As if Netflix hasn’t had enough bad news recently, they’re now telling us Warner Bros. has extended the rental window from 28-days to 56-days. This means, instead of waiting a month to rent a new DVD or Blu-ray Disc, you now have to wait almost two months.

Warner Bros., along with many other Hollywood studios, had instituted a 28-day sales-only window for newly released DVDs and Blu-ray Discs in order to encourage disc-sales. Clearly the 28-day window was an homage to Danny Boyle, because sales of movies have not been bolstered by such a stupid plan.

It’s not clear why Netflix is entitled to such a long window as brick-and-mortar renters like Blockbuster (if they’re still into that sort of thing), and Redbox now get the titles a month earlier. Not that this was any different than before, because Netflix usually had long-waiting times for newly released movies anyway due to their demand. From reading the press release, it seems like they might be doing this to give UltraViolet and the Warner-owned Flixster an advantage over Netflix.

Read the press release after the break.

Warner Bros. Home Entertainment to Make New Release DVD and Blu-ray Titles Available for Rental Only After 56-Day Sales-Only Window

LAS VEGAS, Jan. 10, 2012 /PRNewswire/ — Warner Bros. Home Entertainment Group and Netflix, Inc. (Nasdaq: NFLX) today announced a new agreement that will extend the current 28-day sales-only window to 56 days for Theatrical New Release and made-for-video titles on DVD and Blu-ray Disc.

“Since we implemented a 28-day window for subscription and kiosk, we have seen very positive results with regard to our sell-through business,” said Mark Horak, president, Warner Home Video North America. “One of the key initiatives for Warner Bros. is to improve the value of ownership for the consumer and the extension of the rental window – along with our support of UltraViolet – is an important piece of that strategy.”

Warner Bros. is balancing its home entertainment revenue streams by creating different times at which a product is available at different prices. A staggered schedule allows the Studio to maximize the sales potential of its theatrical new release titles and VOD offerings.

“Netflix wants to ensure members have continued secure access to Warner Bros. DVDs and Blu-ray discs and, as such, is accepting the 56 day holdback,” said Netflix Vice President of Content Anna Lee.

The new agreement was announced at the annual Consumer Electronics Show in Las Vegas, Nev. in conjunction with an annual event held by the Digital Entertainment Group.

About Warner Bros. Home Entertainment Group

Warner Bros. Home Entertainment Group (WBHEG) brings together Warner Bros. Entertainment’s home video, digital distribution, interactive entertainment/videogames, direct-to-DVD production, technical operations and anti-piracy businesses in order to maximize current and next-generation distribution scenarios. WBHEG is responsible for the global distribution of content through DVD, electronic sell-through and transactional VOD, and delivery of theatrical content to wireless and online channels, and is also a significant worldwide publisher for both internal and third party videogame titles.

About Netflix

With more than 20 million streaming members in the Americas, the United Kingdom and Ireland, Netflix, Inc. [Nasdaq: NFLX] is the world’s leading internet subscription service for enjoying films and TV programmes. For about US$7.99 a month, Netflix members can instantly watch unlimited films and TV episodes streamed over the internet to PCs, Macs and TVs. Among the large and expanding base of devices streaming from Netflix are the Microsoft Xbox 360, Nintendo Wii and Sony PS3 consoles; an array of Blu-ray disc players, internet-connected TVs, home theatre systems, digital video recorders and internet video players; Apple iPhone, iPad and iPod touch, as well as Apple TV and Google TV. In all, more than 700 devices that stream from Netflix are available. For additional information, visit www.netflix.com. Follow Netflix on Facebook and Twitter.

SOURCE Warner Bros. Home Entertainment Group; Netflix, Inc.

Earlier this month, Dish Network and Blockbuster released Blockbuster Movie Pass. This service allows for streaming movies and TV shows directly through the DishOnline.com. Additionally, DVDs and games will be delivered through the mail.

If you have Dish Network, Blockbuster Movie Pass will cost an additional $10 per month. This includes unlimited streaming, and one-disc-at-a-time delivery. The comparable Netflix service will cost $15.98. Upgrades with two and three discs at a time will be $15 and $20 respectively.

Blockbuster claims the available movies and TV shows are over 130,000, with 34,000 available for streaming. This is compared to Netflix with 31,700 streaming titles, and over 100,000 DVDs.

One advantage Blockbuster always had over Netflix was the ability to return movies to a Blockbuster store, where you pick up a new rental while your next by-mail delivery immediately ships. Blockbuster also rents games, which Netflix hasn’t gotten into yet.

Dish Network purchased Blockbuster out of bankruptcy earlier this year for $320 million.

Netflix has a case of Dr. Jekyll and Mr. Hyde. Less than a month after Netflix CEO Reed Hastings announced DVD-by-mail would be spun off to form Qwikster, another email is sent out saying Qwikster will not happen after all.

It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.

This means no change: one website, one account, one password … in other words, no Qwikster.

What a horrible year for Netflix PR. They’re flailing to find footing with their established, loyal customer base.

With my account in an on hold status, I won’t receive any Netflix service, but more importantly, they won’t receive any of my money, as all billing is halted.

So why did I do it and why am I writing about it? This move is just my little way of protesting their price increases, their poor “justifications” and their anti-customer behaviors. After all, the strongest consumer voice is the wallet.

Interestingly enough, the same day that I put my account on hold, Netflix announced that they were spinning off their DVD & Blu-ray Disc rentals into an entirely separate service dubbed Qwikster.

When I heard that Qwikster would require completely separate billing and queue management, I actually wasn’t that shocked. Netflix has been making dumb decisions and pissing off customers for quite some time now. By now I just expect them to do things that aren’t customer friendly.

I haven’t yet decided on whether I will be fully cancelling my Netflix account or removing the hold to reactivate service. At this point I’m still thinking about it and waiting to see what else the company will (or won’t) do.

In related news, I didn’t receive an email from Netflix regarding the Qwikster spin-off and I didn’t receive the “apology” email from CEO Reed Hastings, maybe because my account is on hold? If so, WTF?

According to rumors online, Netflix could lose up to 1/3 of their subscribers due to the recent fiascos. Is your service with Netflix or Qwikster still active or are you cutting them off?

The CEO of Netflix, Reed Hastings, send out an email to all Netflix subscribers apologizing for how he handled the recent pricing adjustments. That’s right, they’re not sorry they raised prices, they’re sorry about how they handled the announcement. The apology begins,

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology.

I’m not sure people responded the way they did because the announcement was worded poorly. I’m pretty sure it was because the price increase, and the justification for it, were out of line with consumer expectations.

The explanation remains,

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.

That’s right, the price increase is necessary because Netflix wants to market the services we’re already paying for to us differently.

Of course I might just be treading old ground here and burying the lead: Netflix will no longer deliver DVDs by mail. That sounds worse than it is. Netflix is rolling out Qwikster (which sounds like a convenience store) for the DVD service, and the Netflix brand will stick with streaming. There will be two different websites, and two different queues (another WTF? for Netflix, though Hastings is aware this is a “negative”).

On the plus side, Qwikster will be adding upgrade options for video game rentals. We’ll discuss the costs when they are announced.

Clearly the handling of the price change was poorly executed. They announced the plans a couple months before the changes happened, and then about a month after that they’re splitting the business in two. In the meantime, they lost millions of subscribers.

But even this apology was handled poorly, because it’s really an announcement for Qwikster, which should have had its own announcement.

How should it have been done? Netflix should have held off any plans for the future until they announced Qwikster, at which point they could have told their Netflix subscribers that Netflix was out of the DVD-by-mail business, and all accounts would become $7.99 per month streaming accounts. Then point their subscribers to the new Qwikster service for those who want to sign up, and even offer coupons for loyal subscribers for free upgrades or a month free at their current DVD limit level.

Hey Reed, I’m available any time you want advice. Hit me up.

Several months ago, I sat through several meetings with a particular movie server company who had felt the effects of the economy decline just like everyone else. Instead of shrinking back in the face of the new economic reality, they refocused their brand through the use of market research in order to actually increase business even in these times. Their results were surprising.

This company surveyed their clients to see what movies are actually being watched the most. It wasn’t Gladiator, The Matrix or Iron Man. In fact, of the top 5, 4 of them were Pixar, and one was Dreamworks Animation. And this was by a lot. As it turns out, children love watching the same content over and over again. And often.

Considering the market I’m in tends to target the techie guy, this was like a splash of cold water.

What this company did was create a new menu for children, and even a new child-friendly remote control. This way a child only has access to kid-friendly content, and they have it quickly and easily without having to learn how to read.

This is the general concept behind the new feature Netflix is testing. Called “Just for Kids,” the new Netflix menu only shows children’s content, and in an easy-to-use interface.

Scrolling across the top of the page horizontally is a small icon of dozens of famous children’s characters, like Sesame Street’s Big Bird, Hello Kitty, etc.



Once selected, a new menu appears with only episodes from this series.



There is no indication if this will roll out to everyone, or if they’re just testing it out. There is also no news on if the kid’s menu will lock out access to adult content so parents can let their kids have full reign without worry.

UPDATE: August 16, 2011

Netflix has rolled this out today. movies.netflix.com/Kids

Netflix announced today a new pricing structure for plans to separate disc delivery and instant streaming. In essence, the price has doubled for their most basic subscription service as a result.

Netflix is presenting the change as offering their customers choices, but in reality it is just raising prices on an already profitable business plan. They write, “we have realized that there is still a very large continuing demand for DVDs both from our existing members as well as non-members. Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs.”

What’s wrong with making streaming a $2 add on to a DVD subscription? Why not a bundle price like every other subscription provider offers?

While I admit I don’t watch the disc movies as often as I had in the past, that’s mainly because the only optical disc player I have at the moment is in my computer. But most of Netflix’s catalog is still on disc, including everything from HBO. Doubling the price of the basic 1-disc subscription to add streaming just doesn’t make sense.

How does it satisfy customers who only wants discs to gouge their existing customers who want both?

Judging by the response to the announcement, nobody is happy with this. It seems like a $0.99 rental per movie from another service added on to the Netflix streaming will be the way a lot of people go … if only Redbox had a better selection.

I just don’t see how they will increase their business by alienating loyal customers. They even seem to realize this fact by ending the announcement by reminding everyone how to cancel their account.

Complete Netflix statement after the jump.


Netflix Introduces New Plans and Announces Price Changes

Jessie Becker, here to share two significant changes at Netflix with you.

First, we are launching new DVD only plans. These plans offer our lowest prices ever for unlimited DVDs – only $7.99 a month for our 1 DVD out at-a-time plan and $11.99 a month for our 2 DVDs out at-a-time plan. By offering our lowest prices ever, we hope to provide great value to our current and future DVDs by mail members. New members can sign up for these plans by going to DVD.netflix.com.

Second, we are separating unlimited DVDs by mail and unlimited streaming into separate plans to better reflect the costs of each and to give our members a choice: a streaming only plan, a DVD only plan or the option to subscribe to both. With this change, we will no longer offer a plan that includes both unlimited streaming and DVDs by mail.

So for instance, our current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming), for $7.99 a month.

The price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). For new members, these changes are effective immediately; for existing members, the new pricing will start for charges on or after September 1, 2011.

Why the changes?

Last November when we launched our $7.99 unlimited streaming plan, DVDs by mail was treated as a $2 add on to our unlimited streaming plan. At the time, we didn’t anticipate offering DVD only plans. Since then we have realized that there is still a very large continuing demand for DVDs both from our existing members as well as non-members. Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs. Creating an unlimited DVDs by mail plan (no streaming) at our lowest price ever, $7.99, does make sense and will ensure a long life for our DVDs by mail offering. Reflecting our confidence that DVDs by mail is a long-term business for us, we are also establishing a separate and distinct management team solely focused on DVDs by mail, led by Andy Rendich, our Chief Service and Operations Officer and an 11 year veteran of Netflix.

Now we offer a choice: Unlimited Streaming for $7.99 a month, Unlimited DVDs for $7.99 a month, or both for $15.98 a month ($7.99 + $7.99). We think $7.99 is a terrific value for our unlimited streaming plan and $7.99 a terrific value for our unlimited DVD plan. We hope one, or both, of these plans makes sense for our members and their entertainment needs.

As always, our members can easily choose to change or cancel their unlimited streaming plan, unlimited DVD plan, or both by visiting Your Account.

Warner Bros. is testing video-on-demand through their Facebook movie page. Currently the only movie being tried is The Dark Knight. Simply “Like” the movie’s page and it offers to use credits to watch the movie.

The credit system is a little confusing. A lot of companies have used a credit system to mask the actual cost of the sales, most notably is the PlayStation Store on the PS3 where you purchase credits ahead of time and redeem them for purchases.

The Dark Knight uses 30 credits, which amounts to $3.00 USD. Access to the rental will be available for a 48 hour window after the movie is activated.

Warner Bros. CFO John Martin said social media is an opportunity to not only add revenue, but to mine their customer’s behavior and trends, which could affect how movies are made in the future. Think of Facebook as a giant test market.

This isn’t a special deal made with Facebook, simply an application utilizing Facebook’s API, just like thousands of other Facebook applications.

Warner may not be the only studio to be looking towards Facebook for distribution. Sony Pictures has also hinted at the possibility.