Sony Pictures weighs joining studio bandwagon on Netflix, delays starting with 'Karate Kid'
The studio has agreed to test the four-week "window" starting with last summer's remake of "The Karate Kid." The DVD went on sale Tuesday, but Netflix subscribers won't be able to get it until Nov. 2.
Sony previously hasn't favored withholding new DVDs from rental outlets. Unlike 20th Century Fox, Universal and Warner Bros., Sony signed a deal with kiosk company Redbox -- Netflix's largest competitor -- to rent movies the day they go on sale. Those three studios have also imposed a 28-day delay for all their DVDs on Netflix, which Sony hasn't previously done.
The Hollywood studios are grappling with when and at what price to offer DVDs for rental as they try to keep revenue from home entertainment -- the largest segment of their business -- from declining further.
Netflix has been willing to accept a delay on new DVDs in exchange for lower wholesale prices and greater availability of films for Internet streaming. Sony is likely examining whether an increase in revenue from sales and other types of rental will outweigh the lower prices it can charge Netflix for month-old DVDs
People familiar with the matter said "Karate Kid" is the first of several movies that Sony will offer 28 days after they go on sale as part of a test with Netflix. The names of the other pictures were not available.
"The Karate Kid" could make for a good test, as the PG-rated film was a huge hit, raking in $177 million at the domestic box office. Successful family movies are typically among the bestselling DVDs, even in the current market where total purchases have been declining.
"Warner Bros. has been very happy with the results in DVD sales and video-on-demand transactions from its window," said Netflix chief content officer Ted Sarandos. "It's hard for me to imagine that would not be true across all studios."
-- Ben Fritz
Photo: Jackie Chan and Jaden Smith in "The Karate Kid." Credit: Jasin Boland / Columbia Pictures