I’ve heard a lot of bad ideas during my time covering the entertainment industry for Hoover’s (”Hey, let’s merge AOL with Time Warner!”), but a recent business deal between The Weinstein Company and Blockbuster would definitely be near the top of the list. Weinstein Co., the film studio started last year by former Miramax head honchos Harvey and Bob Weinstein, has agreed to give video rental giant Blockbuster exclusive rental access to all the movies produced by their company. That’s right, for the next four years, you will only be able to rent upcoming films such as The Nanny Diaries and the Quentin Tarantino/Robert Rodriguez double feature Grindhouse, at Blockbuster and nowhere else.
First, let’s look at the financial ramifications. This is a great deal for Blockbuster, which will gain its exclusive access by paying Weinstein Co. a percentage of each rental based on the film’s box-office gross, in return for a three-year claim on the flick. It’s no secret that online rival Netflix and the sale of cheap DVDs by big box players like Best Buy have been eating Blockbuster’s lunch for years. The rental heavyweight has been bleeding money quarter after quarter lately, and the deal gives it rights to what will no doubt be popular and prestigious movies. Clearly, Blockbuster hopes that it can steal customers who can’t rent Weinstein films anywhere else.
As for Weinstein Co., not to mention movie lovers, this is a bad deal, plain and simple. I don’t understand why the Weinsteins would voluntarily chop the firm’s home video rental revenues in half by ignoring not just the very popular Netflix service, but also the other big rental chain Movie Gallery/Hollywood Entertainment. Call me kooky, but I always thought that in the movie business, you wanted to get your films out to as many people as possible, but maybe mass distribution has lost its luster. (It’ll be interesting to see if Blockbuster rivals attempt to get around the deal by buying their own copies of the films and renting them out anyway. Should that happen, well, that’s why big corporations put lawyers on retainer.)
I doubt this deal will help Blockbuster woo new customers on any sort of large scale. Some people already think the firm has been disingenuous with its rental policies, such as the recent “elimination” of late fees to answer Netflix. The firm did all it could to distract customers from the fine print, which stated that if you kept the film too long, you were automatically charged the purchase price for the DVD. Blockbuster also refuses to carry NC-17 movies or popular “Unrated” cuts of R-rated movies because they’re too racy. I’m an adult, thank you very much. Looks like I’ll be joining many others who will wait for cable to see the Weinstein output.
Lastly, I find it odd that the Weinstein brothers, famous for their groundbreaking track record and for bringing independent movies to the masses, would climb in bed with a company that’s helped run a lot of mom-and-pop video stores out of business.
I wonder what the Weinsteins’ own mom and pop, Miriam and Max, would have to say about that.
Comments
Michael Says:
December 12th, 2006 at 6:58 pm
I agree it seems odd that the indie-minded company would betray its roots, however - as a business decision - I think this is one heckuva deal for the Brothers Weinstein.
They benefit from enormous in-house promotion of their titles at Blockbuster (still the primary renter of DVDs in America) during both the theatrical and rental windows.
And mom and pop rental shops - and even Netflix and Movie Gallery - will likely buy Weinstein output through back channels (so they probably won’t suffer from diminished reach). Not sure what those “lawyers on retainer” can do about that.
Nothing, I suspect, as the Weinstein deal is with Blockbuster and no lawyer can prevent another video store from simply buying a DVD from Wal-Mart or Target or placing a large order through a home video distribution service. I doubt any of those firms signed a contract saying they wouldn’t rent Weinstein Company titles.
I think it’s a lousy deal for Blockbuster.
So what if they get a 3-year “exclusive” on Weinstein titles?
Most of the movies covered by this deal haven’t hit theaters yet, so it’s too soon to tell whether they’ll be successful movies with high commercial appeal. And, frankly, nobody cares what studio a movie came from… they just want to see good movies.
Most moviegoers and rental customers have very little awareness of the name “Weinstein,” let alone which movies the company has produced. So there’s no real “brand” to promote, other than the individual titles.
The only way for this to work for Blockbuster is if they sign additional exclusive deals so they can then tout “only at Blockbuster” in their ad campaigns for more than just a handful of titles.
BG Says:
December 14th, 2006 at 11:11 am
I hope the Weinsteins enjoy the short term benefit of this deal, because in the long term it will be a disaster. I guess they dont realize the negitive feelings some of consumers have about blockbuster and the ripping off of its customer for years. I will not ever step into, or log onto anything associated with Blockbuster. Netflix isnt perfect, but they have never tried to hide fees, or charge me anything extra.
Joe Says:
April 21st, 2007 at 1:13 am
I work with customers who rent movies and not at BB, they are very angry that they are basically being told if you want to see my movie you have to go to the Big B to get it and quite frankly, they won’t. So all in all it’s the customer who loses out on a great movie.
Joe
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