The “Twenty-Eight Day Rule”: The Netflix and Warner Agreement

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The twenty-eight day rule is an agreement between Netflix and Warner that prevents Netflix from renting any new-to-DVD movie from Warner until twenty-eight days after its release to DVD.

The movie studios are reeling financially and, like all media outlets, are looking for new ways to generate, or simply maintain, revenue. Even though last year was a record setting year for movie theater revenue, the reason for the revenue uptick was higher ticket prices; attendance in the theater actually declined.

The movie studios depend on DVD sales to help generate revenue, but the numbers show that DVD sales are declining, as well – more people are opting to rent movies digitally.

So, the twenty-eight day rule is a desperate attempt by Warner to maintain a DVD revenue stream.

In return for the twenty-eight day rule, Netflix was able to flesh out its streaming video library with more, older Warner titles.

The other thing here is that other Internet movie rental businesses (Apple, Blockbuster, etc) have not agreed to the twenty-eight day rule.

Personally, I could care less about waiting an extra month to see a movie, and I don’t collect DVDs either. So, this is not a big deal to me. Actually, having access to more Warner titles streaming via Netflix works in my favor.

What’s obvious with this scenario is that you have a company, Warner, who is trying to restrict access to content in the hopes it can hold onto a revenue generating channel that is dying. There is no creativity here. It’s a panic attempt to stay afloat.

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