Why Warner Bros. Is Screwing Netflix by Giving DVDs to Blockbuster a Month Early

It's appropriate, almost, that Warner Bros. is giving Blockbuster—the chain that's closing 500 locations and bringing back late fees—a 28-day exclusive rental window over Netflix and Redbox. Two archaic institutions, sticking together.

Under the agreement, Blockbuster will get new Warner Bros. releases to rent out the same day they're released on DVD and Blu-ray. Netflix users won't get them until 28 days later, so when Sherlock Holmes, a Warner flick, comes out on March 30, Netflix subscribers won't get to watch a sweaty Robert Downey Jr. engaging in fisticuffs until it's almost time for Iron Man 2.

The whole situation is fitting though, in a way. The studios—clinging to the crumbling window release system, designed to extract the most possible profit from a film as it moves from theater to DVD to pay-per-view to HBO and then cable—are squeezing declining DVD sales for all they're worth, while they've still got 'em. This means protecting them from Netflix.

Netflix, on the other hand, is looking to the future, where we'll get our movies from pipes, not from stores or even postmen. It's why they agreed to Warner's insane demands to hose their customers for a month after a DVD comes out—to get better streaming privileges. On the flipside, the reason Warner agreed to give Blockbuster those release day rights is because they're afraid of Netflix (amassing too much power and siphoning revenue) and they're not afraid of Blockbuster. It's precisely because Blockbuster is totally screwed that Warner has no problem handing them new releases over Netflix and Redbox, the two services that are actually growing, not closing stores and considering bankruptcy.

Warner fear and tightassness essentially amounts to a temporary pain in the ass for Netflix subscribers, since this little blockade will break down eventually. In the meantime, I just won't watch any Warners Bros. movies. Except for Batman, they have the crappy superheros anyway. [paidcontent, PaidContent, Image CipherSwarm/Flickr]