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Are DVDs Inconvenient On Purpose?

Soulskill posted about 5 months ago | from the couldn't-have-been-an-accident dept.

Media 490

Slashdot contributor Bennett Haselton writes: "Why do Netflix and a few other companies keep the DVD format alive, when streaming is more convenient for almost all users? The answer is not obvious, but my best theory is that it has to do with what economists call price discrimination. Netflix is still the cheapest legal way to watch a dozen recent releases every month — but only if you're willing to put up with those clunky DVDs." Read on for the rest of Bennett's thoughts.

I was noodling around Best Buy looking for a new laptop, and it occurred to me how inconvenient it was that I was limiting myself to models with DVD players. Either that, or thinking what a pain it would be having to take an external DVD player everywhere that I might want to watch a movie on my laptop. Then I started to wonder why this was.

Specifically: Why do movie studios allow Netflix to send out DVDs to their subscribers by mail, but not to allow the same option in the form of "virtual DVDs" that you could "check out" through their website, and stream them while they're checked out to you? Surely the streaming option is more convenient for almost everybody — no postage fees, no opening and sealing of envelopes on Netflix's end, no dealing with lost and scratched DVDs, etc.

Well, obviously movie studios would not allow Netflix to let users "check out" a virtual DVD, stream it, and then "return" it and instantly "check out" the next virtual DVD in their queue, since this effectively amounts to unlimited simultaneous access to all of their titles. (That's now Netflix's huge online streaming library works, but movie studios don't currently want to make all of their movies available for instant streaming.)

But then why not take all the movies that are currently only available as DVDs (not for streaming), make them available as "virtual DVDs", and only allow users to check out a certain number per month? This would mimic the limit imposed by the speed of the postal service, which only allows users to check out a fixed number of movies per month by mail. Netflix could keep its existing streaming library the way it is, and for the movies currently available only as physical rental DVDs, replace them with "virtual DVDs" that would count towards a user's monthly virtual DVD limit. Why won't movie studios let them do that?

Well actually, there's still a clear reason why movie studios would not allow this: a certain amount of revenue comes from impulse buys from users who decide that they want to watch The Dark Knight Rises right now and rent it from Google Play. (That's how I broke in my setup for holding a tablet in front of an elliptical while exercising, and worked out for the entire length of the movie to assuage my guilt from pigging out at a party.) If Netflix allowed instant checkout of virtual DVDs, the studio would lose the $5 or more that it makes when a user decides to rent a recently released blockbuster. (The studio would still get a cut of the money the user pays to Netflix for the virtual DVD plan, but not as much -- about $12 per month divided by about 12 DVDs.)

So, finally, suppose Netflix built this limitation into the virtual DVD plan as well — you could have a "virtual DVD" queue, with two or three virtual DVDs "checked out" at any one time, and every time you "returned" a virtual DVD, there would be a delay of 24 hours or more before the next DVD in the queue would be "checked out" to you. So the virtual DVD queue would essentially mimic Netflix's existing experience of renting DVDs by mail, except the content would be streamed, so you could watch it on any device with an Internet connection.

Now we have a fairly interesting question. If what I've described would be essentially "the same thing" as Netflix's existing DVD plan — except replacing physical DVDs with streaming, which would be more convenient for all parties involved — then why won't movie studios allow them to do that? Of course movie studios don't want their own DVD sales being undermined, but they already allow Netflix to "compete" with the studios own DVD sales by offering physical DVDs for rent, so why wouldn't they allow them to offer virtual DVDs for rent in exactly the same way?

I'm interested in questions like these which seem to have an obvious answer, but the obvious answer is a decoy which turns out to be wrong, and the real answer is necessarily more complicated. In this case, the obvious answer is that studios don't allow Netflix users to check out "virtual streaming DVDs" because it would compete with their own DVD sales. But that answer by itself can't be right, because studios do allow Netflix users to check out physical DVDs, which also compete with the studio's own DVD sales. So what could be their reason for allowing users to check out physical DVDs but not to "check out" virtual DVDs in exactly the same way, where studios would get the exact same cut of the rental rates as if they were real physical DVDs being checked out?

Unfortunately, by the very nature of these decoy-answer-making-a-deeper-mystery questions, if you ask them in a forum or on a mailing list, you'll get people spelling out the decoy answer for you with what they imagine to be the patience of someone talking to an idiot. Wherever I posed this question, I got the answer that studios wouldn't allow virtual DVD checkouts because it would undermine their own DVD sales. To repeat, the question is why the studios allow physical DVD check-outs from a service like Netflix but do not allow virtual DVD check-outs that would otherwise work in exactly the same way, with Netflix and the studios getting paid the same in each case.

One possible answer is that this is a form of price discrimination, whereby a seller tries to extract the most that different market segments will pay for essentially the same product. Student discounts for museum admission are a form of price discrimination — extracting more money from non-student adults who have more disposable income, while still gaining some revenue from poorer students who otherwise would have skipped the experience and paid nothing. In cases where a seller can't check a buyer's income level (or student status) directly, they can practice price discrimination by throwing up some sort of inconvenient roadblock — requiring buyers to clip a coupon or mail in a rebate to get a discount. Busy, high-earning professionals often won't bother, and will end up paying the higher price, while price-conscious bargain hunters will take advantage of the deal when they otherwise might not have bought the product at all. (On the other hand, a restaurant charging more for steak than chicken is not "price discrimination," because the steak really does cost the restaurant more to provide.)

In the case of a Netflix DVD plan, if you watch movies and mail them back as fast as you can on a plan that lets you check out 2 DVDs at a time, every month you could watch about 20 movies for a monthly fee of $12. If you rented the same recent releases on Google Play at $2-$5 a pop, it would average around $70.

So this could be a form of price discrimination by the studios. If you care about price more than convenience, you can just splurge for a Google Play rental whenever you want to watch a recent release, and you can watch it on your laptop, your tablet, or your phone, without the need for a DVD drive, but you'll pay around $70 per month depending on how many movies you watch. On the other hand, if you want to save money, the cheapest legal way to watch all new releases as soon as they're released to home media, is with a Netflix DVD checkout plan — but the inconvenient roadblock is that you have to be willing to deal with those clunky DVDs.

It's an odd explanation, but it's hard to think of any other reason why Netflix and the movie studios would keep propping up the DVD format, when it would be easier for them and for us to just offer "virtual DVD checkout" and stream the same content, as long as Netflix and the studios got paid exactly the same amount of money as they would make when we watch the content on a physical DVD. The inconvenience of DVDs allows Netflix and the studios to price-discriminate and separate the wealthy from the price-conscious, and extract money accordingly from each group — especially when higher-income users are more likely to own tablets or DVD-free laptops, and lower-income users are more likely to own DVD players. Can you think of any other reason why they don't simply replace all DVDs with comparable streaming "checkout" options?

Well actually, I can think of at least one other possibility. With a "virtual DVD checkout" plan like the one I described, users might feel some aggravation every time they add a virtual DVD to their queue, only to be told they have to wait 24 hours or more before they can watch it. With physical DVDs, such delays are caused by the postal service and by the physical impossibility of having a DVD show up instantly in your home. But under a virtual DVD checkout plan, despite the fact that it would be more convenient overall, the delay before you can watch a checked-out movie is imposed by Netflix (possibly at the insistence of the movie studio), so that might be where the user focuses their aggravation instead. It's conceivable that even though Netflix knows that a "virtual DVD checkout" plan would be more convenient for users, those users would irrationally come to resent Netflix more for imposing the delays on movie viewing, so the company just decides not to wade into those waters.

I'd be interested in hearing other theories, as long as people understand the question: Why movie studios don't allow movies to be streamed in a manner that mimics, as closely as possible, the experience of checking out DVDs by mail from Netflix (including, say, a mandatory delay between the time you select the movie and the time that you can watch it). Saying "Because it competes with their own DVD sales" is not an answer, since Netflix's physical DVDs also compete with a studio's own DVD sales. But there may be other answers that are actual answers, and maybe one of those is the answer.

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tldr (4, Insightful)

hypergreatthing (254983) | about 5 months ago | (#46585967)

It's probably because content providers are worried that someone will figure out a way to rip the netflix stream while they're confident that the physical medium will provide an adequate protection scheme using DRM while the truth is probably the reverse.

Re:tldr (5, Insightful)

GuitarNeophyte (636993) | about 5 months ago | (#46586007)

Read the first 5 "paragraphs" and the last 2. All the rest is repitition of the same thing in different orders.

Re:tldr (1)

lgw (121541) | about 5 months ago | (#46586057)

Yep, that's why I love Netflix DVDs/bluray. Very high quality, no (effective) DRM. Sadly, Netflix is letting its DVD business die. I commonly get DVDS 20+ up my queue shipped to me as the first 20 aren't available to ship (with no warning or "short wait" notice, of course, as Netflix just doesn't care). They have TV shows where some seasons are DVD-only, and some are Bluray-only (when both formats are for sale for all seasons - Netflix just doesn't care).

Re: tldr (0)

Anonymous Coward | about 5 months ago | (#46586245)

Hey to burst your bubble, but people already figured out how to rip the Netflix stream, and Ripping the discs is even easier.

Re: tldr (1)

TheRealMindChild (743925) | about 5 months ago | (#46586337)

No, no they haven't. If you google search, you come up with "Something something someone somewhere greasmonkey".

Re: tldr (4, Interesting)

jedidiah (1196) | about 5 months ago | (#46586389)

Ripping DVDs is certainly trivial. It's an ancient DRM mechanism that was nearly instantly hacked. The relevant information was widely shared and suitable tools are legion.

This stuff can't be integrated into the likes of iTunes because of the DMCA but it's otherwise readily available and easy to use.

The idea that DVDs in particular are difficult to deal with just sounds like the rantings of an Apple fanboy with his blinders on too tight.

Re:tldr (2)

interkin3tic (1469267) | about 5 months ago | (#46586287)

I agree, but I'd guess that it's actually that the agreements the studios made change slower than the market does: they're locked into the DVD agreement for various contracts with netflix, writers, actors, directors etc.

The inconvenient nature of DVDs compared to streaming probably IS the reason DVDs are released first, but I'm guessing if it weren't for the slow-to-change contracts, they'd do away with the DVD releases and just go to streaming a long time after release. That would satisfy their concerns for piracy and would, in their heads, increase the number of people going to theaters.

Re:tldr (3, Informative)

Artraze (600366) | about 5 months ago | (#46586313)

Sure content providers may not always know what's going on, but they are most certainly not so out of touch as to think that ripping steams is a real concern. Well, maybe in so far as an end user tool to save the stream might be a threat, but realistically DVD and BR are easily rippable and better quality so I doubt the concern is that great.

iTunes (2)

mozumder (178398) | about 5 months ago | (#46585971)

Use iTunes for new releases instead of DVDs.

Don't complain about it.

Re:iTunes (2, Insightful)

jaymz666 (34050) | about 5 months ago | (#46586039)

iTunes is only useful for apple people.
So I will complain about it, Netflix works on my TiVo, my PS3, my android phone, my android tablet, my computer, etc.
iTunes only works on my computer, if I have it installed. And since iTunes insists on installing all these extra services that don't do me any good, I don't
have it installed.

Re:iTunes (4, Informative)

jedidiah (1196) | about 5 months ago | (#46586157)

Since the Walled Garden makes pricing information a state secret, it's kind of hard too really. At least with Amazon, I can see if any given new movie can be "rented". All I need is a standard web browser. It doesn't matter if my display platform is supported or not.

Although the idea that a DVD is "clunky", is just mindless elitist claptrap. You stick it in the device and it plays. That's fairly simple really. If not for compulsory ads, there would be no real reason to seek out something else for a rental.

Streaming services and Virtual Jukeboxes are more advantageous for things you are going to watch more than once.

Netflix isn't the cheapest (1)

Anonymous Coward | about 5 months ago | (#46585979)

Try going to the library some time...

Re:Netflix isn't the cheapest (0)

Anonymous Coward | about 5 months ago | (#46586129)

Depends on the library. My local library only has old titles.

Re:Netflix isn't the cheapest (4, Insightful)

Vokkyt (739289) | about 5 months ago | (#46586155)

Interlibrary Loan can get you pretty much everything with similar transit times to Netflix DVD shipping.

Re:Netflix isn't the cheapest (1)

PIBM (588930) | about 5 months ago | (#46586397)

Our library even allow us to rent virtual book and virtual dvds; were we get to download the book or dvd immediatly, and we return it when we don`t need it anymore or it`s done automatically after a week, doing exactly what netflix isn't doing and the user is complaining about. Personnaly, I'm using only the books so far since the offering is mostly french and I favor watching a movie in it`s original language, and french books are what`s harder to find with other means. Still, it`s a great way to get the latest movies (and books) for my kids :)

Answer is totally obvious - content providers (5, Insightful)

SuperKendall (25149) | about 5 months ago | (#46585985)

Do you think Netflix would offer every movie on streaming if they could? Of course they would.

But Netflix also wants to keep a reasonable flat rate for streaming, so they offer what they can and try to grow the user base so they have enough overall income to pay for more popular titles to be included.

Until the content providers budge on price it's really that simple. After all, you can get EVERY new movie on iTunes to rent or buy - for a cost that to me is WAY too high. So until then I keep the dual Netflix streaming/disc plan so I can get discs for the few movies released these days that are worth watching.

Re:Answer is totally obvious - content providers (0)

Anonymous Coward | about 5 months ago | (#46586163)

Answer is so obvious that the post must have some other motive...

Netflix/Amazon Prime have some value, but Netflix DVD remains my primary mechanism for watching recent movies, certainly the best value since most movies are such utter crap I'm not even sure the Netflix rate is fair to me.

Re:Answer is totally obvious - content providers (3, Insightful)

Radical Moderate (563286) | about 5 months ago | (#46586243)

I agree. I deal with a lot of software publishers, and most of the old-timers are terrified of "the cloud". Want to run an app on a terminal server instead of installing on a couple hundred desktops? Get ready for a long discussion with Legal. More companies are starting to get it, but there are still a lot of holdouts. I expect content providers are the same: sure, they'll let you stream their old crap that's just clogging up the bargain bins, but there's no way they'll expose their shiny new releases to the horrors of "the cloud". It's a control thing, or rather the perception of control.

I'm not saying that's the only reason, but I expect it's a factor.

Re:Answer is totally obvious - content providers (3, Informative)

dave562 (969951) | about 5 months ago | (#46586401)

Are you a Netflix subscriber?

What you describe and reality are about 180 degrees opposite. The reality is that the older movies are DVD only. The newer stuff can be streamed.

My theory is that the newer releases are already digital and the distribution agreements are in place. To make the old DVDs available online someone would have to invest the time to shift them into digital format. Then there are the licensing agreements. Granted, licensing is a legal issue and not a technical one, but nobody is going to invest the time and money required to update the licensing terms for some obscure DVD that was released in 1997 because they know that fewer than a coupled hundred people are ever going to want to view it.

Re:Answer is totally obvious - content providers (4, Insightful)

transporter_ii (986545) | about 5 months ago | (#46586249)

Yes. Netflix can rent physical DVDs without negotiating with studios or distributors. In theory, they could run to Walmart and buy DVDs to mail out. They need nobody''s permission to do this. With streaming, they are at the mercy of the studios. Studios who want to offer their own streaming services.

The death of DVDs could equal the death of Netflix. It may or may not play out like that, but DVDs have been very good to Netflix for the simple reason of not having to enter into any agreements to do their core business.

There are any number of entities that would love to see Netflix fold. The way to do that is through license fees. They can turn the screws.

Re:Answer is totally obvious - content providers (5, Informative)

bennetthaselton (1016233) | about 5 months ago | (#46586357)

Yes. Netflix can rent physical DVDs without negotiating with studios or distributors. In theory, they could run to Walmart and buy DVDs to mail out. They need nobody''s permission to do this.

I'm pretty sure this is incorrect. The consensus among lawyers here for example:
http://www.avvo.com/legal-answ... [avvo.com]
is that it's not legal to buy a DVD from Walmart and rent it out. The movie rental companies that rent out DVDs have to pay a special higher price to buy the DVDs from the studios.

Re:Answer is totally obvious - content providers (5)

bennetthaselton (1016233) | about 5 months ago | (#46586321)

Well yes of course the restriction comes from the content providers.

That's why I didn't write, "Why doesn't Netflix allow every movie to be checked out as a streamable virtual DVD?" because the answer is obviously "Because the content providers won't let them."

The question I actually asked in the 3rd paragraph was: "Why do movie studios allow Netflix to send out DVDs to their subscribers by mail, but not to allow the same option in the form of "virtual DVDs" [where the virtual DVDs include a monthly limit and a delay on "checking them out"?" That answer is not obvious.

Re:Answer is totally obvious - content providers (2)

wile_e_wonka (934864) | about 5 months ago | (#46586381)

Also, I think the author fails to consider the idea that Netflix likes to keep things simple. If a move studio said "Netflix, you can license this movie for streaming, but only if it has the following limits on viewing..." or "...only if you charge an additional $___...," I think Netflix would say "No." Otherwise it would have to segregate its movies into categories with viewing limits and those without. And it would be a slippery slope. Some movies would have strict limits, others would get looser limits, and before long very few movies would have no limits. I think Netflix wants to keep things simple--if a movie shows up in instant view, it is available to watch all you want without paying extra. Period.

If you would like evidence that limits would be a less good (I won't say bad here, just less good) business move, I can only provide anecdotal evidence with a very small sample size, including only myself and my immediate family members: Amazon Prime--Amazon has a ton of content on there, some of which is free and some of which is not. Where do I go first when I want to watch something? Netflix--because I know that if it is there, I can watch it all I want for free. On Amazon, it might come up when I search, but that doesn't mean it will be free, and if it isn't free, I probably won't watch it at all.

Sync Licensing. (1)

t0qer (230538) | about 5 months ago | (#46585989)

Mechanical, compulsory is easy licensing to deal with. Not really much restrictions on the distribution format. Sync licensing on the other hand gives the artist the right to dictate which methods of distribution are allowed. So if an artist says, "NO STREAMING" there will be no streaming.

There. TL;DR;'d that for ya.

Re:Sync Licensing. (2)

spire3661 (1038968) | about 5 months ago | (#46586099)

And thus we expose why copyright is turning into a net loss for society. It simply is not in society's interest to allow the continued absolute control over venue. Copyright needs to find another mechanism besides controlling copying and distribution.

Of course (5, Insightful)

Huntr (951770) | about 5 months ago | (#46585997)

Everything about the --AA entertainment industry is purposely inconvenient. That way they can sell you the next, slightly more convenient version of the same content you already purchased.

Re:Of course (3, Insightful)

operagost (62405) | about 5 months ago | (#46586375)

This is not an intellectually honest answer. Netflix is offering both the inconvenient "old" method and the "next" slightly more convenient method. Obviously, there are separate groups of people who are willing to trade price for convenience and vice versa. The two methods aren't both offered in the hope that you'll rent the DVD, then stream the same movie you already rented. In both instances, it's understood that you were only renting it for a limited time. You didn't "buy" media.

No Internet? (1)

Frosty Piss (770223) | about 5 months ago | (#46586009)

Keep in mind that media such as movies and other entertainment are not the only use for DVDs, I'm thinking of enterprise software that while it can be downloaded (and often is these days), for practical purposes it's almost always burned to a DVD.

But also, not everyone even HAS an internet connection in rural areas, even when shity Hughes is an option.

Re:No Internet? (5, Interesting)

captainClassLoader (240591) | about 5 months ago | (#46586147)

In the rural valley I lived up until last year, my Internet was provided by cellular modem or MiFi - The only alternative was satellite, and the latency of satellite prevents VPN usage that I need for work. The MiFi comes with a 10GB cap, which is fine for most of my home and business usage. But 10GB is about 3 streamed movies. So I buy DVDs instead.

Library model (0)

Anonymous Coward | about 5 months ago | (#46586017)

Not an answer to your question, but what you've proposed is how my local public library system handles ebooks via Overdrive. Each checkout has a 21-day duration and I can have up to 10 items checked out at a time (vs. a much larger limit for physical media). The one thing they don't have is a queue system that automatically checks out and delivers the next available item on my "wish list".

not really sales, just the first sale (5, Insightful)

jaymz666 (34050) | about 5 months ago | (#46586021)

because physical media has that whole first sale doctrine which allows the rental of the physical goods, virtual goods not so much.

Re:not really sales, just the first sale (1)

roninmagus (721889) | about 5 months ago | (#46586141)

After reading that whole blurb, I think this is the more plausible explanation. It isn't the movie companies limiting netflix, it's netflix limiting itself. They pay a certain price for those DVDs which become theirs to rent as they wish, but streaming (with no physical media to own) costs a license fee per stream.

Re:not really sales, just the first sale (3, Insightful)

Bill, Shooter of Bul (629286) | about 5 months ago | (#46586143)

Yeah, this. its obvious if you know the law, or have been paying attention to the industry. This whole article is pretty pointless. Its all about first sale & licensing, not price discrimination.

Re:not really sales, just the first sale (0)

Anonymous Coward | about 5 months ago | (#46586281)

Exactly, why is there no discussion of the first sale doctrine?

The whole question of "why the studios allow physical DVD check-outs from a service like Netflix but do not allow virtual DVD check-outs that would otherwise work in exactly the same way, with Netflix and the studios getting paid the same in each case" is pretty easy to answer: they legally aren't allowed to stop NetFlix, whether or not they'd like to. There's not much point trying to get in their heads, because they don't have a choice.

NetFlix can always just go buy DVDs from Best Buy and lend them to whoever they please. Streams... now streams they have to license and those are subject to the whims of the studios.

Also any discussion of studio policy that assumes they're rational actors is kind of suspect in my view: it's interesting to speculate about their motivations, but they're not very rational. They're pretty clearly irrationally conservative when it comes to distribution and technology.

Netflix makes DVDs very convenient (0)

Anonymous Coward | about 5 months ago | (#46586035)

I have been using Netflix streaming with 1-DVD at a time service for years now. In my experience, 95% of the movies I search for (with the intent of watching) are available on DVD from Netflix, while maybe 25% of them are available by streaming, or less. If you are a serious movie buff you've got to go DVD, it's the only way you won't be constantly denied from seeing the movies you feel like watching / hear about / remember from your child hood. If you only care about the newest movies, sure, Netflix streaming may be the best for you, along with many other services out there. Until ALL the backlog of past movies on DVD are available for streaming, I won't be able to let go of my DVD subscription.

Netflix has single-handedly created the most convenient way to deal with the physical medium of DVDs. Their highly usable website lets you search, learns about what you like, makes suggestions, accepts your ratings, provides you with other people's ratings, lets you queue up movies and re-order your queue, provides insight on what movies are coming/going from their system, and automatically mails the next one to you when you return the previous one -- self addressed stamped return-envelope included! Done with a movie? toss it in the envelope it came with, and drop it in a mailbox. It could not possibly be easier than that.

No high speed Internet? (5, Interesting)

Strider- (39683) | about 5 months ago | (#46586055)

I work with a number of locations that lack any form of high speed internet. They have enough internet to facebook, order the DVDs, etc... but nowhere near enough bandwidth to actually stream the movies. The DVD-by-mail option is their only option, if netflix et al were to shut down this service, they would be very unhappy.

Re:No high speed Internet? (5, Interesting)

dysmal (3361085) | about 5 months ago | (#46586151)

It's also hella expensive to stream shows for the rug rat in the back seat when we're on a road trip. Cheaper to give my money to Netflix than to ATT/VZW for the trips that i need to keep the little snot gobbler sedated so i don't go postal.

Studios don't control the DVD (0)

Anonymous Coward | about 5 months ago | (#46586059)

Netflix doesn't have to get permission from the studios to send you a DVD, but they would have to get licenses to stream even a virtual DVD.

Its the law (1)

smoore (25406) | about 5 months ago | (#46586061)

>Specifically: Why do movie studios allow Netflix to send out DVDs to their subscribers by mail, but not to allow the same option in the form of "virtual DVDs" that you could "check out" through their website, and stream them while they're checked out to you?

Its the First Sale Doctrine. Once Netflix has purchased the physical medium of a DVD the movie studio has no control over what they do with it. With digital formats however Netflix never actually owns medium, they are just granted a license to use it and the studios maintain control by changing the license as they see fit. The studios would love to stop the use of First Sale and the subsequent mailing of DVDs, its just that that right goes back to printed books and was well established before digital medium existed. The model of licensing movies they way they do provides them with much more control and profit than a mimicry of physical medium check out system.

Re:Its the law (4, Insightful)

jandrese (485) | about 5 months ago | (#46586169)

This. The reason Netflix was able to build an empire on DVDs is that they didn't have to ask permission from every studio to do it. They just bought the DVDs and put them in the mail. This is also why the streaming selection sucks, because media companies wrote the laws for streaming, and Netflix has to put their balls directly in their hands and ask how hard they want to squeeze. The situation won't improve without a major overhaul in copyright law, which is absolutely not going to happen anytime soon. If anything, Congress will make the laws even more restrictive/stupid because that's what they're getting paid to do.

they do not "let" netflix (4, Insightful)

kimvette (919543) | about 5 months ago | (#46586067)

> Specifically: Why do movie studios allow Netflix to send out DVDs to their subscribers by mail, but not to allow the same option in the form of "virtual DVDs" that you could "check out" through their website, and stream them while they're checked out to you?

They don't "let" Netflix do it. It's netflix's right to do so and the movie studios tried to stop them, just like they tried to stop VHS and Beta rentals when VHS gained traction in the late 70s/early 80s. The reason DVD and Blu-Ray remain so popular is that people want to OWN what they buy - they don't want to "license" it on a per-platform or per-device basis (which is why DIVX died), and they don't want the movie to disappear when the "seller"/"licensor" goes under or simply decides the business isn't profitable off and exits that industry vertical. I'm sure most consumers do not think it through that carefully but have a vague notion of the possibility.

And if they do buy a copy of the movie and want to take it to a friend's house and find that they cannot, then they learn and go back to physical media (or to unencumbered, ad-free "pirate" torrents).

And yes, you do OWN that copy you buy. Even the movie producers acknowledge this in advertising: "Own it on DVD or Blu-Ray today!!" They are very consistent about this, and it's known by them as well as thinking people that you OWN that copy of the movie (or album, or whatever) just as much as you OWN any book you buy- you're just forbidden from violating their exclusive distribution rights granted to them as the copyright holders through copyright law (or by contract with the actual copyright holders again via copyright law).

Territory protection.is the bigger issue (1)

Opportunist (166417) | about 5 months ago | (#46586073)

The DVD distribution method is established, if they switched to streaming investment would have to happen. That's Netflix' reason. But there's probably much more to it.

There's also that other aspect, where streaming is hard to reign in. When dealing with physical media, you can much more easily determine who gets them. And while it may not matter to Netflix, you may rest assured that it does matter big time to the various distributors who still maintain a form of territory protection. You may have noticed that there is no such thing s Netflix in Europe (at least to my knowledge), for the simple reason that it would instantly put a fair lot of sponges out of business. Because every single country has its own distribution chain, and having a single place where you can easily get movies would threaten that convenient money printing machine.

A cheap streaming system would be a disaster to that market protection strategy, because it would work globally. Yes, I can't stream from your offer in the US because I'm not in the US. So? Welcome to the wonderful world of the internet where it is trivial to set up a proxy in the country where I "should" be. Getting a CC to pay for it is also not that big a deal, and if push comes to shove, there's companies who will gladly offer that service to you.

With DVDs, this threat does not exist. It's trivial to keep movies out of the country where you don't want them. Customs are quite happy to cooperate with movie distributors...

Re:Territory protection.is the bigger issue (1)

ruir (2709173) | about 5 months ago | (#46586255)

It would work globally like pirate bay, yes sir...In theory that arguments hold water, in practice they are shooting themselves in their own foot. If for instance, Apple could stream musics and movies for cents a pop, they would create a new model of business in itself where people would stop caring about buying bootleg copies or downloading them from the Internet. The thing is, they dont because they are greedy, and prefer to ignore the laws of demand and market, and instead bully their customer base into paying what whatever they think they can get away with charging and compensating them for the market of piracy they themselves create with taxes on DVDs and media. I no longer care for DVDs, none of my equipment at home has them anymore, and I really get mad when physical stores waste so many real estate which is expensive displaying hundreds of shelves of a media which is outdated and should be dead by now.

contracts.... (4, Insightful)

jythie (914043) | about 5 months ago | (#46586087)

The author is looking at this from a tech geek perspective, trying to find explanations in terms of mathematical or technological influences.

The first big flaw is the author is starting with the assumption that DVDs are less convenient then streaming 'for almost all users'. Only about a 3rd of the country have fixed broadband currently, meaning a significant number of people are poorly served by streaming right out of the gate.... so there is probably a bit of social group blinders going on there.

Moving away from that, I do not think the OP really appreciates how much of a pain in the butt dealing with the contract is. Studios often do not have the simple ability to wave a pen and allow DVDs to be streamed, the original rights were generally not drawn up to include that kind of availability and courts have already decided that 'we have the physical DVDs and stream/rent them out' technical solution does not get around the legal interpretations of streaming services.

That is not to say there is not politics and price fixing thrown in there, but you really can not skip over these two rather major factors and get a complete picture of why. If nothing else there is plenty of politics involved, studios would probably LOVE to stop Netflix renting out physical DVDs but they are legally unable to prevent that, and control over the order of release of a film is a huge deal to studios (it is debatable how much of it is purely circle-jerking power vs real economic benfit, but most people outside the industry are probably not going to have the background to really know).

Re:contracts.... (1)

Jeff Flanagan (2981883) | about 5 months ago | (#46586335)

>The author is looking at this from a tech geek perspective, trying to find explanations in terms of mathematical or technological influences.

If the author was a tech geek, they wouldn't have opened by derping about using DVDs on a laptop, because they would have been playing MKVs from the hard drive for many years now.

They'd also realize that a virtual DVD scheme that limited the number of movies played aver a certain time-period would add a cause of frustration to the online process. Those of us that use Netflix over the Internet are accustomed to playing as many movies as we want.

Right of First Sale. (1)

Jason Pollock (45537) | about 5 months ago | (#46586091)

In the US, anyone can buy a DVD and then rent it out. That's the right of first sale, and that's how RedBox did their rentals on day of release - they paid retail at WalMart.

Copyright law and the first sale doctrine (2)

z4ce (67861) | about 5 months ago | (#46586105)

If you go to other countries where the first sale doctrine doesn't apply (like Australia) you'll find the DVD and Streaming rental prices are about the same. I think the reason you see such a discrepancy here in the USA, is that once a company buys a DVD the copyright owner can no longer control its use. With a streaming rental, it is considered distribution and they do require licensing.

We are now all ##AA-Stooges (5, Insightful)

passionplay (607862) | about 5 months ago | (#46586109)

The content companies have won. The brainwashing in the schools over the past 20 years has succeeded.

We have a 1770 word essay why ownership of media is clunky and why it is ok to keep paying to watch shows for entertainment. Have we really come so far from the concept of sharing and owning media that we now have to subscribe to "physical media" = bad -> We should always just stream?.

Streaming inherently disavows your right to own media and to make it your own. The end is at hand..

Streaming should be an OPTION. DVD's should be an OPTION..

##AA Stooges should not be allowed to post such rubbish. And those that are now brainwashed should submit to de-programming..

Otherwise we are destined to give away our right to creativity

Re:We are now all ##AA-Stooges (1)

ruir (2709173) | about 5 months ago | (#46586301)

The fact is the DVD train is long gone and nobody notices. Apple for instance no longer sells equipment with them. And when I had a computer with a DVD at work, I resented the extra weight it added to the machine. now then again, the absence of DVDs doesnt mean one-time streaming. One alternative is the iTunes store, if just they would price the movies in a sensible price, they could make millions and millions of sales. Another alternative are DivX/matroska and family.

Re:We are now all ##AA-Stooges (0)

Anonymous Coward | about 5 months ago | (#46586379)

>Streaming inherently disavows your right to own media and to make it your own. The end is at hand..

The end of what? Media hoarding? Keeping our own individual copies of media that could be streamed was only necessary before high-speed Internet. I know that many people have a malfunction that makes them want to clutter their homes with useless crap, but there's not a lot of value in doing that with movies and TV.

I guess I don't see the reason this is on the (4, Insightful)

aussersterne (212916) | about 5 months ago | (#46586117)

front page of Slashdot. Of course this is price discrimination. Charge what the market will bear. Segment your users accordingly. Maximize revenue through each avenue, carefully ensuring that you match value offered to segments to pricing, etc.

This is not a story, this is marketing 101—it's what every marketing-driven organization (basically everyone in the modern economy) does, and the bigger they are, the better they do it.

It's not that any of this is wrong, it's just not newsworthy. We could write the same piece about any number of consumer goods companies, SAAS platforms, etc.

I guess my response to this is: "Yes. And?"

Re:I guess I don't see the reason this is on the (1)

PaddyM (45763) | about 5 months ago | (#46586367)

Slashvertisement:
You didn't see the blatant plug of "The Dark Knight Rises" along with the subtle subliminal record-setting use of the word DVD?

A better question is "who invented those caps in the laundry detergent?" The whole purpose is to prevent spillage with that strange shape and surface tension etc. But due to the impracticality of building a single-piece bottle with that shape, manufacturers just add the cap to the original bottle with some kind of adhesive. Since that adhesive appears to wear out from contact with detergent, the detergent leaks out from that seam whenever you have to tip it that far. I.e. the detergent leaks from the very same spot it always did before the cap was invented. This always bugged me why manufacturers even bothered doing that.

Analysis (0)

Anonymous Coward | about 5 months ago | (#46586123)

So, we're analyzing business models now ? Uh, ok.

MPAA and RIAA distribution models are broken with the advent of the internet, plain and simple, physically delivering digital product is effectively dead. The right people are not looking at the problem wholistically (or trying to control it too much), as a result their business models should suffer. There's a gap in the marketplace that you've identified. Congratulations, start a business on it or send the enhancement to Netflix/Google Play, etc, to mull the idea over.

I should also mention your plan does not account for some snags :
1. probability of customers doing a number of these things (cost of a person's time)
2. probability of customers maintaining their own cache of these disks (legally or illegally).

The concept of "ownership" vs "rental" is what has the industry in knots. See UltraViolet ( https://www.uvvu.com/ ).

Consider... (3, Interesting)

JMJimmy (2036122) | about 5 months ago | (#46586131)

Digital streaming is without a doubt more convenient from a certain standpoint, especially a short term view. There are several reasons DVDs are important to some as well as a longer term view. For basic consumption it's great, not so much for ownership and control.

First, there's the human aspect to it. Many like to collect objects - from stones to Elvis memorabilia to various forms of culture and everything in between. There's a certain satisfaction to owning a physical object like a DVD or book. While it can be taken to unhealthy extremes, for most it's just a hobby.

Second there's the long term view. Digital streams, cloud based collections, etc are all temporary. No one owns anything and are at the mercy of corporations as to whether that item will stay viewable over the long term.

Third, not all services are created equal. While I can buy just about any DVD I'd care to, when it comes to Netflix the offerings are pathetic simply because I'm above the 49th parallel. I'd be paying the same amount for a fraction of the content simply due to my geography.

Re:Consider... (3, Informative)

JMJimmy (2036122) | about 5 months ago | (#46586145)

oh and fourth: Not everyone can get quality internet. Netflix on a 3Mbps radio with the tower 4km away is impossible.

Re:Consider... (2)

ZahrGnosis (66741) | about 5 months ago | (#46586271)

Thank you... I can't believe how many posts it took before someone mentioned this. "Only" 70-80% of the country has some form of internet or broadband, depending on who you ask... I bet the remaining 20+% account for more than their fair share of DVD users (I can't be sure, but still). Alienating that group is potentially bad for business.

Your first three points were very good as well... Ultimately, though, it's also about what people are willing to pay for. I don't really care WHY people are renting DVDs, but as long as they still want to (any of the reasons you gave or more), providers will be willing to take their money. Given that streaming options are becoming more and more prevalent, it's less likely that people are being forced to and more that they prefer to, but either way people keep buying DVDs.

I, personally, buy them because they're cheap, I like having them, I can be more sure what my collection includes (my options aren't taken away by constantly changing catalogs), I can share them, they work on all sorts of old cheap hardware... all sorts of reasons.

Re:Consider... (0)

Anonymous Coward | about 5 months ago | (#46586295)

Netflix actually streams at surprisingly low bitrates (0.7 Mib/s, 1.6 Mib/s, 2.3 Mib/s, or 5.3 Mib/s). If you're actually getting 3 Mib/s with reasonably low packet loss, then you should have no trouble whatsoever streaming Netflix at the second highest quality tier.

Well... what about consumer demand? (1)

AllenABQ (987944) | about 5 months ago | (#46586149)

DVD players are relatively cheap and as appliances they last for years on average.

Before claiming Netflix and/or the studios are conspiring to hold back streaming, maybe you'd better research their customer base.

What is a market penetration of streaming devices into the living rooms of households within the bottom 50% of incomes? Of DVD players?
How many are comfortable with their current DVD player setup and renting through Netflix or through a DVD kiosk at the grocery store?
How many can afford or are willing to spend money on high-speed Internet suitable for streaming purposes?
How many would replace a broken DVD player with a streaming appliance?

Re:Well... what about consumer demand? (1)

jedidiah (1196) | about 5 months ago | (#46586265)

A modern "DVD player" is a streaming appliance.

So the only real barrier is the monthly cost of Internet service.

Chances are that people already have a suitable streaming appliance and may not even know it yet.

Oh good grief... (4, Interesting)

the_skywise (189793) | about 5 months ago | (#46586159)

There's more at play here than Netflix and "Hollywood".

You have wal-mart, Best Buy and Barnes and Noble, Amazon, Redbox and other stores/physical places that continue to market DVDs.

Getting rid of the DVD market means that the marketing of movies falls from many stores to a *few* streaming providers which would give them far more leverage on pricing and distribution then Hollywood is ready to give up.

Also, streaming movies has relatively expensive up front costs requiring internet service and a decoder box plus an additional monthly fee that some people can't afford. (Let alone the older generation that can't figure out all that new-fangled GOOEY menu streaming stuff... and have enough problems just putting a disc in their DVD player!)

DVD's still in demand (0)

Anonymous Coward | about 5 months ago | (#46586167)

Could it be because of the shitty, overpriced, fucking internet service we have here in the U.S? U.S Netflix does not have any good selections and it's the same old crap being recycled every month. But at'least with DVD's you own the physical disc containing the movie unlike streaming which you don't. Convert your dvd collection to some format and stream it to your own personal devices at home.

Not everyone can stream (4, Interesting)

franknagy (56133) | about 5 months ago | (#46586181)

This constant harping on how great streaming is bugs me. While that may be true in urban cores,
in the technological hinterlands we are lucky to *have any* Internet connections. When home,
I have problems getting short YouTube videos to play at all (if they do play, I get long hangs
every few seconds). Last time I looked my choices were AT&T DSL (I to not think they can provide
Uverse to my home), Comcrap or Clear (which is what I have). I used to have AT&T for home phone,
DSL and GoPhone cell service - I will *NEVER* willingly be an AT&T customer again if I can at all avoid
it. And there is a reason I listed the 2nd choice as "Comcrap".

I have never had Netflix but if I were to sign up it would be only for their DVD service.

As is Ihave a large collection of DVDs in hand (TV shows, movies - lots of anime). So I do not
find them "clunky" at all.

maybe because people use them? (1, Interesting)

Anonymous Coward | about 5 months ago | (#46586189)

Wow, your social circle is a bit limited. Visit your grandmother in the retirement home occasionally. You're making a lot of assumptions about what "almost everyone wants" that I don't think are true.

You point out that having DVDs allows studios to make more money, and then wonder if there's any other reason they do it. WTF? They make more money this way, of course they're going to do it. No other reason is necessary.

You want to pay more to see a new release? Try a movie theater or iTunes. This is the dumbest thing I've seen here.

bandwidth (1)

Anonymous Coward | about 5 months ago | (#46586195)

Yes, obviously the MPAA make things as inconvenient as possible for customers for their own malevolent purposes, but here's a big hint for the author: because of the borked-up approach that ISPs use (oversell, under-deliver, charge through the nose for it), many (most?) of us are not blessed with a cheap, fat, unlimited connection to the internet. Even if the MPAA weren't the [expletive] [expletives] that they are, it would still be more cost-effective for most of us to rent a few physical DVDs than to stream "virtual DVDs'.

Flaw in your reasoning (5, Insightful)

Drewdad (1738014) | about 5 months ago | (#46586199)

"they already allow Netflix to "compete" with the studios own DVD sales by offering physical DVDs for rent,"

The studios do not allow it. The law allows it, because the law allows Netflix to rent physical DVDs that it has purchased.

The media companies would love to be able to block Netflix, lending libraries, etc. but the first-sale doctrine prevents them from doing so.

http://en.wikipedia.org/wiki/F... [wikipedia.org]

Greedy MOFO (1)

Fluffy The Destroyer . (3594057) | about 5 months ago | (#46586207)

cause my ISP is a greedy mofo that charges me a high price if I go over a certain amount of bandwith. I've got my Internet service through a reseller so I pay around the same price but I know some resellers that are cheaper but they're 2 differences with resellers instead of the carrier directly 1- unlimited bandwith 2- support takes longer to solve problem if it gets complicated since they have to contact the carrier themselves. But in the end, i rather have a reseller ISP since I have unlimited bandwith so fuck you Bell or Videotron (Yup, I'm in Québec/Canada)

Rural (1)

Average (648) | about 5 months ago | (#46586209)

Several other people have mentioned it, but there's a lot of off-decent-broadband people out there (get online via satellite or cell-stick). These rural households may only be 5-7% of the nation, but since you see red envelopes in *almost every* country house I'm ever in, it wouldn't surprise me if they make up 15-20% of Netflix's customer base.

Can't get that many new releases. (1)

scorp1us (235526) | about 5 months ago | (#46586211)

When I see the commercials for new releases I put them in my DVD queue, Some amount of time (weeks) later they actually show up at my door and I'm pretty good about keeping my queue moving. Usually I put the disc back in the mail immediately after viewing.

But anyway, Netflix has a wait queue for new releases.

I always just assumed Netflix didn't put it all on streaming just to have a rental business. If there was a premium streaming option for the cost of DVD+streaming, I'd go for that, Fios/Comcast throttling included.

Artificial ISP imposed limitations (1)

spafbi (324017) | about 5 months ago | (#46586213)

As long as ISPs continue to implement bandwidth metering, and the use of network traffic shaping to decrease the speed at which streams from streaming media providers who have not paid additional tolls to said ISPs to have prioritized speeds for delivery of content to their customers, physical media such as DVDs and Blu-ray discs will be a virtual necessity to deliver new content to folks afflicted by ISPs which impose artificial limits on traffic priority, bandwidth, and data usage. On a personal level, While I do use streaming services with frequency, I do have to keep an eye on my data usage. To help keep data usage lower, I find the use of services such as Netflix and Redbox fulfill my requirements for new content in a relatively convenient manner. I will likely continue to use physical media as a primary alternative to 'easy' streaming solutions as long as ISPs continue to practice consumer unfriendly practices.

Re:Artificial ISP imposed limitations (1)

spafbi (324017) | about 5 months ago | (#46586247)

And, yes, I do understand the original poster's call for a "virtual DVD checkout" plan, and would welcome such a service as bandwidth, traffic prioritization , and data usage will allow.

Um.. What? (0)

Anonymous Coward | about 5 months ago | (#46586215)

The basic premise that streaming is always "more convenient for almost all users" is wrong. Almost everyone I know has times they prefer not to stream, some are unable to stream almost ever.

Streams make very little money. (1)

Rinikusu (28164) | about 5 months ago | (#46586223)

Check out how much some of your favorite artists make via spotify and the like. Of course I'd rather you buy my $15 CD than give me .00005 cents off a hundred plays. If that. The "long tail" is yet to be determined.

I can't imagine that streaming services such as Netflix pay that much to the studios, either, so of course the studios want you to buy the DVDs. If you can't wait for the streaming option, by golly, Best Buy will have it for $19.99 or $24.99 for the bluray on release date. I know many of you will just get it from BitTorrent anyway, but there's plenty of us who would rather just use the convenience of the disc or the Netflix app.

Doctrine of First Sale (1)

ttucker (2884057) | about 5 months ago | (#46586225)

Essentially, the studios allow the netflix DVD service because they have no legal right to disallow it. Some time ago it was ruled, in the US, that when you purchase a book, DVD, etc..., of a copyrighted work, that you physically own it like an object. At that point you are free to sell, rent, give away, destroy, keep, or whatever else you can legally do with an object that you own, regardless of the copyright holders exclusive distribution right. Netflix owns the DVDs, they rent them to you, movie studios can not stop it. Read more here: http://en.wikipedia.org/wiki/F... [wikipedia.org]

DVD/Blu = qualtiy, features (0)

Anonymous Coward | about 5 months ago | (#46586227)

As my kids point out. Disks are higher quality than streaming. Also easier to jump around, better sound, have bonus features, and subtitles.

lt;dr (3, Interesting)

AK Marc (707885) | about 5 months ago | (#46586235)

DVDs are "good" because you own them. You can "stream" them from your DVD player to your TV any time you want. Internet out? Grab a DVD off the shelf.

They are also low-barrier. Any granny can pay $100 for a DVD player (likely less) and have someone plug it in if they don't want to, but most RCA DVD players come with all the cabling, and it's all color coded. Granny doesn't need to figure out how to "stream" or anything. Doesn't have to buy a special Smart TV, or media device or computer. DVDs just work. You pick the one you want, put it in, and it starts playing (after 20 minutes of warning and advertisements).

What's wrong with "permanent" and "just works"?

The answer is obvious (4, Insightful)

DerekLyons (302214) | about 5 months ago | (#46586237)

"Unfortunately, by the very nature of these decoy-answer-making-a-deeper-mystery questions, if you ask them in a forum or on a mailing list, you'll get people spelling out the decoy answer for you with what they imagine to be the patience of someone talking to an idiot."

Bennett, that's because you are an idiot.

Of course the MP3 generation... (0)

Anonymous Coward | about 5 months ago | (#46586259)

...would not understand why I prefer a BluRay DVD over a streamed movie.

Because not everyone is like you (2)

petes_PoV (912422) | about 5 months ago | (#46586269)

... streaming is more convenient for almost all users

Except for the ones who don't / won't / can't stream. Not every Netflix user (or person on the planet, for that matter) knows how to, or likes to, or has the internet access or bandwidth to stream HD video.

That there is still some demand for DVDs to buy demonstrates this very clearly.

a few other reasons (0)

Anonymous Coward | about 5 months ago | (#46586273)

For Netflix to distribute physical DVDs, it must purchase the DVD.
Additionally, it must pay each time the DVD is "rented"
If virtual DVDs were allowed then Netflix would not have to buy X number of DVD resulting in lost revenue due to lost sales - could be negated by some other price structure between studio and netflix but remember netflix by their current purchase of DVD is subsidizing DVD production for the studios.
Requiring a physical DVD limits how many times it can be rented - scarcity equals pricing power - studio can probably tell you how much they make when a Netflix DVD shows "Long Wait" in their queue.

A time long ago (1)

macdude22 (846648) | about 5 months ago | (#46586277)

I remember when I first got broadband in 2002 (512/256 DSL, wow such fast) and I had a Dish DVR I often mused that Netflix should send me a box where they would trickle images equal to the number of rentals I had out to my system. I would watch the DVD as if it were a DVD on this box. I guess in my head I was just merging the dish DVR, my experience at ripping DVD isos, and the Netflix service. At those speeds the size would have time limited you anyway. Hell, it wasn't until Netflix actually launched Watch Now years later that it even occurred to me that this wouldn't be how they stream content if they ever got into that market. I was just envisioning this box that would download dvd images. I still have 1 disk with Netflix, there are some things I like to watch on Blu-Ray, the streaming is convenient but man the compression tears up a lot of the Science Fiction shows.

Greed (1)

PopeZaphod (651956) | about 5 months ago | (#46586289)

The only reason why movie studios do this is greed. They're afraid they'll lose money if they put everything up as streaming. And it's ridiculous. For example, "The Expendables 2" is available streaming on Netflix... but the older film "The Expendables" isn't. What the hell, Hollywood? They have to realize that for a large number of people, not having something available streaming or affordable means that they're just going to torrent it. They're losing money in the long run. You can't stop the signal.

words, words, words (0)

Anonymous Coward | about 5 months ago | (#46586299)

too much to read

Netflix discs are still a compelling product (1)

slaker (53818) | about 5 months ago | (#46586303)

I've had an 8-at-a-time Netflix subscription since 2000 and I've been copying discs for that entire time. My goal is to touch a disc one time and Netflix facilitates that - I rip the disc and send it back. I don't mind doing it (at this point it's automated). My local copies tend to be better than the pirated product and it's not like my ISP is going to rat me out for doing it.
In theory I can download faster than Netflix can mail me discs, but dealing with physical discs more or less eliminates the risk factors from piracy. I'm willing to accept the slight inconvenience of having to put a disc in a drive for that.

Streaming is more convenient? (1)

QuietLagoon (813062) | about 5 months ago | (#46586309)

Obviously the author is not a Comcast customer....

Not everyone has broadband internet access. (0)

Anonymous Coward | about 5 months ago | (#46586311)

Not everyone has broadband internet access.

Pay per view (1)

Animats (122034) | about 5 months ago | (#46586325)

All that blithering. The business isn't about DVD vs streaming. It's about metered flat rate (Netflix's 2 DVDs at a time) vs pay per item (Amazon, Google streaming).

Pricing models in the movie industry are an interesting subject, but the original poster clearly knows nothing about them. This has been discussed to death in the trades (The Hollywood Reporter and Variety). Hollywood is desperately trying to avoid commodization of movies, something that's already happened to music.

Why? Game theory. (0)

Anonymous Coward | about 5 months ago | (#46586333)

Being inflexible is always a good business move. Certainly not a functional thing to do, but CEO's brag all the time about the strength of inflexibility. You think that's dysfunctional? Just about everyone relies on inflexibility to survive, in one way or another.

KISS- The simple answer is the best (1)

Anonymous Coward | about 5 months ago | (#46586347)

It seems like you are really reaching to find some complicated answer to the behavior when it really has a simple explanation.

Studio's can't prevent Netflix, Redbox, etc from buying DVDs and renting them out. They can prevent them from streaming movies. Given the chance I think the studios would block Netflix, Redbox, etc from renting new releases on DVD too just to try to get a few more sales of their DVDs. Yes it is all ultimately about them trying to get as much money in as many different ways as they can but I really think the simple answer is lack of control of DVDs.

Sure there are other reasons why it isn't done such as quality of streaming vs a bluray or DVD, Accessibility, cost of infrastructure for netflix etc but I think these would all be overcome if the studios allowed the streaming of the new releases or couldn't prevent it like with DVDs.

Three words: Lack of coverage. (5, Informative)

DaveV1.0 (203135) | about 5 months ago | (#46586363)

You seem to think that high speed internet access is universally available across the united states. I have news for you, it isn't. There are huge swaths of the country that don't have access to high speed internet at any price. In many places. That doesn't include the large number of people who can afford a DVD player but can't afford an internet connection, those who don't have a permanent residence, people like truck drivers who don't have access to internet most of the time, etc.

Bennett Haselton, you need to get out of your suburban ivory tower and experience life as so many do, without all the wonderful advantages you currently enjoy.

Sorry, what? (5, Interesting)

gstoddart (321705) | about 5 months ago | (#46586391)

Why do Netflix and a few other companies keep the DVD format alive, when streaming is more convenient for almost all users?

You lost men when the premise of your story was false from the first sentence.

My network speeds and bandwidth allotment don't make streaming 'more convenient', it makes it stupid. If I want to watch a movie twice, why would I pay my ISP twice for the bandwidth?

If I want to watch a Blu Ray film, I pop it in and watch it. No jitter, no lag, no asking permission. I just press play.

If I want to watch a movie on a plane, I just bring a few disks with me and put them in my laptop.

If I want to loan a movie I own to a friend, I walk to my shelf and hand it to him. He takes it home, and can watch it all he likes.

Heck, I can go to a place which doesn't have good interwebs ... and you know what? I can still watch a DVD as long as I still have electricity.

There's no metrics being gathered, no opportunities for targeted advertising, and none of the aspects of streaming which I find annoying and inconvenient.

I've never streamed a movie in my life, and I'm hard pressed to figure out why I would.

You kids and your shiny baubles. Get off my damned lawn.

Bandwidth limitations (2)

pubwvj (1045960) | about 5 months ago | (#46586393)

Not everyone has the high bandwidth connections. Streaming doesn't work in much of the USA and much of the world for that matter. There are many places where a DVD is much more convient to watch than to have the video streamed.

Another issue is that the streamed video from Amazon Prime for example does not include the extras like deleted scenes that are on DVDs.

more convenient (1)

nurb432 (527695) | about 5 months ago | (#46586395)

But streaming eats away at your bandwidth cap. Plus its harder to keep a copy for later ( or a portable device ) unless you can touch the disk with your grubby little hands.

Fail. (1)

Lumpy (12016) | about 5 months ago | (#46586399)

You have plenty of options. Buy it on itunes and download it.
Or buy the DVD and use handbrake to rip it.

Honestly, why is this even on slashdot? it belongs on a site with a Tech IQ that is very low, like Gizmodo.

Until recently a lot of BluRays came with a code to give you the movie as a download in itunes.

Streaming is more inconvenient (1)

Sir_Eptishous (873977) | about 5 months ago | (#46586405)

Inconvenient you say? Not for me...

I've been a NF user since they started(2004?) and have had a streaming plan with them since that was possible.
I can say unequivocally that their streaming performance has gone downhill to the point I'm considering cancelling and going back to the 3 DVD at a time plan.
I've called(yes you can do that...) NF several times to complain. I get the same excuses everytime, which boils down to "It's not our fault".
I've contacted my ISP who shows that I've got the latest/greatest DSL modem, etc and that speedtest and streaming others like Youtube all check out fine.

There is a problem with NF streaming.

Should I assume this has something to do with the recent ruling about Net Neutrality?
In my case the problem started about six months ago and has gotten worse in the last two, so it was before that.

So when I watch a DVD I don't have all the bullshit to put up with that I do with streaming. To me NF streaming is akin to the early days of telephone or telegraph.

And yes, I do TOTALLY blame the ISP, but I really have no way to prove it.

My other choice of ISP?
Comcast...(blech/blarg/belch/barf)

It's not the studio's choice (1)

Chris Dodd (1868704) | about 5 months ago | (#46586407)

> So what could be their reason for allowing users to check out physical DVDs but not to "check out" virtual DVDs in exactly the same way?

The answer is that they DON'T allow users to check out physical DVDs -- they would stop the the rental of DVDs if they could to force people to use their own distribution channels (and generate more profit). But the courts have said that if they sell DVDs, they can't prevent others from buying those DVDs and renting them out. So if they want to sell DVDs, they have to allow rental of DVDs.

It's not always about the greedy MPAA (0)

Anonymous Coward | about 5 months ago | (#46586409)

A fair portion of the country is rural. The fastest "broadband" available in my area is 1 Mbps DSL which is far too slow to stream video. I know it might be a shock to some, but not everyone lives in a big city with 50+ Mbps FIOS available.

Not a mystery at all (0)

Anonymous Coward | about 5 months ago | (#46586411)

The OP assumes some sort of utopian world where everyone has an always on, high-bandwidth/streaming friendly Internet connection.

The simple fact is that world doesn't exist, and the movie studios are simply acknowledging that reality and making their wares available accordingly.

Keeping DVDs alive helps them sell to people in sparsely settled and/or remote areas, where there is little or no high-speed connectivity (think. say, Nome, Alaska; or perhaps Hardin, MT), people who travel a lot and want to take movies along (everyone from frequent flyers to long-distance trucking teams where one person drives while the other relaxes in the back of the cab to ocean-going ship crews), people who want to have some creature comforts in their off-grid hunting cabin/survival shelter or people who simply want to OWN what they like instead of depending on what someone else decides to make available (try to find some indie or documentary titles on NetFlix) or people who don't want to put up with some of the BS from NetFlix and similar services (for example, only making certain episodes from show seasons available).

In short, there's plenty of reasons that the OPs vision of what the world should be like is a mirage; and ample justification for studios to keep issuing DVDs.

Streaming doesn't work. (1)

wb8nbs (174741) | about 5 months ago | (#46586413)

Streaming is completely useless on a DSL line. I copy my DVDs to an SD card. You can get a lot of video on a 32G card.

What exactly is inconvenient about a DVD or BR? (1)

ThisIsAnonymous (1146121) | about 5 months ago | (#46586417)

It MIGHT be inconvenient to have to drive to the store to purchase a disc but when discs are arriving in the mail, I don't see how this could be considered inconvenient. You seriously can't walk to your mailbox, walk to the DVD player and put the freaking disc in, and then walk back to your couch?

DVDs are convenient too (0)

Anonymous Coward | about 5 months ago | (#46586419)

You're missing part of the "convenience" argument when it comes to the DVDs. Sure, streaming is an incredibly convenient method of watching content, provided that you've already met certain requirements - like owning a device with the streaming service of your choice on it and having a fast enough internet connection to support streaming at an acceptable quality level.

The issue is that there are still a significant amount of people who haven't met those requirements, and for them, a DVD is still the more convenient option in some, if not all, cases. Plenty of people in the US still don't have broadband internet connections, so for them their only rental options are either through Netflix or through their cable provider's On Demand service. As you pointed out, Netflix is far cheaper once you cross a very low threshold of usage.

There are other people still who do have an adequate broadband connection and they may even have a device hooked up to their living room TV that will stream Netflix, but they prefer to watch movies at night on the TV in their bedroom, which doesn't have a streaming device hooked up to it. They'll find more convenience in a DVD in that case as well.

There are plenty of other examples where physical media is still preferred for some portion of the population, but the fact is that those numbers are declining rapidly as broadband coverage increases and as streaming devices become cheap/ubiquitous. This shift is happening quickly enough that it's not worth it for someone like Netflix to try and untangle all of the complexity of content rental (physical) vs. broadcast (streaming) with one of the hypothetical solutions you've outlined, because it'd just be a short term fix. Meanwhile, there are enough physical customers to make it worthwhile to continue servicing them for now.

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