Tuesday, January 17, 2012

Warner Bros. exerts its Leverage over Rental Companies

It's no surprise that film rental companies have evolved rapidly in recent years.   It's been a necessary change with the increase use of digital technology and the vast availability of films and other media.  As a result, film rental companies, like Netflix, Redbox, and Blockbuster, began sourcing copies of films directly from the studios.

These studios then had some leverage over film rental companies.  Two years ago, Warner Bros. required that these companies wait four weeks between the release of the movies and their rentals.  Soon after, other studios followed suit.  Now, Warner Bros. has increased that requirement to eight weeks.  Similar to two years ago, other studios are expected to do the same.

Netflix, Redbox, and Blockbuster are responding in a variety of ways.  Netflix is vastly abiding by the new guidelines.  They will not be affected as much by this change, since their focus is on streaming video as opposed to DVD rentals nor is it centered upon new releases.  Contradictory to this, Redbox's business hinges greatly on its ability to deliver new releases.  No new agreement has been reached between Redbox and Warner Bros.  According to a representative, they are sticking to their current 28-day agreement, for now.  Blockbuster, however, does not seem to be interested at all in playing ball with Warner Bros.  The company currently utilizes alternate avenues for obtaining DVDs from Warner Bros, and that does not seem likely to change.  It will continue to release its rental on the day that the DVD is released from the studio.


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