Studios Mulling Sales Window for New Releases

In an effort to foster movie sales, some major film studios are considering a new policy that would keep DVDs and Blu-ray Discs unavailable for rental until several weeks after going on sale. Netflix CEO Reed Hastings confirmed discussing this with several of his biggest suppliers, and stated that the company is open to that scheme, under reasonable terms. That plan could take effect next year.

Under the plan, new DVD and BD releases would be available on a purchase-only basis for a few weeks. Afterwards, rental companies such as Blockbuster and Netflix would be allowed to rent the discs to their customers.

"The studios are wrestling with declines in DVD sales while the DVD rental market has been modestly growing," Hastings said during Netflix's quarterly earnings call Thursday. "One of the mitigating steps some are considering is introducing a DVD retail sales-only window for a few weeks."

A sales-only window would significantly hurt revenue for disc rental companies. However, their bottom line could not be affected so much, provided the studios offered them lower wholesale prices in compensation. "If we can agree on low-enough pricing," observed Hastings, "delayed rental could potentially increase profits for everyone."

Hastings commented that Netflix may be able to move to this model earlier than other rental companies because "we are less dependent on new releases than our DVD-based competitors".