Bewkes: Expanding 28-Day Window a ‘Good Idea’

3 Nov, 2010 By: Erik Gruenwedel

---

Time Warner Inc. CEO Jeff Bewkes said extending the current 28-day delay of new-release titles is a scenario that could gain momentum as early as next year, despite the fact agreements between Warner Home Video, Netflix and Redbox don’t expire until 2012.

During a Nov. 3 third-quarter conference call with analysts, Bewkes elaborated further on the topic first broached Nov. 2 by WHV president Ron Sanders during a panel discussion at Blu-Con 2.0 in Los Angeles.

“The question of whether we ought to go longer is very much under scrutiny,” Bewkes said. “It may well be a good idea, [but] we haven’t reached that yet.”

Bewkes is no stranger to shaking up home entertainment distribution. The executive was instrumental in forwarding transactional video-on-demand (VOD) access with same-day packaged media — steadfastly denying doing so would cannibalize physical sellthrough.

The CEO pushed the studio to enact a 28-day embargo on new releases to kiosks and Netflix — a strategy quickly adopted by 20th Century Fox Home Entertainment and Universal Studios Home Entertainment.

Bewkes said the embargo has been a success with the objective to buttress disc sales and generate higher-margin digital rentals.

“We’re always going to focus on our long-term profits and sustainability over short-term ones,” he said. “We’re just trying to maximize the value of our content as we see these alternatives develop. We’re not religious about any of this.”

Indeed, Warner Home Video revenue in the third quarter was up slightly, and up 8% year-to-date, which the studio attributed to ongoing growth of Blu-ray Disc.

Eric Wold, analyst with Meriiman Curhan Ford in New York, said he doubts possible long-term changes to the release windows would negatively impact Redbox, parent Coinstar or Netflix.

A summary of Redbox’s studio deals finds Warner’s 28-day delay agreement expiring Jan. 1, 2012, with no early opt-out clause. Universal’s similar deal expires April 21, 2012, and 20th Century Fox’s 28-day agreement expires April 21, 2015, with an opt-out clause April 21, 2013.

Lionsgate’s agreement for street date availability expires Aug. 31, 2014, with an opt-out next August. Sony Pictures Home Entertainment’s deal expires Sept. 30, 2014, with an opt-out next September. Paramount Home Entertainment’s expires Dec. 31, 2014, with an opt-out next December.

“Should there be any one-off changes to studio agreements starting in late-2011 (at the earliest), we believe [Redbox] will be well-prepared at that time,” Wold wrote in a note.

Bookmark it: