Studios could provide new movies later to Netflix and Redbox, earlier to "protected" digital cable
A new proposal from some major movie studios intended to increase sales of DVDs would push back the availability of new DVD releases for Netflix subscribers and Redbox customers.
As a story from the trade journal Video Business explains, the idea is to hold back new releases from these companies for a month -- a proposition Los Gatos, Calif.-based Netflix is prepared to accept in return for a drastic cut in the prices it pays studios for new movies. Adds writer Susanne Ault: "None of the studios has agreed to drop prices as much as Netflix wants."
(Traditional rental shops don't worry the studios that much, Ault writes: "Blockbuster has been left out of the window discussion because it orders more product from the studios than Netflix and Redbox and pays a relatively high price for titles.")
The DVD-kiosk operation Redbox is not so fond of the idea. The Oakbrook Terrace, Ill,, company has instead sued Warner Home Video, Universal Studios Home Entertainment and 20th Century Fox and launched a "Save Low Cost DVDs" Web site to argue for its position.
This isn't the only potential wrinkle to the home-movie market. Under a different proposal, some movies would be offered for rent through cable video-on-demand (VOD) services before their DVD release -- but only to subscribers with digital cable boxes connected via encrypted digital connections to HDTVs. This requirement would block access to viewers with older sets lacking these "protected" inputs.
Because the Federal Communications Commission prohibits "selectable output control," movie studios would have to get a waiver from the FCC first. This Ars Technica piece notes the Motion Picture Association of America's recent lobbying (PDF) for this waiver. The cable industry backs this idea, too; see this blog post by National Cable and Telecommunications Association President Kyle McSlarrow in favor it.
For a brief to the contrary, see Consumer Electronics Association President Gary Shapiro's Huffington Post piece this morning, which notes the history of earlier Hollywood attempts to close the "analog hole" by requiring locked digital connections.
Both the delayed-DVD-rental scheme and this SOC-for-VOD trade-off strike me as foolish ideas for the same reason. Adding yet another "release window" to Hollywood's miserably Balkanized, Byzantine and bureaucratic movie-distribution system can only serve to create more holes in the market for unauthorized downloading to fill. Movie studios won't make anything extra off those viewings, while home viewers will become accustomed to looking outside legitimate channels.
Netflix, Redbox viewers: What's your take on the possibility of a month's delay in the arrival of new releases? Cable subscribers: Would you pay to watch a new release ahead of time on VOD, even if you couldn't watch it on some TVs?
November 12, 2009; 1:28 PM ET
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