Netflix's Deal With Warner Brothers Is Not A Good Deal For Consumers

I'm really surprised that many people in the industry think that yesterday's announcement by Warner Bros. which limits Netflix's access to new release DVD and Blu-ray titles after a 28-day window is such a good thing. While the argument is that Netflix now gets access to more digital content, Warner Brothers is not willing to say just how much content Netflix will get or how new any of that content will be. If this deal is so good for everyone involved, why won't anyone give out specifics? Why won't they tell us how many new hours worth of digital content this gives Netflix? Why should we believe that the consumer is the one that is really going to benefit from this?

In my mind, all this does is allow Warner Bros. to further control how and when consumers watch content. It removes choice from the market and simply allows the studios to continue to have way too much control over the consumer. I know the argument by some will be that Netflix is betting big on streaming and that this is about the future, but streaming movies are not going to replace DVD or VOD rentals in the next five years. Even Netflix says they expect to still be renting DVDs in 2020. While everyone wants to rally behind the fact this deal pertains to digital content, it makes no real impact on the market other than reducing Netflix's costs, which is good for the company, but bad for giving consumers more control in the market.

Comments

[Mike Berkley]

Dan,

Seems like suddenly the industry woke up and realized that consumers like instant gratification. Uh... no duh! In some ways, the transition from the Blockbuster walk-in-retail model to the Netflix receive-by-mail model was a step BACKWARDS in the instant gratification category. At least with Blockbuster, you could watch your movie the same day. Not so with Netflix's DVD rentals.

That is the big problem that streaming solves for consumers, and I think it is a HUGE one. Instant gratification. Getting instant gratification on an ever-increasing percentage of the video library is probably worth more, to more consumers, than getting access to new releases ASAP. No one really knows of course, so it is a gamble that Neflix is making. See http://tvnewsstream.com/netflix-gambles-big-on-streaming-risking-core

As you know, streaming isn't just the future, it is the here-and-now, for more and more consumers. I don't think it's smart to assume it's 5 years out (and certainly not 10 years); it's already started and could eclipse Netflix's DVD rentals in as soon as 3 years, I bet. This TV-Web convergence is suddenly happening fast now.

Lastly, Netflix has great leadership and understands their customers very well. I've learned to give them the benefit of the doubt.

Keep up the great work!

Cheers,
Mike Berkley
http://TVNewsStream.com

[Stsusan]

I just received my Roku, and I love using it! But, for now, there's still a place in my world for DVDs -- I love the extras & watching/listening to the director's commentaries.

BUT, I'm so interested in new releases(immediate gratification)that I wouldn't care if there were ads on the Netflix site. I wouldn't care if there were 2-3 ads at the beginning of the movie. (I would care if it was interspersed with ads, tho.)

2 questions:
1) wouldn't it be beneficial for them to go to this ad model now?
2) When will they start making DVD extras available and what are the odds? (probably after the ads start rolling?)