Analyst: Consumers Willing to Wait 28 Days for New Rentals12 Apr, 2010 By: Erik Gruenwedel
Netflix’s revised distribution deals with 20th Century Fox and Universal Studios Home Entertainment will spur consumer interest in streaming as its subscribers wait 28 days for access to new release DVD/Blu-ray Disc rentals, an analyst said.
Eric Wold with Merriman Curhan Ford in New York said the fact that both studios retracted from previous mandates for 30-day and 45-day windows underscored flexibility by Hollywood regarding rental.
Wold reiterated his belief that Fox and Redbox will come to a distribution resolution prior to the April 22 packaged media release of box office behemoth Avatar.
The analyst downplayed the emerging 28-day window imposed by the studios (including Warner Home Video) as a plus for Blockbuster, which, through separate deals, does have access to the studios’ new releases on street date.
He said the perceived advantage for Blockbuster and its multichannel distribution channels (in-store, by-mail, kiosk and digital) is negated by price and convenience.
Wold said that should consumers covet a new release on street date, they would opt for lower priced video-on-demand (VOD) than DVD or Blu-ray.
“We continue to believe that most consumers will wait the 28 days (choosing a different movie for now) in order to obtain the much lower pricing of Redbox and/or Netflix after the window passes,” Wold said in an April 12 note.
However, with Blockbuster offering both options, it is not clear how the perceived consumer preference for digital distribution hurts the Dallas-based rental company.
Wold, who tracks Netflix and Redbox, said the influx in VOD activity bodes well for Sonic Solutions’ Roxio CinemaNow technology, which is projected to increase market penetration from 1.4 million CE devices in February, to 3 million units in June and 30 million in June 2010.