Warner Brothers will begin national simultaneous release of its films on DVD and VOD. If the trial works, many of its films could show up on home televisions the same day they are available from NetFlix (NFLX) and Blockbuster (BBI). VOD revenue shares bring studios over 60% of the retail price. DVD’s yield closer to 15%. Hard to say which is better.
Of course, if these trials work as well as Warner believes they will, the other major studios are likely to join in. The economics are too good to resist.
NetFlix is quickly becoming last year’s movie delivery business model. And, Blockbuster’s model has not worked well since almost a decade ago. Perhaps that is why Netflix shares are down 20% over the last year and Blockbusters are off 50% over the last 24 months.
Douglas A. McIntyre
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