Waiting for "Avatar" to hit the Netflix queue? Hang in there. Today Netflix announced it had reached a deal that would delay the availability of new releases from Universal and Twentieth Century Fox – the studio behind "Avatar" – for at least a month after the official DVD release date. In exchange, Fox and Universal agreed to provide more movies and TV shows for Netflix's streaming video service.
"As the home entertainment market continues to evolve, we're exploring new and creative approaches to distribution with our key studio partners," Netflix exec Ted Sarandos said Friday. "Our intent is to forge agreements that make sense for the companies involved and that, on the whole, improve the consumer experience and the movie ecosystem."
The agreement, which mirrors a similar deal struck with Warner Bros. in January, is widely seen as an attempt by the major studios to bolster sagging DVD and Blu-ray sales. As Ben Fritz of the LA Times notes, "Fox, Universal and Warner Bros. have taken the lead in publicly lambasting DVD kiosk company Redbox, arguing that low-cost new-release rentals undercut the home entertainment business."
But the deal is extremely advantageous for Netflix, as well. In recent months, Netflix has begun to expand its streaming video operations, hinting that it open a streaming-only service in an as-yet-unnamed country, and offering streaming access on a handful of gaming platforms, including – most recently – the Nintendo Wii.
And don't forget about the Netflix app for the iPad. In that way, the agreement with Fox, Universal, and Warner Bros. makes sense – Netflix is betting that consumers will care more about the library of available titles, and less about getting their hands on the newest blockbuster as soon as it hits shelves. What do you think? Drop us a line in the comments section below.