Did Fox and Universal Make a Bad Bet with Netflix?

Netflix has just signed an agreement with Fox and Universal that will give it the right to stream more Fox and Universal movies online and to have cheaper DVDs. But there is a catch: Netflix will have to wait 28 days before renting out new releases. So that means if a movie is released on the first of the month, you will have to wait until the 28th day of the month to get it.

Now what does this mean for you, the consumer? Quite a few things:

1. If you are a Netflix subscriber, you will be able to stream more movies online, which can be a great thing if you happen to be part of the small minority of people who happen to do do that on a regular basis.

2. If you are a Netflix subscriber and you want to see the latest movie released by Fox or Universal, you will have four options:

a) Wait 28 days and rent it when it becomes available on Netflix. Perfect for patient folks.
b) Go out and buy the DVD as soon as it is available. Perfect for those who have no problem with spending money.
c) Go to a Blockbuster store and rent it there. Perfect if you manage to find one that is still open these days.
d) see point #1.

Now I understand Fox and Universal are trying to make more money but I think that they are making a horrible miscalculation. They think that by preventing folks from renting the DVDs from Netflix, people will go and buy the DVD or at least rent it from a brick and mortar DVD store. They forgot one important thing: people have other entertainment options.

Consumers have TV, the Internet, iTunes, Hulu, Youtube, Facebook and even Chat Roulette to occupy their time. Thinking that people won’t find something else to do than go buy a DVD when it comes out is a sucka’s bet.

What do you think of this news? Do you think that Fox and Universal made a bad bet with Netflix? Share your thoughts in the comment section below.