Warner Bros. Joins the Attack on Netflix

The Atlantic
Warner Bros. Joins the Attack on Netflix
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Warner Bros. Joins the Attack on Netflix

In another assault on Netflix's library, Warner Bros. has announced that it will double the viewing window for new releases, meaning viewers will now have to wait 56 days for A Very Harold and Kumar Christmas and other Warner releases to show up at Netflix. When HBO, which like Warner Bros. is owned by Time Warner, decided it would stop offering Netflix its wholesale discount on DVDs, things didn't look too dire for the streaming focused company and its DVD customers. Netflix will still offer new seasons of favorites like True Blood and Game of Thrones, just at a higher cost to them. But, with Warner Brothers pulling this move, we see yet another content owner reconsidering its relationship with Netflix.

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As of now, the Netflix DVD collection won't look all that different. The remaining mail-order subscribers can still rent the last season of Bored to Death or Final Destination 5, eventually. The DVD biz hopes this viewing window increase will mean the difference between waiting to rent at Netflix and buying the movie at Walmart. Though, we predict more dorm room thieving -- unless SOPA has something to say about it. 

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Unlike the HBO deal, which had zero effect on Netflix's streaming offerings, the Warner Brothers negotiation demonstrates Netflix's waning streaming library, too, as AllThingsD's Peter Kafka points out. 

Two years ago, Netflix was able to argue that by delaying access to DVDs, it was able to get its hands on more streaming content, and lower prices for the discs it did buy. This time around, though, Warner won’t be granting any additional digital rights to the studios. It will simply be offering them the ability to buy discs in bulk, at a significant discount to retail pricing, like they already do.

Netflix no longer has the negotiating power it once had with Hollywood's content kings, which doesn't bode well or a company that sells and packagers others' content. Especially as these companies see they can sell their digital content without Netflix, making more money with online sales at iTunes or Amazon, as Sony did with Bad Teacher, retailing it there before offering it anywhere else. Or on their own sites. But Netflix saw this coming, which is why it worked so hard to score that new Arrested Development season and will debut its own show, Lillyhammer, next month -- it needs original stuff, in case its rental racket falls apart. 

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Though the DVD selection won't change too much, we see a shift in the way these companies understand Netflix's role. HBO seeing Netflix as a competitor, ditched DVD sales with the company. We wondered what Netflix's mail-order business, a relic still worth $1 billion, would look like if every competitor stopped offering Netflix sales? Just one day later and that scary prediction for Netflix and its loyal DVD base -- at this point they must be loyal, after price hikes and relegation to heinous name status -- is starting to come true. 

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