As some of you are aware, Netflix has signed a deal with Warner Studios. The gist of it is that Netflix will not send out new movies for 28 days after their initial release. In return, Warner will take a more liberal position on allowing Netflix to stream movies. Reactions seem mixed. Newsome does not like it at all. I think that this is a fantastic deal for Netflix and not a bad deal for Warner, though not in the way that Warner thinks.

The ability to get new releases on Netflix was always spotty for the first few weeks. For those that absolutely, positively must see the movie the day it comes out on DVD, they can still go to Hollywood Video and see it. Otherwise, a month isn’t going to kill anybody. Opening up Warner’s vault for online viewing, though, is a great get for Netflix. I truly believe that streaming movies is going to be the future of Netflix’s operations once they get the distribution mechanisms better placed. They can work out distribution easily enough – indeed, they’ve already started with the XBox360 – so the sticking point is the backwards-looking studios. The more they get the studios to go along, the more I believe that it will be to everyone’s – including the studios – benefit. If having more tiers in the release (four months to DVD sale, five months to DVD rental, eight months or a year to streaming) gets the studios on board, that’s certainly a price worth paying.

Category: Theater

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