Possible New Warner Window Could Change the Sellthrough Game - High-Def Digest Forums
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Old 10-12-2011, 12:58 AM
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Arrow Possible New Warner Window Could Change the Sellthrough Game

Possible New Warner Window Could Change the Sellthrough Game

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11 Oct, 2011
By: Thomas K. Arnold

I ran across an interesting statistic the other day. Netflix accounts for about 25% of total consumer spending on home entertainment — figuring rental is half the market, and Netflix is half the rental business. And yet if you talk to any studio president, you’ll hear that Netflix, at best, accounts for only 5% of the average studio’s total home entertainment sales.

That’s clear evidence of just how much money the studios left on the proverbial table when all of Hollywood was touting the rapid rise of sellthrough in the late 1990s and early 2000s while completely ignoring the rental transactional end of the business. Left on the sidelines in our collective glee over escalating buy rates and what we mistook for a dramatic change in consumer behavior, the rental business mutated and evolved with nary a notice from Hollywood, which is why a smart guy like Reed Hastings was able to come in and in a few short years virtually “own” the business, hastening Blockbuster’s demise and, years later, putting a crimp in sellthrough now that the novelty of owning movies is over and consumers are a lot more selective in what they choose to buy.

The 28-day window three, and sometimes four, studios imposed on Netflix and its fellow rental renegade, Redbox, in an attempt to spur sales, hasn’t really been working all that well, my sources tell me. Back in the gaga days of DVD, when up to 60% of inventory sold through within a week and everyone rushed out to buy the week’s hottest new releases bright and early on Tuesday morning, 28 days was a lifetime. But as the business matured, that sense of urgency gradually went away, to the point where first-week sales are way down. People don’t mind waiting a few weeks to rent a movie from Netflix or Redbox, particularly at a time when the economy is still shaky and entertainment options are at an all-time high. There’s plenty to do in those weeks before a movie hits the Netflix queue, from updating Facebook to beating your kid at Angry Birds.

But after four weeks people are going to start getting a little antsy, which is why all eyes right now are on Warner Home Video and its still-unconfirmed intent to lengthen the window from 28 to 60 days — and perhaps include all classes of rental trade, including brick-and-mortar. If Warner’s new window is, indeed, the tipping point, the right amount of time for consumers to say something along the lines of, “Screw it, I’m tired of waiting, I’ll just buy the damn movie,” you can bet your state-of-the-art 3D Blu-ray player that other studios are going to follow suit.

And while the obvious goal is to boost sales, the other is to put the brakes on the Netflix phenomenon (although Reed Hastings has been doing a pretty good job of that himself). You can’t blame the studios for that: when 25% of consumer dollars flow into a business that only gives you 5% back, you’ve got to do something, anything, to at least even the score.
http://www.homemediamagazine.com/tks...llthrough-game
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Old 10-12-2011, 01:01 AM
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IMO, changing the rental wait time period from 28 days to 60 days will prove to be a disaster to any studio that implements it.
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Old 10-12-2011, 01:25 AM
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They can change their rental business wait time period to whatever they want - it will NOT change my purchasing criteria. Blu-ray titles get purchased by me when and if:
1. it is a quality title that I actually want to own
2. it is a quality blu-ray release (pq, aq, packaging)
3. it is NOT an obvious staged release with a later double dip release that we should wait for
4. it is priced reasonably
Kindly note, oh silly greedy studios, the absence of any mention of when it is available for rent.
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Old 10-12-2011, 01:50 AM
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The 28-day window three, and sometimes four, studios imposed on Netflix and its fellow rental renegade, Redbox, in an attempt to spur sales, hasn’t really been working all that well, my sources tell me
I told you guys that long ago about the rental window not working. Looks like I was right once again.

I am glad consumers stuck through it. It is anti consumer in every way to strong arm the rental companies and it hurts the consumer. Can't wait to see them try even more.
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Old 10-12-2011, 02:25 AM
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The 28 day window may not be helping sell through that much but it ain't hurting Redbox or other rental outlets from the usage of consumers either. Consumers seem to have just time shifted for the 28 days as long as their is new stuff in the Redbox kiosk each Tuesday according to the Rental sales charts.

But i'm not sure if more that 28 days may hurt rental activity more and it might be more of an issue for Netflix and Redbox to accept but at this stage I am not sure what they could do about it except accept it.
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Old 10-12-2011, 02:27 AM
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Originally Posted by chipvideo View Post
I told you guys that long ago about the rental window not working. Looks like I was right once again.
Except it doesnt say that at all.
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Old 10-12-2011, 03:06 AM
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Originally Posted by Elee s View Post
Except it doesnt say that at all.
So how would you interpret this statement?

Quote:
The 28-day window three, and sometimes four, studios imposed on Netflix and its fellow rental renegade, Redbox, in an attempt to spur sales, hasn’t really been working all that well, my sources tell me.
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Old 10-12-2011, 01:15 PM
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I think the 30 day window is helping, but a 60 day window would be much better. People have to realize that $1 optical rentals are not very profitable for the studios anyway and will eventually be almost entirely replaced by streaming anyway. Adding a longer window adds time-based value to the purchase. Face it, sell through needs to have another niche to be able to compete more with cheap rentals and giving them a worthwhile window is the way to go.

Optical is going to be almost all sell through anyway sooner or later so screw Redbox, BB and Netflix. The clock is ticking against them anyway.
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Old 10-12-2011, 01:45 PM
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Quote:
Originally Posted by bruceames View Post
I think the 30 day window is helping, but a 60 day window would be much better. People have to realize that $1 optical rentals are not very profitable for the studios anyway and will eventually be almost entirely replaced by streaming anyway. Adding a longer window adds time-based value to the purchase. Face it, sell through needs to have another niche to be able to compete more with cheap rentals and giving them a worthwhile window is the way to go.

Optical is going to be almost all sell through anyway sooner or later so screw Redbox, BB and Netflix. The clock is ticking against them anyway.
Based on TK Arnold's observations I think its fairly likely that 60 days will become the rental delay norm sooner or later. At least 42 days or 6 weeks up from 28 days.
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Old 10-12-2011, 02:19 PM
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Quote:
Originally Posted by bruceames View Post
I think the 30 day window is helping, but a 60 day window would be much better. People have to realize that $1 optical rentals are not very profitable for the studios anyway and will eventually be almost entirely replaced by streaming anyway. Adding a longer window adds time-based value to the purchase. Face it, sell through needs to have another niche to be able to compete more with cheap rentals and giving them a worthwhile window is the way to go.

Optical is going to be almost all sell through anyway sooner or later so screw Redbox, BB and Netflix. The clock is ticking against them anyway.
I think your wrong Bruce. I think the studios only chance is to have a player connected to the net for activation. So in other words a stream or dl. OD will always be a rental market.

Its a win win for the studios to have streaming or dl where the studios can spy on you. Basically the same thing that happens on the xbox when you move stuff from console to console that you purchased digitally. If I dont have a net connection I cant activate it when I move from my console up north to back home. DRM as in net connection is what the studios would truly want. Not gonna happen with OD. Its too easy to strip off. With a download or stream I am sure the DRM in place is gonnna be much harder if not practically impossible for the average person.

It truly scares me to death thinking about VOD and dl in the future. I dont want the studios to go that route. I want my BD and whatever comes after it in PHYSICAL form only.
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