Netflix, Redbox Face New Restrictions

Though online video revenues are growing, they still do not approach the revenues studios and content owners earn from sales of DVDs, Blu-ray disks and rentals of content using those physical media. In the interim, studios seem to be concluding they are better off protecting the declining DVD sales business, even to the extent of harming the volume of rental revenues.

Studios seem to be moving to delay availability to Redbox and Netflix more than they have in the past, allowing a greater period of time when consumers will have to buy discs to see new release material, for example.

That is especially true as studios have concluded that Netflix now has gotten too much power in the distribution business. By increasing the length of time new movie and TV series content is available for rental, the content owners hope to arrest the revenue decline in physical media sales, at least for a while.

The overall consumer video business seems to have been declining since about 2004. So far, video offered using pay per view or video on demand, plus online revenue, has not kept pace with the decline in sales of physical media products. See http://ipcarrier.blogspot.com/2011/03/over-top-video-complements-linear-at.html.

Studios are aware of what happened in the music business, where online has not arrested the decline of music sales revenue. See http://ipcarrier.blogspot.com/2011/02/will-video-follow-music.html.