Time Warner (TWX) Looks to Change Rules on DVD Rentals
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After seeing U.S. consumer spending on home-video entertainment decline 2.1 percent to $18 billion in 2011, Time Warner (NYSE: TWX) is now striving to prolong the availability date of DVD rentals.
While a few DVD rental companies have opposed the idea, Netflix (Nasdaq: NFLX) signed a contract with Warner Bros. on Tuesday to extend the delay period for new releases from 28 to 56 days. Analysts note new releases at Netflix do not account for similar rental volume as at other companies such as Blockbuster and Redbox.
Bloomberg reports Dish’s (Nasdaq: DISH) Blockbuster has been purchasing new releases from other venders and is then turning around and renting them to their subscribers and customers before the current 28-day grace period is up. Coinstars’s (Nasdaq: CSTR) Redbox also has a 28-day grace period, but Coinstar's agreement with Warner Bros. expires at the end of the month.
Time Warner’s push to extend the DVD rental delay period is an effort to increase DVD sales. Last year, the purchase of DVD’s fell by 20 percent, while rental revenue declined 28 percent. Some of the decline in DVD’s was offset by a 20 percent increase in money spent on renting or purchasing Blu-rays. Bloomberg reports Rebox’s largely accounted for the 31 percent increase in Kiosk rentals over 2011. These figures highlight the weakening market conditions the movie industry is currently facing.
Time Warner is also supporting and promoting the UltraViolet initiative which offers people the ability to purchase movies online from a number of sources and then watch them from either a computer, TV, smartphone, or tablet.
While a few DVD rental companies have opposed the idea, Netflix (Nasdaq: NFLX) signed a contract with Warner Bros. on Tuesday to extend the delay period for new releases from 28 to 56 days. Analysts note new releases at Netflix do not account for similar rental volume as at other companies such as Blockbuster and Redbox.
Bloomberg reports Dish’s (Nasdaq: DISH) Blockbuster has been purchasing new releases from other venders and is then turning around and renting them to their subscribers and customers before the current 28-day grace period is up. Coinstars’s (Nasdaq: CSTR) Redbox also has a 28-day grace period, but Coinstar's agreement with Warner Bros. expires at the end of the month.
Time Warner’s push to extend the DVD rental delay period is an effort to increase DVD sales. Last year, the purchase of DVD’s fell by 20 percent, while rental revenue declined 28 percent. Some of the decline in DVD’s was offset by a 20 percent increase in money spent on renting or purchasing Blu-rays. Bloomberg reports Rebox’s largely accounted for the 31 percent increase in Kiosk rentals over 2011. These figures highlight the weakening market conditions the movie industry is currently facing.
Time Warner is also supporting and promoting the UltraViolet initiative which offers people the ability to purchase movies online from a number of sources and then watch them from either a computer, TV, smartphone, or tablet.
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