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Warner Delaying New Releases to Blockbuster

26 Oct, 2011 By: Erik Gruenwedel

Harry Potter and the Deathly Hallows — Part 2

Warner Home Video reportedly will impose for the first time a 28-day embargo on new-release movies to Blockbuster and other video stores beginning Nov. 1.

The embargo, which was first reported by Home Media Magazine Sept. 23, would include new releases Crazy, Stupid, Love Nov. 1 and Harry Potter and the Deathly Hallows — Part 2 Nov. 11, among others.

An employee of a Blockbuster store in Laguna Niguel, Calif., confirmed that a distribution agreement with WHV granting the chain access to new releases 28-days before Redbox and other kiosks had expired. He said it was his understanding that Dish Network Corp., owner of Blockbuster LLC, was working on an interim solution and that new-release Warner titles would be available on street date.

Reports in the Los Angeles Times and Financial Times indicated the solution included buying new-release titles at retail and then renting them, which is allowed under the First Sale Doctrine.

Kevin Tsujihara, president of Warner Bros. Home Entertainment, told the FT that Blockbuster “rather than work with us … went around us.”

Warner, which has long advocated buttressing physical sellthrough and transactional video-on-demand, apparently changed its tune toward Blockbuster after the chain rolled out its Movie Pass platform, including a subscription VOD component.

Time Warner CEO Jeffrey Bewkes has been a long-time critic of SVOD — spearheaded by Netflix — characterizing the channel as a low-margin alternative best suited for catalog programming with limited retail or syndication value.

It still remains unclear whether Warner, beginning in January, would impose a planned 60-day embargo on new-release titles to all rental channels or just kiosks.

The studio’s deals with Redbox and Netflix expire at the end of the year.

A Dish/Blockbuster spokesperson declined comment; a WHV rep was not immediately available for comment.


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