Blockbuster flaunts new releases over Netflix, Redbox

Blockbuster has one major advantage over Netflix and Redbox, and it wants you to know about it.

Unlike those alternative rental services, Blockbuster gets first dibs on new releases from Warner Bros. That's because Netflix and Redbox agreed with the studio to hold back new releases for 28 days, while Blockbuster inked an agreement that has no such restrictions, even for its mail-order and digital distribution services.

In an advertisement for the screen adaptation of Sherlock Holmes, spotted by a reader of TechDirt, Blockbuster tells customers to "rent it while it's still a new release." Below is a spreadsheet showing that Blockbuster has the film available now, while Netflix and Redbox do not. A reader of Slashfilm spotted a similar advertisement outside a Blockbuster store for the film The Blind Side.

Why did Netflix and Redbox agree to delay new releases from Warner Bros.? For Netflix, part of the deal included more movies from Warner for Netflix's online streaming video library, which could potentially become more vital to its business than mail-order DVDs. Redbox's deal put an end to a legal battle with Warner, allowing the kiosk operator to continue stocking the studio's movies. Redbox had been buying its movies from retail stores after the studios cut off distribution, fearing that $1 per night rentals were cutting into DVD and Blu-ray sales.

It's not clear why Blockbuster was allowed to have an advantage. As TechCrunch noted, it could be because Blockbuster also sells DVDs, and Warner is desperate to save DVD sales. Or it could be because Blockbuster is desperate to save itself, facing possible bankruptcy, and paid handsomely to get an edge over Netflix and Redbox.

Blockbuster might as well flaunt the deal that it has, but it's a weak Band-Aid measure given the company's dire financial situation. In an SEC filing from March, the company detailed how difficult it will be to invest in new business models while sustaining its rental shops, painting a bleak picture for the once dominant chain.

It's worth noting that no other studios have worked out similar deals with Blockbuster, Redbox and Netflix. If Blockbuster crumbles, Warner Bros. will look foolish for being the only studio to make its customers wait for new releases.

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