Reid Hastings Netflix Sell Out

Isn’t it a coincidence that on the day that Yahoo! had a screaming news story declaring that Sandra Bullock’s enormous smash “The Blind Side” just passed the $200 million domestic gross mark –an impressive feat never before done by any other major actress—we have a magical piece of news from two corporations that don’t normally like each other: Warner Brothers and Netflix.

28 Days Later

In a press release today, both companies agreed to essentially force Netflix and its customers to wait out a 28-day period before Warner Bros. distributes its new releases to them.

Netflix Wait Time 28 Days

That’s a whole month before movies like “The Blind Side”, which has been raking in tons of money since its November release with its plucky performance by Bullock and its do-gooder, racism is bad, Republicans-are-good-values, can ever be accessed by Netflix’s millions of members as a “New Release”. According to the agreement –monetary figures not released, of course—Warner has also agreed to renew and expand the library of their movies they will allow to be streamed to Netflix. For Netflix’s part, they are content to have a strong distributor and possibly reduce product costs. According to Ted Sarandos, chief hack for Netflix:

We’ve been discussing new approaches with Warner Bros. for some time now and believe that we’ve come up with a creative solution that is a ‘win-win’ all-around. We’re able to help an important business partner meet its objectives while improving service levels for our members by acquiring substantially more units than in the past after a relatively short sell-through window.  At the same time, we’re able to extend the range of choices available to be streamed to our members. Link HERE

Netflix OrigamiThanks a lot, Ted. Now, let’s get back to “The Blind Side”, a Warner Bros film, and potentially one of the largest moneymakers it has ever seen. When this movie releases on DVD/Blu Ray, Warner Bros. effectively wants to make as much “sell-through” (studios make as much as 75% of their revenue from direct sales in the first four weeks –uh, 28 days –and hey, bonus: that’s also the name of another mediocre Sandra Bullock flick, natch!) as it can, from all the consumers who will see it propped up on Target shelves or Safeway check-out stands probably later this spring. (We smell a convenient Mother’s Day tie-in, with little red balloons and mini-footballs!)

Why Warner Bros., Why?

Warner Bros. clearly smells the potential Brinks-truck-type cash that this one movie will bring in and, while we’re at it, why not screw the Netflix customers and ask them to wait out this release and other upcoming releases like “Where the Wild Things Are”, “Invictus”, “Sherlock Holmes” and “The Informant!”?

And what wonderful extra Warner Bros. fare could be added to the array of semi-interesting films that are instantly streamed on Netflix? Since it doesn’t make sense to put out anything that’s going to be profitable and make Warner Bros. lose money, I would guess that it would be any of these Warner Bros. films —some that are either hyper-exposed enough on pay cable already or those that no one cares about anymore: we put “Sex and the City”, “Four Christmases”, “17 Again” and “Slumdog Millionaire” in the former category, “He’s Just Not That Into You”, “Yes Man” and “The Sisterhood of the Travelling Pants 2” in the latter. In short, whatever the details of this lame, emasculated, sell-out agreement, Warner is
going to
shoot its wad,
so to speak
Warner is not going to shoot its wad, so to speak, and Netflix, for its part really doesn’t have much leverage to force its hand. All it can do is continually screw its customers by effectively outlawing the term “New Releases” from its line-up of categories to its fee-paying customers. Why doesn’t Netflix amend its agreements with all of us, or at the very least say the following:

Dear Netflix Subscribers: We’re sorry, dudes. That “Long Wait” you guys see in your queues for the New Releases you want? It’s now gonna say ‘Pending Cash Deal from Movie Studio.’  Sucks for you. Thanks for your support, Netflix.”

Netflix Wait Time

Corporate greed strikes again, and you best believe that other money-grubbing studios are quick on Warner’s tail, eager to make their own questionable distribution deals with Netflix. In the face of a record-breaking, multi-billion-dollar gross revenue year in Hollywood, let alone the numbers overseas –$10.6 billion here and $26.3 billion worldwide —you’d think that movie studios would have milked enough cash out of consumers. But apparently not, and Netflix, after having demolished other on-line movie rental companies like Blockbuster and Walmart, is only too eager to bend over.

All of which makes me think: the only reason I had Netflix before and the only reason I just rejoined it, after an eight-month suspension, was entirely because of “New Releases”. As we posted last year, I left Netflix because I would have to wait weeks to finally get a “New Release” mailed to me.

Either Netflix didn’t keep enough copies in stock, or they were assuming I’d just rather watch “Ratatouille” for the 10th time. Over the holiday break, I re-joined Netflix only because I thought I could get “New Releases” streamed from my queue to my brand new TiVo HD XL (140 hours of HD wonder!) unit and my new Sony Blu Ray disc player.  Boy, was I wrong.

Netflix Streams Low-Budget Films

Netflix Streaming

In my current Netflix queue, I have “The Hurt Locker”, a film that comes out next Tuesday. Highly acclaimed film that no one watched but is expected to nab some Golden Globes and Oscars later on.

I also have “Taken”, another relatively new film. Also: “(500) Days of Summer” and “Funny People”, again both new-ish and potential crowd pleasers. Are any of them streamable? Do any of them have an extra “Play” button to the left of the titles in my queue, which means they would download on to my TiVo in a few minutes and I could play them? No. Not a one.

In fact of the ridiculously large number of films in my queue (213), only 40 of them can be streamed. And these aren’t big blockbusters necessarily. We’re talking “Food, Inc”, a low-budget doc, “Born into Brothels”, a foreign film, and even “The Princess Bride”, a film I have never (really) ever seen but then again who hasn’t?! Have a hankering for “Cloudy with a Chance of Meatballs”, the big new DVD release yesterday, via the instant stream? Forget it. What about “Harry Potter and the Half-Blood Prince”, the #2 highest grossing film last year or “The Hangover”, in at #9?

Boring MoviesHell to no: these are Warner Bros. films, and you won’t probably see them streamed until Daniel Radcliffe gets gray hair or until Bradley Cooper makes another decent movie.

All of this sounds so depressingly familiar. In our last post about Netflix, I also mentioned that I had gone over to Redbox, the now-recognizable red DVD distribution box you find at your local grocery store —all for $1 a day. As we mentioned before, other movie studios, such as Universal and the Weinstein Company, are locked into anti-trust lawsuits because the studios do not want Redbox to have their newest flicks available to the grocery-store-going masses, or at least not for—yeah—28 days.

Back to Redbox?

All Redbox wants to do is provide the most competitive and varied selection of films; all the studios want is more money, or at least something to alleviate the relative “pain” at knowing that “Cloudy” (Sony) is only bringing in $1.09 per day to Redbox, maybe a small piece of that to the studio. Amid all this fuss, Redbox continues to look like the rebel –and an increasingly profitable one.

To be quite honest, I haven’t “left” Redbox. I still pass by the boxes everywhere and if I remember to do so, I can request something on-line and then pick it up. (On occasion I do have to stand behind toddlers who are simply flicking through the screens.) But I admit that maybe the studios like Universal have really stuck it to Redbox in one sense: their selection of films leans towards the second-rate, even straight-to-video, and certainly not all of the new releases for that particular week.

So Netflix, we say “Thanks”. At a moment when we’re all trying to watch how we spend our own dollars and at a time when the technology for receiving movies is better than ever, you have still decided to reduce our overall experience by deciding what’s best for us. And as you increase our fees sometime this year or next, we will all remember all the windfalls you have received from this Warner Bros. deal and the others that are waiting just around the corner.

We think we hear some studio heads calling you now, eager to talk money.

Netflix Workers

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Comment by Gary
2010-01-07 08:47:55

Why don’t you watch a few of those other 200+ discs in your queue while you wait the extra 28 days? How often does the latest release automatically become a higher priority than the many other titles in your queue? Never does for me and I suspect most Netflix subscribers feel the same. If this happens often for you, then I think you have a rare temperament that may not be right for Netflix.

Comment by smash
2010-01-07 11:43:12

The point of the piece was to highlight Netflix thinking of its own self-interest and its business interests with Warner Brothers instead of providing a more improved movie experience for its own customers. That’s the layman’s definition for selling out. Making the customers wait 28 days before they can see a New Release completely goes against the promise Netflix made to its subscribers who count on having access to a new DVD or Blu Ray every Tuesday. In fact, one of these days we may see the category “New Releases” removed from Netflix altogether. Watch the rest of the movies in our queue in order to calm ourselves down? Wait those extra days and just put up with it? We think not, and we don’t think ours is a “rare” temperament. Check out the many negative responses to this contract deal on the Internet.

Comment by Lil Tim
2010-01-07 22:26:23

I wonder what implications this move has for the future of media. For me, and I imagine for numerous others, Netflix still holds an unbeatable selection of movies, INCLUDING things like documentaries and independent films (Food, Inc. being an example), and I’m not sure their selection is ever going to run out of value for me. I have about 400 movies in my queue, plus many instant streaming titles. I stream all the time. So, it will take much larger change to Netflix’s model for me to stop using their service.

The question this raises is whether or not changes to Netflix, or to any other distribution model for media for that matter, will begin to influence the consumption decisions of its customers. For example, I like to get a new release every now and again, like District 9, which I got the day it came out to Netflix. But if movies don’t come to Netflix for a month? Well, for me, I’ll just wait for another month, assuming I can’t get it at Redbox. And, as Gary said, I’ll continue to go through my really long queue of movies and I’ll watch more content from my DVR and from my collection of vodcasts. I’m not going to kowtow to Warner just because they want to increase their sales and will slap around Netflix and its end customers to do so.

I don’t think the “temperament” in this article is at all an exception, and I’d be willing to bet that mine is more of an exception than the one portrayed above. But, will we see a shift? Unless Netflix gets some serious competition, which I just can’t see happening right now, will there be a subset of customers like me who stick with it and mold our consumption of media based on the collective availability of content through Netflix, Hulu, internet TV, and cable? And choose to be less interested in media that is made harder and more expensive to access? Especially when networks and movie studios are putting the screws on distributors, might it not be better for us as consumers to “vote with our dollars,” and start to choose different forms of media rather than eat it from Fox and Warner and other heavy-handed corporations? I guess time will tell.

Comment by smash
2010-01-08 09:34:10

Thanks for the thoughtful response, Lil’ Tim. We predict that other studios will be doing the very same thing to us Netflix customers that Warner Bros. is doing –namely, set up their own agreements based on their mutual self-interest. That, we argue, erodes the very basis for being able to get a New Release like “District 9”, as you mentioned, any time in the future. Never has technology been so advanced in our ability to access movies. But don’t tell that to the studios because they’d still prefer to squeeze us and force us to buy their movies and deprive Netflix, and us, from fulfilling one of the singular reasons why we are even members in the first place. We want those new films when they’re out. But Netflix isn’t going to bat for us. Yes, Netflix has an impressive array of films and documentaries. But it isn’t the only thing out there. Ever tried Green Cine, for example?

Comment by Glenn
2010-02-10 16:53:39

Smash, you are so right. I want new releases, not another 80’s flick I can watch for free on cable anyway. The studios are bullying and doing nothing but turning off this potential viewer. I guarantee I won’t buy a movie just because they delay the rental availability. Nonsense! And what about Blockbuster? I can walk in there and get a new release from day one. What is the difference, from the studios perspective?
Anyway, keep up the fight. Netflix needs to stand up for their customers before we all jump ship.

Comment by Robert Landry
2010-07-13 15:12:06

Netflix is definitely worth the price that you pay for it. I have averaged around a two to three day turn around which, is an average of 10 to 12 movies a month, not including instant movies, for 9 buck plus tax. So, yeah it sucks that we don’t get new releases right away but for that go to redbox, but that is just as hit or miss. I hate going to Redbox expecting a movie, only to have it already rented out or not even carried to begin with. You could always look at going to the video store, but then you end up paying $5.00, for a movie. So, is Netflix, selling out, I don’t think so.

One question though, do all new movies not allow you to skip previews, or is that just netflix and red box.

Comment by Matt Acres
2010-08-28 00:01:30

@Robert Landry

“I hate going to Redbox expecting a movie, only to have it already rented out or not even carried to begin with.”

You can watch movies online with netflix, but you don”t no how to go online and reserve a local redbox movie?

LMFAO. The redbox website shows you what movies are still in stock at your local redbox dispensary. And if you reserve the movie of your choice it will be there.

LOL I bet you never even used redbox. you are probably a shill for netflix.

I definitely aint trying to root for redbox, I know I am die-hard netflix user and only used redbox once. Hands down netflix wins! I’ll stick with my ps3 and stay up watching netflix all night every night.

It just kills me when I read someone downing a company when that person has never used the services or is just not smart enough to employ all of the features of the service and then cries inadequacy!

Robert please just be yourself and don”t add crap to your comment just cause your trying to create false empathy with people to fit in.

If most everything I stated is wrong, there is at-least 1 part that is not wrong. regardless of the fact if a movie is carried or rented out, You can check online to see what movies are at your local redbox and in stock. It is literally ten times faster to reserve online. the person at redbox in line behind you loves the kind of person who did everything at home. reserving online will make your time at the redbox machine seem almost to fast to have actually done anything

Comment by Anthony Williams
2010-08-28 01:59:52

I reserve all the time for redbox. Its faster then a ATM transaction when u reserve. All i do is swipe the same credit/debit/gift/visa card in the redbox machine then my movies pop-out and I’m on my way.

the nearest redbox is 1 mile away from me. my girlfriend timed me 1 time. from the time I walked out the door, jumped in my car, jumped out my car, used the redbox, jumped back in my car, parked, jumped out the car, walked in the house, handed my girlfriend three new redbox movies, she clocked me at 5m:57s

that’s like 2 mins per movie.

I was lucky no one was in line. one time I had to wait 35-40mins while this fat lady picked out 3 movies. trust me leaving was not an option. YOU HAVE NEVER HEARD MY GIRLFRIEND WINE & COMPLAIN!!!

when I walked up I was the only person behind her. by the time the lady left the machine there was a line of 25 people. so not every redbox rental is a pleasant experience.

I love netflix 2. but I can’t seem to get my girlfriend interested in it. even though I let her use my online disc for her ps3. she only streamed one moive then gave up on it. she swears by redbox. netflix has alot of weird and stupid/subtitled foreign/Homosexual/low-budget/useless/thoughless/brainless/without humor/without worth even exsisting/ bullshSS movies.

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