Movie studios eyeing new-release rental delays for Netflix, too

The latest Hollywood studio to consider delaying sales of its latest DVDs to buck-a-night kiosk company Redbox dropped an even bigger bombshell Thursday—namely, that it might impose the same policy on Netflix, as well.

The Los Angeles Times reports that Warner Brothers is not only poised to fall in line with Universal and Fox in keeping its new-release DVDs and Blu-rays from Redbox and other movie kiosk services (Warners is proposing a 28-day window, versus 30 days for 20th Century Fox and 45 days for Universal), but it might also hold out on Netflix—unless the DVD-by-mail giant agrees to a "day-and-date revenue-sharing option."

What's a "day-and-day revenue-sharing option," you ask? Well, as the L.A. Times puts it, Warners basically wants a "more lucrative deal"—or in other words, more money.

So presumably, unless Warners gets better terms in its rental contract with Netflix, we might have to wait nearly a month before the studio's latest DVD and Blu-ray titles become available for rent on Netflix.

Redbox, the company behind the wildly popular $1-a-night DVD rental kiosks, just filed a lawsuit against Fox for trying to keep its distributors from selling new Fox titles to Redbox until after a 30-day window has passed.

Meanwhile, another Redbox lawsuit against Universal, which wants a 45-day window before its latest titles appear in Redbox kiosks, is still pending in the courts.

Redbox has pledged that it'll keep renting new titles from all studios on the same day that they're released in stores—although unless the company can get distribution agreements with the studios in question, it'll have to go through standard retail channels, which means paying heavily marked-up retail prices.

For now, Netflix is taking a wait-and-see attitude, with one exec telling the L.A. Times that the company will "evaluate the current proposal."

Why is this all happening? Because Hollywood—under pressure from slumping DVD retail sales—doesn't like the idea that its latest, greatest DVD and Blu-ray releases are being rented for a buck a night, a price that is "grossly undervaluing" their latest DVDs (as quoted in the Washington Post), in the words of a News Corp. exec, while Time Warner's CEO likened it to second-run "$1 movie theaters" (as quoted in the L.A. Times piece).

That said, two movies studios—Sony and Lionsgate—just cut deals with Redbox that include first-day new DVD releases, in exchange for Redbox agreeing not to sell their used DVDs on the cheap. Meanwhile, Paramount and Disney have yet to tip their hands.

Related:
Warner Bros. takes aim at Netflix along with Redbox [Los Angeles Times]