Film studios are working pretty hard to make sure that new online rental services don’t steal all their profits. But outside of movie theaters, they aren’t entirely in control of the distribution of their content. And if the studios aren’t careful, in the process of negotiating revenue deals, they might further choke off their own revenue streams.
This week, Warner Bros., Universal Pictures and 20th Century Fox announced they would withhold new releases from RedBox for 28 days or more after videos go on sale. In addition to delayed access to the video kiosk service, Warner is now seeking new deals with Netflix and will impose the same restrictions on the online rental site unless they give the studio “a day-and-date revenue-sharing option.”
Warner is trying to tap into Netflix’s increasing revenue potential. If Netflix gives in to Warner’s demands, other studios will follow suit. And if the studios are too greedy in their demands, they might lose out on even more money.