in exchange for the rental-by-mail company getting better pricing on discs, and more titles for its growing Watch Instantly service. Unlike other deals, however, the rental company is not crowing about the latest agreement.
According to MediaMemo, Netflix has reached a deal with Sony that will see DVDs delayed by four weeks after they come out for retail sales. While Netflix has not released a press release this time around, Steve Swasey, a spokesman for the video rental company, has confirmed the deal exists, but would not confirm the details. This makes the fourth studio to strike such a deal, and they join with 20th Century Fox, Universal Studios and Warner Brothers.
While consumers have had mixed feelings about these deals, the studios appear to be happy with what the rental delay windows hat they have been striking with Netflix and DVD-kiosk company Redbox. According to Home Media Magazine, Warner Brothers is reporting that DVD sales have increased at the retail level by 15 percent since the delay window first went into effect, and video-on-demand revenues have increased between 20 to 30 percent. While there is no way to be certain that it is all definitely on account of the delay windows, but there is a pretty clear possibility.
While the studios think they are winning, and the consumers think they are getting the raw end of the deal at the moment, this is a marathon as opposed to a sprint. It is well-known that Netflix is more interested in its Watch Instantly service right now than in the physical media side of the equation. Everything about the streaming media side of the equation cuts expenses for the company, so the more titles it can add, the more customers it converts and the better the bottom line becomes. Netflix is happy, the consumers are (eventually) happy and the studios begin to wonder where all their rentals went.
This is a long term battle, and it certainly looks to me like Netflix is out ahead at the moment.
What say you? Do the 28-day windows really matter that much to you?