Warner Brothers to Offer Online Rentals Alongside DVD Releases

A NYTimes blog reports that Jeff Bewkes, Time Warners chief executive, revealed that Warner Brothers will now release "on demand" videos (including iTunes rentals) on the same day as the DVD release. Historically, on-demand releases have tended to lag behind DVD releases by 30-45 days to avoid sales cannibalization.

When Steve Jobs announced the iTunes Rental store at Macworld this year, he acknowledged that the rentals would appear about 30 days after the DVD release. We later noticed, however, that some iTunes movie rentals had started appearing much earlier than the expected 30-day delay. As it turns out, Warner Brothers was experimenting with this approach for the last few months, and found that DVD rentals only fell by 3-5 percent while DVD sales actually increased when on-demand videos were offered earlier.

Mr. Bewkes boasted to investors that the shift from DVDs to digital distribution, on the "day and date" of DVD release, will be better for Warner Brothers because it will eliminate some of the costs of manufacturing and distributing discs.

This shift, of course, is good for customers who are given more flexibility in purchasing video content.