A few announcements today in the world of streaming movie delivery. I think these developments are indicative of some trends we will see coming down the road in the new media space.
First, RedBox – that kiosk you see in your grocery store that lets you rent discs for $1 a day – recently announced a partnership with Verizon to offer a streaming video companion service. Its been quiet for a few months following that news. But recently, leaks have come about a beta test. The sources indicate an unlimited streaming option for $6 a month. If you want to add physical discs, for $8 per month you can get 4 Redbox movie rental credits. Compare this to Netflix which charges $8 for streaming and at least another $8 for unlimited discs.
The difference here is that with Netflix, you get “unlimited” discs, but you have to mail them back and wait for the new ones to arrive. With Redbox, you get only 4, but you can immediately go to a kiosk and get a disc. The other key difference (other than price) is that with Netflix you get a huge back catalog of old films you can choose from online to get sent to you. This catalog is much deeper than the streaming only catalog. With Redbox, you will only get new releases that are available at the kiosks for a few weeks following release.
I think the wise choice will be to look at your viewing habits – do you want to see new releases, or do you like exploring older films?
Second, Netflix has announced they have set up a partnership with Disney. This means a few things, first Disney is releasing a few older catalog titles for streaming on Netflix.
Also, Netflix has announced that they will be the exclusive TV distributor for Disney movies. Suddenly the news that Disney was shutting down its own streaming service makes more sense.
Movies have “windows” of releases. First in the theater, then on DVD, then on VOD, then on pay TV options like HBO, then eventually on regular cable and broadcast TV. This way studios recoup their money back. They get more from a movie ticket than a DVD purchase, and they get more when you buy a DVD than when you see it on HBO, etc. So, if you want to stream or watch Disney movies at home, you will only be able to do so over Netflix. This is a big win for the company, and establishes it as even more of a competitor to typical premium cable options like Showtime and HBO.
The trend I see coming from this is that movie rights are going to become more exclusive. You are going to see more stratification between what is available on Netflix, Amazon, Hulu, Vudu, Redbox etc. It is going to look more and more like HBO v Showtime v Encore, where you don’t get to subscribe to just one and get everything you want to watch.
This was not the case in the past, because these online distributors were buying catalog films – older titles with smaller demand – and so they paid less and got fewer exclusives. Now that people are looking for new releases on streaming options, they will be paying more, and expecting more exclusive rights. Don’t think Amazon isn’t lining up similar deals to try to get exclusive distribution for a studio.
But for the consumer, this means you can’t just get Netflix and be OK. You might have to subscribe to more than one service. Suddenly cable cutting doesn’t seem as much of a good deal.