This week’s big news, the Warner/Netflix deal, was the result of major compromises by both sides, and may or may not be a positive development for Netflix customers. So says the New York Times, which recently interviewed Kevin Tsujihara, president of the Warner Bros. Home Entertainment Group and Netflix CEO Reed Hastings.
When asked about Warner’s side of the deal, Tsujihara was quite forthcoming about his company’s margin-based motives, saying that “[Warner] didn’t want the availability of its films on Netflix to prevent people from paying full price to buy DVDs at retail.”
Warner was willing to seduce Netflix into the deal by compromising on per-unit prices of its titles after the 28-day delay, as well as opening more of its catalog for Netflix to stream.
Hastings referred to the situation in Europe, which has no First-Sale Doctrine and allows studios to have iron-fisted control over DVD rental windows, as something Hollywood lusts after for the domestic market. He went on to say that his company was willing to compromise because “our number one objective now is expanding the digital catalog.” Hastings reiterated that Netflix’s streaming service won’t be obtaining new releases from Warner, but rather more of its back catalog. “It’s not that much of a breakthrough,” Hastings concluded, referring to the lack of new release streaming titles.
The deal should, however, have a positive benefit for Netflix subscribers when it comes to the much-maligned “throttling” more frequent renters have to deal with on popular titles. Once the waiting period is over, Netflix will be getting a better price on DVD and BD discs and will theoretically be able to have more copies of the most desirable Warner titles in stock.
Insiders, we know many of you are Netflix subscribers in addition to being Redbox fans. Is this deal in the best interest of Netflix’s customers? Did the company compromise too much in its pact with one of the Hollywood Three?
[via The New York Times]