Hurt Locker: Netflix's 28-Day Window Would Decimate Their Top Rental List

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As you may have heard by now, Netflix has agreed to movie studio demands that they not rent new movies until 28 days after their DVD release. The idea is that this will help drive DVD sales, which have been plummeting in recent years, taking billions out of the pockets of the studios. Right now, this deal is only in place with Warner Brothers, but you can be sure that the other studios are going to want the same deal. Netflix says it’s going along with this because most of its customers care more about catalog (older) releases than newer ones. But the popularity charts suggest otherwise.

Each month, Netflix releases a list of the top 25 rented movies for the previous month on its Facebook page. This week, they gave out the data for January 2010, and guess what? Of the top 25 rentals, over half (13) would not have been fully available to rent for the month under the new 28-day rule. And some wouldn’t have been available at all. Clearly, this new policy is going to have a bigger effect on Netflix users’ rental habits that the company wants you to believe.

Here’s a full list of the top 25 rented films in January 2010 with their DVD release data next to the title, followed by a yes/no note of if they would have been available to rent for the full month of January:

1) Julie & Julia: December 8 —— No

2) District 9: December 22 ——- No

3) 500 Days of Summer: December 22 ——- No

4) Angels and Demons: November 24 —– Yes

5) The Proposal: October 13 ——-Yes

6) The Hangover: December 15 ——— No

7) Star Trek: November 17 —Yes

8) Up: November 10 ——-Yes

9) The Taking Of Pelham 123: November 3 —– Yes

10) Night At The Museum 2: December 1 —– Yes

11) The Ugly Truth: November 10 ——- Yes

12) Public Enemies: December 8 —– No

13) The Hurt Locker: January 12 ——- No

14) Inglourious Basterds: December 15 ——- No

15) Cloudy With A Chance Of Meatballs: January 5 —— No

16) Funny People: November 24 —- Yes

17) G.I. Joe: November 3 —— Yes

18) Harry Potter 6: December 8 ——- No

19) Terminator 4: December 1 — Yes

20) Gamer: January 19 —- No

21) A Perfect Getaway: December 29 —— No

22) Extract: December 22 —— No

23) 9: December 29 ——– No

24) Transformers 2: October 20 —— Yes

25) Ghosts Of Girlfriends Past: September 22 —- Yes

A few other things to note. First, two of the movies on this list benefitted from the fact that December 1 was a Tuesday (the day DVDs are released). In other months, these films may have missed the 28-day window depending on when the first Tuesday of the month was. Second, Netflix actually started implementing its 28-day rule in January, so films such as The Invention Of Lying were already subject to this and as such, not available to rent from Netflix. It’s hard to know if these movies would have made the top rental list even if it were available, but it’s worth noting (and more on that below). Third, it’s already a bit difficult to rent new releases due to demand, so it’s certainly possible that if Netflix focused on supply of newer films rather than removing them until 28 days later, many of the newer films would be even higher on the list.

Worse, as I alluded to above, at least four of the movies (and seven if you include those released on December 22, since that would put their availability in the last week of January) basically wouldn’t have been available at all in January under the new 28-day rule. People hoping to see Inglourious Basterds or The Hurt Locker before the Golden Globes or other awards shows would have been entirely out of luck.

Going back to The Invention Of Lying, while it wasn’t available to rent on Netflix, it has been available to rent on iTunes since its release (because Apple didn’t sign the bogus deal with the studios). Interestingly enough, it has been in the top 10 rentals on that service ever since its release (and that’s impressive given its relative lack of star power and somewhat tepid reviews — did I mention this movie made a whopping $18 million at the box office?). As I noted at the time, it looks like Netflix gaves its competitors, such as iTunes, a big wet kiss by agreeing to this 28-day window. If they agree to it with the other studios as well, Netflix’s rivals could see a surge of activity around these new release movies.

It’s too early to tell about illegal movie sharing on the torrent sites as a result of this new rule, but I would watch those charts closely to see how many Warner films show up on there simply because they’re not available to rent on Netflix.

Netflix continues to add older movies to its streaming service, as well as indie films, which is great, but it’s underestimating how much people care about renting newer releases. They just need to look at their own charts to see that.

[images: Summit Entertainment]

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