Warner to Raise Content License Fees for Netflix, Redbox2 Feb, 2011 By: Erik Gruenwedel
Describing the digital transition of filmed entertainment as Time Warner Inc.’s most dynamic business unit, CEO Jeff Bewkes Feb. 2 said Warner Bros. would aggressively pursue increasing content license fees charged to Netflix, Redbox and other related distribution services.
In an analyst call discussing fourth-quarter fiscal results, Bewkes said Warner Home Video’s 28-day delay for new releases to Netflix and Redbox has been successful, but is not enough, considering Netflix’s burgeoning growth and changing consumer behavior toward home entertainment.
“The current pricing and window are not really commensurate with the value that those kinds of availability are extracting,” Bewkes said. “We think that the value our [studios] should get for that period of exhibition is considerably higher than what's there now.”
The CEO said the studio would look at the economics of the entire home video category, including introducing premium VOD in the second quarter. He didn't indentify the select new release movies Warner plans on releasing 60 days after their theatrical bow through all major channels, including cable and satellite TV.
Premium VOD is Hollywood’s newest marketing effort aimed at generating higher margins from consumers willing to pay extra to watch select theatrical releases in the home weeks before the disc release.
Theatrical movies typically enter the home entertainment window up to 120 days after release.
Bewkes said all Warner theatrical releases in 2011 would be compatible to digital locker Ultraviolet, which allows consumers to virtually store digital and physical media acquisitions playable on myriad devices.
“Ultraviolet should dramatically boost the appeal of owning movies,” Bewkes said.