« TNR: Was Wrong, Is Wrong. | Main | Bad Start »

November 16, 2006

Starring David Brooks, Maureen Dowd, and Paul Krugman

In what seems like a truly stupid idea, the Weinstein's have inked a deal to give Blockbuster exclusive rights to their future DVDs. So Bobby, The Nanny Diaries, The Protector, and many others will be kept out of Netflix, Hollywood Video, and local stores. Blockbuster will be your only option. Which is bad for consumers, who'll see their choices restricted, and bad for those involved with the movies, who'll see their efforts constrained to a limited audience. It's the TimesSelect of film distribution: bad for everything but the bottom line.

November 16, 2006 | Permalink

Comments

wow, that's dumb.

aimai

Posted by: aimai | Nov 16, 2006 1:42:31 PM

How does this deal have any enforcement power? What stops Netflix from buying these DVDs wholesale through the same channels a retail store would get them from, and then renting those out? They aren't a party to the contract, and renting out movies that have been legitimately purchased is not prohibited by normal copyright law.

Posted by: Firebug | Nov 16, 2006 1:43:21 PM

I guess I won't be seeing any Miramax movies then. Too bad.

Posted by: ellenbrenna | Nov 16, 2006 1:56:47 PM

Boy the commenters here like Aimai, are truly stupid.

Posted by: AJ Lynch | Nov 16, 2006 1:57:33 PM

It's the magic invisible hand of the almighty, all-seeing, all-powerful wizard of the free market, bringing you restriction of access just about everywhere.

Posted by: shrimplate | Nov 16, 2006 1:59:42 PM

Don't feed the trolls.

That sign should posted at every video/dvd retailer.

Posted by: FullRaidersAlchemist | Nov 16, 2006 2:01:42 PM

Reading the story carefully, this looks like a Blockbuster vs. Netflix thing, only. Specifically it notes that retail sales aren't included. That means indie video stores will be able to get videos through distributors.

The big video places (Blockbuster, Netflix, Movie Gallery) have special deals that get them large numbers of movies at major discount. I guess Netflix and Movie Gallery will be no better off than anyone else when this happens. I wonder how the planned-for entry of Walmart into video rentals fits into this picture.

Posted by: TomF | Nov 16, 2006 2:02:21 PM

well they cant stop pirating on the internet "tubes"

Posted by: noop | Nov 16, 2006 2:03:41 PM

Reading the story carefully, this looks like a Blockbuster vs. Netflix thing, only. Specifically it notes that retail sales aren't included. That means indie video stores will be able to get videos through distributors.

The big video places (Blockbuster, Netflix, Movie Gallery) have special deals that get them large numbers of movies at major discount. I guess Netflix and Movie Gallery will be no better off than anyone else when this happens. I wonder how the planned-for entry of Walmart into video rentals fits into this picture.

Posted by: TomF | Nov 16, 2006 2:03:56 PM

Well Weinsteins, I guess you are going to make me illegally download your films now, huh? Because I swore off Blockbuster about 5 years ago, and vowed to never go back.

Posted by: jambro | Nov 16, 2006 2:04:59 PM

"How does this deal have any enforcement power? What stops Netflix from buying these DVDs wholesale through the same channels a retail store would get them from, and then renting those out? They aren't a party to the contract, and renting out movies that have been legitimately purchased is not prohibited by normal copyright law"

I don't think the rental business works the way you think it works.

Posted by: Bob Loblaw | Nov 16, 2006 2:05:08 PM

What I've never understood about these strategies is the underlying assumption that they are producing a necessary good, when, in fact, many people would just their money on something else, with fewer barriers to use.

Posted by: Mike the Mad Biologist | Nov 16, 2006 2:05:18 PM

Having worked in the film distribution business this doesn't surprise me. My onetime employer had exclusive non-theatrical rights for Paramount TriStar, Fox, Orion (boy does that age me) and seevral other companies.

To answer Firebug's question: if they want to buy them wholesale, they have to buy them from the Weinstein Company or a licensed distributor, who I'm sure will not be authorized by Weinstein to sell to anyone but Blockbuster, but I would imagine their arrangement includes direct sales to Blockbuster.

It's probably a smart move for Wienstein. they will be guaranteed a certain amount of income from this. The gamble being made is probably by Blockbuster. Time will tell.

Posted by: Randy Paul | Nov 16, 2006 2:09:57 PM

Doesn't Blockbuster have a Netflix-like offering?

In general the movie industry is hurtling towards a total realignment of who pays whom and how much.

Posted by: Nicholas Beaudrot | Nov 16, 2006 2:12:20 PM

This is an anti-trust action waiting to happen. Treble damages rock...

Posted by: Pooh | Nov 16, 2006 2:41:10 PM

Blockbuster does have a Netflix-like option. That said, I signed up with Blockbuster (they were cheaper, and as a bonus gave away a couple of free in-store rentals a month, and occasionally free or deeply discounted used DVDs the stores wanted to get rid of), and I wound up switching to Netflix when Blockbuster's software crippled my subscription for over a month and I couldn't get them to fix it (they did give me an extra in-store rental. Yay). After switching, I found Netflix to have much better software for browsing and searching, and to have a better collection, especially in terms of delay before a popular (or cult) movie becomes available.

Posted by: Warren Terra | Nov 16, 2006 2:44:43 PM

One can't legally buy a retail version of a video and start renting it out... read the fine print, you're buying it for private home use. If you want to rent videos, you buy a license to do it (I think it's around 100 bucks a video).

There was a video store in my neighborhood that used to rent the retail versions of videos. The cops showed up one day and cleaned out all their videos. d'oh!

Posted by: twhid | Nov 16, 2006 2:51:47 PM

It's a loser idea. An ass-backwards HBO business plan to restrict DVD rentals, a latter point in the movie lifecycle where exposure matters the most.

Rottentomatoes tracks how much revenue these restricted movies generate in the DVD rental market. We'll see.

The exclusive deal is limited to rental only because blockbuster doesn't have a significant part of the retail market - seems silly to openly conceed that point.

If blockbuster has enough marketpower to pull this off then it should trigger an anti-trust inquiry.

Posted by: joe | Nov 16, 2006 2:57:14 PM

I don't get it. Every Blockbuster retail store I've seen in the last year has either flat out gone out of business and shut their doors or has simply stopped maintaining the store -- hiring clearly inferior staff or even letting the headcount drop go via attrition, no more regular cleaning of the facility, rarely putting the DVDs in alphabetical order on the shelves, letting returned disks pile up for days in the little carts before being re-shelved. Blockbuster shows every sign of being a business actively dismantling itself, recognizing that they are a doomed brand. Why Miramax would sign a deal with a loser like BB is amazing. Maybe they're simply hoping that by the time these new films come out on DVD, Blockbuster will be completely kaput.

Posted by: Christopher Fahey | Nov 16, 2006 2:58:07 PM

Pooh,

No antitrust issues here. This is one company choosing to make an exclusive deal with another one. If several or all of the studios/distributors were banding together to do this, you might have a case. This certainly doesn't.

Posted by: Randy Paul | Nov 16, 2006 3:16:23 PM

I'm a public librarian. The Weinsteins have just ensured we'll get more people coming through our doors for their movies. Thanks, guys!

Posted by: False Prophet | Nov 16, 2006 3:17:06 PM

I think that, as much as I hate it, this is a smart business move on the part of Blockbuster, as it has been rolling out its own Netflixesque program. I was just saying the other day that I didn't know how they were going to compete in a Netflix/VOD world. Now I see how they'll do it...

Posted by: nitpicker | Nov 16, 2006 3:21:04 PM

One can't legally buy a retail version of a video and start renting it out

first sale doctrine doesn't apply? why not?

Posted by: hi | Nov 16, 2006 3:25:05 PM

One can't legally buy a retail version of a video and start renting it out

first sale doctrine doesn't apply? why not?

I'm not a lawyer, but every DVD has a copyright notice on it. In addition to copying, it forbids any commercial use of it. Whatever we might think of intellectual property law, I think this part pretty well-established.

Posted by: Cyrus | Nov 16, 2006 3:39:31 PM

FWIW, I swore off Blockbuster several years ago when I got tired of my local places going under. They did despite my valiant efforts, but I was happy to have Netflix as a preferable alternative. Let me say that even though there are months when I certainly don't get my money's worth because I'm too busy to watch enough movies, I'm sticking with Netflix for the long haul. The reason: Katrina.

When we evacuated and realized it'd be a while, we called all our utilities, subscriptions, etc to put them on hold. When we called Netflix, they said they'd already stopped billing us, they'd refunded our prior month's bill, and marked the DVDs we had as lost. They even expressed sympathy for our struggles. I told my brother about the experience, and he wrote them to praise their business pracetices. He received a personal response saying that they hoped his brother was recovering as well as could be expected.

That, folks, is how you do business. I'm sure they have their share of corporate BS, but they've made me a loyal customer, and I love knowing that on some small level I'm sticking it to BlockBuster. A positive image beats the hell out of creating an image of a greedy, anti-small-business bully like BB and the Weinsteins.

Posted by: hammhawk | Nov 16, 2006 3:58:30 PM

The comments to this entry are closed.