Netflix, which recently signed a much-discussed deal with Warner on a 28-day new release embargo, is expected to sign additional streaming deals with other studios this year. Michael Pachter, an analyst with Wedbush Morgan Securities, feels that such delayed release windows represent attempts by Netflix to “appease” studios with a larger share of its profit margins, and could come at the expense of market share. Said Pachter:
“The new release window may erode Netflix’s market share in favor of Redbox in the future, as the latter can secure new titles through retail workarounds,”
According to Home Media Magazine, Pachter projects “Netflix’s revenue growth to fall below 20% over the next several years, with downward pressure on average revenue per subscriber as increasing numbers of members join just for streaming and not DVD/Blu-ray Disc rentals”.
Another industry analyst, Ralph Schackart with William Blair & Co., feels that the Netflix/Warner embargo and similar deals may accelerate digital adoption through the creation of a new digital window. Schackart used the digital availability last week of The Invention of Lying and Whiteout, both embargoed titles, as examples of this nascent window. Both films were available through CinemaNow and Amazon VOD. Said Schackart:
“Some industry insiders have doubted digital sellthrough and rental’s ability to offer digital titles when a studio embargoes it in physical DVD. . . [We believe] a digital window is opening.”
Are these analysts right, Insiders? Will Redbox be able to pounce on lost Netflix market share due to the latter’s kowtowing to Hollywood? Is a new digital release window opening up, as Schackart says? Sharpen your commenting pencils and let us know what you think.
[via Home Media Magazine]