Sony bars Netflix 28-day access to some films

New release 'Karate Kid' is first movie to fall under restriction

Sony is sipping the 28-day Kool-Aid.

Sony Pictures Home Entertainment has refashioned its relationship with Netflix to deny the online-rentals company access to DVD titles for the first four weeks after "street date" but only on select titles. Sony execs won't discuss details of the policy, but it's likely similar to deals by some other studios and provides for a boosted number of unit shipments of affected titles once released to Netflix.

The first movie falling under the 28-day restriction is "The Karate Kid," which SPHE released through all other rental and sell-through retailers Tuesday. Dollar-rentals company Redbox is unaffected by the new Netflix policy and is being provided "Karate" under terms of Sony's current contract with the kiosk chain.

It's possible that Sony will expand its 28-day policy to all releases shipped to Netflix. But execs are committed to reviewing the market impact on select titles for an unspecified period of time.

The home entertainment units of Warner Bros., Universal and Fox already deny Netflix all new releases for their discs' first 28 days in the marketplace. Those studios also impose a 28-day window on Redbox.

Sony struck its distribution agreement with Redbox in July 2009, agreeing to provide day-and-day access to new releases in exchange for the kiosk chain agreeing to refrain from re-selling older Sony discs. SPHE titles tend to skew more heavily toward DVD rentals than those from some other studios, which were more concerned about dollar rentals' impact on DVD sales and thus imposed 28-day windows on Redbox.

When that deal was announced, execs said SPHE's arrangement with Redbox could be modified after an unspecified period of time. There are no plans to do so, but the studio's experimenting with a 28-day window for Netflix suggests at least the possibility that Sony could rethink its arrangement with Redbox down the road.

Separately, NCR's Blockbuster Express -- a rival dollar-rentals kiosk chain -- said it has struck a first-ever agreement with Universal Studios Home Entertainment providing the company DVD releases after a 28-day window. Blockbuster Express had been acquiring Universal titles via secondary channels.

The new pact also provides for the limited testing of day-and-date releasing of DVD titles at unspecified higher price points.

Redbox has been testing higher price points in select markets for several months.
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