Netflix and Fox are announcing this morning an expanded content licensing agreement which creates a 28-day DVD window and gives Netflix streaming access to certain prior season Fox TV shows. The 28-day window, which delays Netflix access to new DVDs until 28 days after their release date is similar to a deal that Netflix struck with Warner Bros. earlier this year.
I continue to be a fan of the 28-day window, as it allows studios a little more time to eke further revenue out of the rapidly-declining DVD sales business, while expanding Netflix's catalog for streaming and reducing its cost on physical DVD purchases. Netflix's Watch Instantly streaming feature has been a game-changer for the company, essentially reinventing the company's value proposition from a DVD subscription business defined by the number of discs out at any time, to one where subscribers get unlimited digital use. The key to its success is building the library of titles for streaming and that's what these 28-day deals are all about.
Update: Universal also announced a 28-day deal with Netflix this morning. Release is here.
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