a precedent other major movie studios are likely to follow, Warner Bros. is poised to announce that its latest DVD releases won't be made available to rental outlets until nearly two months after the discs can be bought in stores and websites.A person familiar with the matter explained the new rules to The Associated Press on Friday. The person spoke on condition of anonymity because the changes won't be announced until Jan. 10 during a major electronics show in Las Vegas.
The expanded delay was first reported by the All Things D website.
Time Warner Inc.'s Warner Bros. declined to comment Friday.
The new restriction will double a 28-day delay on DVD rentals that Warner Bros. reached with Netflix's video subscription service two years ago. After that breakthrough, several other movie studios adopted similar moratoriums, although many DVD releases still remain available to rent on the same day they go on sale in stores.
The increased wait for DVD rentals exposes the competitive tensions that are shaking up home entertainment. In the past seven years, movie studios have seen U.S. sales of DVDs and Blu-ray discs fall by a third
-- from $10.3 billion to roughly $7 billion. Netflix's growing popularity during the past decade helped put a major dent in one of the movie studios' biggest moneymakers
-- because its service enables people to watch as many mail-delivered discs as they want for a flat monthly fee.
DVD rentals didn't hurt studios much before Netflix existed because the market was dominated by Blockbuster. That chain charged consumers for every title taken off their shelves and shared revenue with the studios.
To make matters worse for studios, Redbox's concept of renting DVDs -from kiosks set up in thousands of stores- gave movie lovers another cheap and convenient way to avoid buying the discs. Coinstar Inc.'s Redbox had been renting the DVDs for just $1 per day until recently raising the price to $1.20.
Netflix Inc. conceded to Warner Bros.' demands for the 56-day rental delay to ensure that it can still buy the discs at a discount. Netflix expects to suffer a loss this year, largely because its own U.S. price increases backfired in 2011 and triggered far more customer cancellations than management anticipated.
It doesn't appear Redbox is going to bend to Warner Bros.' will. "The current agreement Coinstar has with Warner Bros. is to receive movie titles 28 days after their release," Coinstar spokeswoman Marci Maule said in a written statement. "No revised agreements are in place."
Redbox could conceivably rent Warner Bros. DVDs on its own timetable by buying thousands of discs from stores, although that hard-ball tactic would drive up its expenses.
In a late October conference call with analysts, Coinstar CEO Paul Davis raised the possibility of finding "work arounds" if Warner Bros. or other movie studios tried to impose further delays on DVD rentals.
Netflix's cooperation with Warner Bros. and Coinstar's resistance underscore the different priorities of the two services.
In many ways, Netflix is just keeping its DVD-by-mail service on life support and leaving it up to each customer to decide when to pull the plug. Meanwhile, the company is pouring most of its money and energy into building up its service that delivers movies, TV shows and a growing amount of original programming to TVs and other devices with high-speed Internet connections.
