Netflix’s DVD Agreement Sets Bad Precedent
Netflix has singlehandedly destroyed any hope that forward-thinking consumers had for bringing Hollywood to heel, as far as movie distribution is concerned, by agreeing to a delayed-DVD delivery scheme for new Warner Bros. movies in exchange for the ability to stream from that studio’s catalog. While Netflix is obviously attempting to parade this as a “win” for its customers, do they not see the cascade of effects they’re now responsible for?
For new WB releases, Netflix will now wait 28-days before allowing them to be sent to customers, but will instead be able to stream both new and old movies over their “Watch Instantly” feature. Previously, only select movies were available for streaming from any given studio, so a deal was cut with the television movie channel Starz in order to circumvent the stonewalling of studios – only serving to make the Hollywood executives more irate.
The problem, though, should be self-evident: a precedent now exists that allows movie studios to achieve the sort of control and more highly tiered delivery that they want at the expense of their own customers. The courts and the FCC have, thus far, refused to cooperate with Hollywood’s schemes to further divide their media properties’ display windows, and Netflix has provided an easy way out.
It logically follows that all movie studios will now wish to cut similar deals with the DVD-rental company, exchanging first-month DVD availability (which they believe, erroneously, will lead to higher DVD sales) for streaming, which will frustrate, annoy, and bewilder the majority of Netflix’s customers. Furthermore, other services will now be subject to similar demands: what if Blockbuster can’t carry DVDs until a month after their release? What if Redbox goes out of business because the noose is tightened even further?
This sort of concession to the greedy, maniacal corporations that willfully misunderstand new technology is worrisome, especially since it involves a company that has historically refused to cooperate with the outrageous demands and protests of Hollywood. Once the DVD-rental market is addressed, studios like WB will use this agreement as evidence in their demands for new cable television protocols, file formats, lawsuits, and who knows what else in order to further subjugate the media consumption masses.
Pandora’s Box has been opened, but what has appeared is an assault on digital rights and freedoms, the spread of media content, and media providers, instead of a plague. Unless the plague is a metaphor.
Kyle can be found on his blog, on Facebook, via email, or on Twitter.
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While a little confusing to me at first, I thought this was a great article. It really does set bad precedent, and I’m interested to see what this means for the future. Haven’t heard this anywhere else.
Thanks, ian!
–Kyle
In response to another comment. See in context »As someone who streams movies via Netflix at least as often as I watch the discs, this sounds like a great deal – for me, at least. Besides – more people will be streaming movies in the future. Rentals will slowly fade as movies migrate to online format, as TV’s go online, etc.
Besides, these sorts of deals happen all the time with television, etc. New models of distribution have to be tried in the age of the internet anyways. To call this a motive of greedy maniacal corporations seems a bit overwrought.
Hey E.D.,
I don’t disagree that this is a good idea, I just have a problem with its execution: movies may be moving towards streaming, but impeding the current delivery system for the benefit of movies with less immediate demand is a bad idea.
But, as I said, I’m more worried about what this will lead to. The fact that these deals happen all the time does not justify this agreement’s existence, especially since most people that are aware of such deals, outside of the corporate structure, do not like them. This is inserting another delivery level delay for the expressed purpose of making more money – it could very easily result in all the studios making such deals, and then using these agreements as evidence that their behavior is “just” and “proper” when making demands of the FCC, courts, and other distributors.
In the end, this has come about because of their unwillingness to accept the benefits of new technology, and they have treated the idea of online streaming much the same as they have the concept of piracy. Their behavior towards piracy has only garnered them significant ire, and I doubt that this will be any different.
–Kyle
In response to another comment. See in context »What is the effect of streaming distribution on the producer’s cut? In the past a producer would get a cut, like book publishing, of every video or DVD, sold. It was easy to count up the number of DVD’s sold. Now what?
libtree09,
I’m not entirely sure – that’s probably up to the “benevolence” of the studios, like usual.
–Kyle
In response to another comment. See in context »[...] market saturation – so long as its investors and parent companies don’t shut it down, or cripple it, long before the point of critical mass. But while 2010, and the foreseeable future, is [...]