“John Carter” was one of the biggest film flops of all time. The special-effects-heavy sci-fi epic set on Mars turned out to be an epic box office failure in the U.S. for Disney, leading to a shakeup of company executives. Even as audiences largely ignored the film, “John Carter” finds itself at the center of a battle between Disney on one side and Netflix and Redbox on the other.
After a film’s box office days are done, two distinct forces try to make money from the production in different ways. Movie studios try to selling copies of the film, which reaps in the most profits. Rental outfits such as Netflix and Redbox make money when consumers don’t buy copies of the film, but view them on a borrowed basis (for a fee) instead. The two forces are in direct competition with each other, with quick, cheap, and easy rentals cutting into the sales business and vice versa.
A few years ago, Warner Brothers began waging a war on the rental outfits, by allowing them to rent movies starting four weeks after a movie was released for sale. Warner Bros. and Universal Studios eventually both came to agreements with Redbox and Netflix, and the result has been that if anyone wants to see one of these studios’ films before that 28-day period was up, he or she had to buy it. The strategy is an obvious ploy to boost flagging DVD sales. Something of a test in delayed gratification has arisen, in which the consumer has the choice of paying top dollar to watch (and own) a film right away or waiting four weeks (in some cases, more) to see the movie for as little as $1.20.
Now, Disney is entering the battle, starting with a movie that didn’t gain traction with theatergoers, but that could still wind up being a monster money-maker. “John Carter” may very well prove to be a high-profile curiosity among consumers—one that people wouldn’t pay $10 or $15 to see in theaters, but that is intriguing as a cheap one-time rental. Viewers want to see what all the fuss was about, but they probably don’t want to own the thing.
“John Carter” is the first major movie released on DVD that Disney is refusing to sell to Redbox or Netflix on the day it goes on sale to the public. Instead, Disney—which has yet to come to an agreement with Netflix and Redbox along the lines of Warner Bros. and Universal—has instituted its own 28-day rule, in which it’ll sell its movies to rental outfits only after four weeks of sales have passed.
As Bloomberg and the Los Angeles Times have reported, though, Redbox and Netflix aren’t playing along with the embargo. The rental operators have simply been buying copies of “John Carter”—which went on sale starting June 5, and is now priced at Walmart for $17.99—from retailers just like any consumer, and then renting them on to their customers. “John Carter” DVDs will be stocked at Redbox kiosks by June 12. Some Netflix customers have already received “John Carter” DVDs in the mail.
Enjoy the rentals while they last. It’s likely that Disney will soon come to some sort of agreement with the rental operators, and a rental delay of 28 days (or possibly more) will become official across the board. If and when that happens, the smart approach is to just wait it out and rent whenever that’s possible. If you didn’t want to pay $12 or so to see the movie when it came out in theaters, what makes you think it’s a good purchase at $18 or $20?