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Warner Brothers to Offer Online Rentals Alongside DVD Releases

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A NYTimes blog reports that Jeff Bewkes, Time Warner’s chief executive, revealed that Warner Brothers will now release "on demand" videos (including iTunes rentals) on the same day as the DVD release. Historically, on-demand releases have tended to lag behind DVD releases by 30-45 days to avoid sales cannibalization.

When Steve Jobs announced the iTunes Rental store at Macworld this year, he acknowledged that the rentals would appear about 30 days after the DVD release. We later noticed, however, that some iTunes movie rentals had started appearing much earlier than the expected 30-day delay. As it turns out, Warner Brothers was experimenting with this approach for the last few months, and found that DVD rentals only fell by 3-5 percent while DVD sales actually increased when on-demand videos were offered earlier.
Mr. Bewkes boasted to investors that the shift from DVDs to digital distribution, on the "day and date" of DVD release, will be better for Warner Brothers because it will eliminate some of the costs of manufacturing and distributing discs.
This shift, of course, is good for customers who are given more flexibility in purchasing video content.

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Analog Kid

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Mar 4, 2003
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Mr. Bewkes boasted to investors that the shift from DVDs to digital distribution, on the “day and date” of DVD release, will be better for Warner Brothers because it will eliminate some of the costs of manufacturing and distributing discs.

“Taking a customer and moving that person over from rental-physical over moving them to VOD day-and-date is like a 60 to 70 percent margin instead of a 20 to 30,” Mr. Bewkes said. “So it’s about a three-to-one trade.”
Holy Crap! Someone in a corner office actually looked at the math!

Of course, most of the rest of us hit the Age of Reason in the mid-1600's, but it's nice to know they're making progress...
 
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ccunning

macrumors member
May 3, 2006
61
3
I just can't get into the renting for my iPod thing.

I really think its geared more toward the AppleTV users. I rented a movie and my 30 days were going to be up while I was out of town, so I transfered the movie to my phone, and I have to say, it was a pain in the ass to watch.
 
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JasonK

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Apr 10, 2008
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Holy Crap! Someone in a corner office actually looked at the math!

Of course, most of the rest of us hit the Age of Reason in the mid-1600's, but it's nice to know they're making progress...

I am happy to hear this. Hopefully other companies will buy in to this "make a better profit" thing and customers will have more options. Ahhh, good ol' capitalism.
 
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addicted44

macrumors 6502a
Jun 6, 2005
532
168
Yeah, finally someone in the music industry realizes that lower costs is a Good Thing.

Someone must have sat him through econ 101
 
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Gherkin

macrumors 6502a
Apr 9, 2004
527
165
Why only rental? Give us the option to buy on iTunes the day of as well. What are they scared of?
 
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aLoC

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Nov 10, 2006
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The main things I buy are books, movies and games. Can basically do most my shopping from the Mac these days.
 
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aLoC

macrumors 6502a
Nov 10, 2006
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Why only rental? Give us the option to buy on iTunes the day of as well. What are they scared of?

Why not release on iTunes the same day the movie comes out in the cinema? Now *that* would be brave!
 
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slapppy

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Mar 20, 2008
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Purchase?

I would like to purchase them rather than rent. Even at 720p. As long as it has 5.1 DD.
 
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SirOmega

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Apr 17, 2006
704
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Las Vegas
Why not release on iTunes the same day the movie comes out in the cinema? Now *that* would be brave!

Because that would destroy movie theaters. The only movies people would want to see on the big screen are the summer blockbusters, so whats the theater going to do the rest of the year? Yea, Spiderman or Transformers you want to see in the theater. But most movies, I'll trade the inflated prices, sticky floors and other rude jerks in the theater for the 61"HDTV and surround sound of my house.

Holy Crap! Someone in a corner office actually looked at the math!

Indeed, this is what they should have realized a long time ago - pressing DVDs in China, shipping them over and distributing them to Blockbuster, Netflix, etc is expensive (and wasteful) when you consider that after the initial burst of demand when it comes out, 90% of the physical copies will be sold for cheap or discarded. This huge spike in demand and subsequent dramatic fall-off is perfectly suited to digital distribution where you can make an infinite number of perfect copies - just make sure you have a big enough pipe to handle initial demand.

Plus, even at 2Mb/s, people can get a DVD-resolution movie down to someone in realtime (maybe give the user 5 minutes to make some popcorn or take a leak, and let the stream buffer).
 
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aLoC

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Nov 10, 2006
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Because that would destroy movie theaters.

I think that's an assumption that's yet to be tested. Before today they were assuming digital downloads would kill DVD sales, but instead are finding it increased them.
 
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Michael CM1

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Feb 4, 2008
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I have rented 5 movies from iTunes this year. That's probably 5 more than the DVDs I have rented from my local store. I hate it because they're a little operation, but I just don't like renting physical DVDs much. If I rent, I'm just wanting to watch the movie. When I buy, I usually want to watch it a million times and get into the special features. This is why rentals via download will make these people rich if they ever figure out how people under the age of 50 think!

By the way, I have watched most of my rentals on my computer's 20" screen. I actually took "Escape from Alcatraz" with me to a relative's house on my iPhone. Watched the whole movie on it. No, not the best way to watch something, but it's not the worst either.
 
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technocoy

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Sep 4, 2002
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engadget is reporting that Apple is set to announce same day as DVD releases of all it's movies on the iTunes Store. Today

This could be very interesting indeed.
 
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The Grood

macrumors regular
Mar 1, 2006
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Does anyone have a clue when movie purchases and rentals will reach the UK store? Seems like we've been waiting forever...

Any Apple people out there please note: buying an ATV makes no sense here until this happens.
 
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brucebrendon

macrumors regular
Mar 30, 2007
179
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UK
Uk...?

my friend and i (in UK) brought some other friends an :apple:TV as we're always round their place using all their stuff (an mainly coz they don't like :apple: ).

pretty much zero content in UK, poop. not even 1 film! just as well we got them the one with the bigger HD then, err...

heck even some cheap UK filmhouses or something.

for now looks like we're gonna have to enrole in pirate and hack skool, Zzz... else it's a somewhat excessive youtube and podcast player.

oh and while i'm grumbling, an 'on-the-go' playlist'd be nice.
 
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Mark-Mac-Attack

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Apr 6, 2007
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England
Apple TV has **** all use in the UK, can't believe they push it to show ****ing tv shows! christ, tv shows are on tv, and they're free for gods sake,

such a missed opportunity ffs!


:rolleyes:
 
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Erwin-Br

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Feb 6, 2008
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The Netherlands
Apple TV will only be interesting to me when it's capable of what my current Windows Media Center can do: Watch and record live TV.

--Erwin
 
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kornyboy

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technocoy said:
engadget is reporting that Apple is set to announce same day as DVD releases of all it's movies on the iTunes Store. Today

This could be very interesting indeed.

That would be really good. I very much like to rent movies on the AppleTV that I only plan to watch once but I have always wanted the digital renting to appear on the day of the DVD release. I hope what you heard is true.
 
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Gasu E.

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Mar 20, 2004
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I think that's an assumption that's yet to be tested. Before today they were assuming digital downloads would kill DVD sales, but instead are finding it increased them.

Not 100% sure why you think that. If you think that is what the article says, who are not reading it quite right. What the article says is that digital download RENTALS increase DVD sales. That's because physical rentals were already replacing DVD sales. Download rentals are now replacing physical rentals; and download sales are less damaging to physical DVD sales than physical rentals were. At least, that is one of the theories offered. In any case, the second sentence quoted above is both wrong and irrelevant when examined carefully.
 
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bigmc6000

macrumors 6502a
May 23, 2006
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AI says Apple has formally announced it but doesn't give a link to the official release - any idea where this might be? I checked the Apple Hot news and there's nothing there - at least not yet...

This might actually get me to buy an :apple:tv...
 
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