Andre Yoskowitz
8 Nov 2009 23:56
According to sources speaking to VideoBusiness, Netflix has been discussing the possibility of accepting a one-month delay on new releases as long as the studios who want the delay will cut inventory costs by 50 percent.
The rental giant has been in quiet talks with Warner, Universal and Fox so far, and possibly other studios as well. Not one of the studios has accepted the price drop that Netflix needs to take the delays.
The studios have already imposed the delay on kiosk giant Redbox, which has led to lawsuits from both sides.
Netflix is more gung-ho about the idea as it will reduce costs for the company and consumers and Netflix COO Ted Sarandos even said they pitched the idea to the studios in 2007.
“Creating a rental window is not a punitive action,” says Sarandos. “It’s a decision that the retailers and studios can make together. If the studios can entice a rentailer to create a rental window, I believe that rentailers, studios and consumers can all benefit from it.”
Netflix makes about 70 percent of its revenue on catalog titles so the new release delay should not hit the bottom line significantly, especially if they are saving inventory costs on their main breadwinner.