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After spending millions on ads, Blockbuster loses 28 day advantage


Blockbuster may have declared bankruptcy, but that hasn’t stopped it from running an ad campaign touting its last known advantage: it gets DVD/Blu-ray releases 28 days before Netflix and Redbox. Well, not anymore. Its rental kiosk vendor NCR has signed deals with Warner Bros., Fox, and Universal to delay new movie releases by 28 days, putting Blockbuster’s kiosks in the same boat as Netflix and Redbox. NCR said delaying releases will save the company money.

Fast Company dug up some quotes and found that Blockbuster’s 28-day advantage may only exist because it is locked into expensive contracts with studios. “Blockbuster didn’t stay with new releases by choice,” said a source familiar with the studio agreements with Netflix and Blockbuster. “Movie studios have Blockbuster where they want them–they know Blockbuster is not in any position to negotiate because of their financial position. The studios are getting huge payments for new releases from Blockbuster because they know the company needs them.”

In fact, Steve Swasey, VP of corporate communications at Netflix, said the 28 day delay has helped the streaming company immensely by saving it millions. “We actually went proactively to the studios several years ago because the 28-day model is really good for us–we recommended it,” said Swasey. “We’re even talking to other studios about it.”

A Blockbuster “Why wait?” commercial is embedded below. The commercial is a few months old, but Blockbuster continues to run the campaign in other mediums. One wonders how much this campaign has increased rentals at the struggling chain. We wouldn’t wait 28 days for a flight, but Blockbuster is still waiting more than three months for movies to leave theaters and hit DVD. What does an extra 28 days matter?

Update 12/23/2010: Made minor changes for clarity, including noting that the commercial, while part of a continuing campaign, is several months old.

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