Netflix announced new deals today with Twentieth Century Fox and Universal that would entail a 28 day delay window for new DVD and Blu-ray titles, in exchange for greater access to films and television for Netflix’s streaming video service. Netflix signed a similar deal with Warner Brothers in January (which didn’t explicitly include more streaming titles).
One of the first titles affected by these new deals is Avatar, which will be released on DVD and Blu-ray April 22 and won’t be available for rent on Netflix until late May. Given how difficult it is to receive new titles on Netflix soon after their release — due to a combination of high demand and subscribers keeping the discs for as long as they like — I don’t suspect this will cause much uproar among Netflix users. I’ve personally given up on trying to rent new releases from Netflix because of the delays.
While the new release delay is unfortunate, the addition of more titles from Universal and Fox to Netflix’s streaming video service more than makes up for that. Over the past few weeks, Fox has made available some of its most popular series for streaming, including Buffy the Vampire Slayer, The X-Files, and 24 — all in their entirety. The deal stipulates that Fox has full control over how the television content is rolled out for streaming.
In addition to more streaming titles, Netflix will also have access to more physical copies of new releases, since it will be able to purchase them at cheaper prices. Speaking about the Warner Brothers deal in January, Netflix Chief Content Officer Ted Sarandos explained how the delay helps increase disc availability:
The most practical reason is that the savings derived from this deal enable us to be in stock completely on day 29. Remember that we’re a subscription service and the way that you manage the economics of a subscription service is to manage the demand of any disc, depending on the economics of the disc. In the case of the most expensive disc, which in this case is a Warner Bros. disc, purchased through a 3rd party, those discs were out of stock for far longer than 29 days for most Netflix subscribers.
While far from ideal for consumers, the deals demonstrate Netflix’s ability to work with movie studios by giving them something they want — a month in which consumers can only purchase new releases. Many studios were angered by Netflix’s deal with Starz — which allowed Netflix to gain access to films by licensing them as part of the StarzPlay package — because it meant they couldn’t get a cut from Netflix.
By working with more studios directly, Netflix may be seen as less of a threat to the studio hegemony, which may lead to a more enlightened approach to digital distribution down the line as well.