"When Netflix or any other rental business buys DVDs, they don't just buy the same copy you and I do, but a rental version with different licensing terms which costs considerably more"
Here are before-and-after articles about the lawsuit from Video Business, the trade publication for the video rental industry:
http://www.videobusiness.com/article/CA6398859.html
http://www.videobusiness.com/article/CA6461951.html?q=nebg
NEBG, a retailers' association, sought to prevent Genius group, a distributor, from including an 800 pritned on the front of discs along with the message 'for sale only, call if you suspect piracy', arguaing that including this on DVDs would damage their members' businesses by implying criminal activity on their part. The case was dismissed since the labeling never took place, and so no harm had actually occurred. they were particularly annoyed because an exclusive rental distribution agreement existed between the distributor and Blockbuster, such that NEBG members had no way to obtain rental copies to offer to their customers.
They assert it is legal for them to do so under the first sale doctrine, but this has never actually been tested in court, so it would be more accurate to say it has not so far been forbidden. It is not established case law, and in this sense the Wikipedia article is incorrect.
If the studeios and distributors establish a 28 day sale window with Netflix's agreement, and if they make rental copies freely available to wholesale buyers, then there may well be a test case brought against anyone who sell consumer copies for rental, brought by both the distributors and very possibly Netflix themselves.
IANAL, but I am an industry professional, so that's my humble opinion.
I also know that redbox is buying retail dvds (http://www.latimes.com/business/la-fi-ct-redbox4-2009dec04,0...)
netflix used retail dvds for years. AFAIK netflix stil does for certain low volume titles.
Please see the copyright Act s109.b.1.A, which states (in part - software-specific verbiage removed): unless authorized by the owners of copyright in the sound recording ... neither the owner of a particular phonorecord ... may, for the purposes of direct or indirect commercial advantage, dispose of, or authorize the disposal of, the possession of that phonorecord ... by rental, lease, or lending, or by any other act or practice in the nature of rental, lease, or lending.
http://www.law.cornell.edu/uscode/17/usc_sec_17_00000109----...
I mean look, it's pretty clear that you can not rent audio recordings without permission (there's an exception for libraries). It's just not allowed. Now if the film industry's back is against the wall and they either make a case or lobby Congress to extend the same protection to movies, they can make two parallel arguments:
1. it's ridiculous and unfair that you should be able to prevent the rental of a movie's soundtrack on CD but not have the same control over the movie itself on DVD; and
2. while there is an explicit distinction between phonorecordgs and audiovisual works such as motion pictures (so that it can be argued the above simply does not apply), there exists a compulsory license for phonorecords - ie you can license a piece of published music for distribution whether or not the copyright holder wishes to sell it to you - hence all those awful compilation records - but there is no such right for motion pictures, and thus a distributor of same is perfectly at liberty to refuse to sell to someone, and impose contractual conditions to that effect, which is the path that Universal appears to be taking (See s.115 of the copyright act). In short you don't have an automatic right to be able to obtain a copy.
Incidentally, since you work for Netflix, and I presume your presence here means you're probably programming for them, the main complaint that I hear from distributors about Netflix is opacity - they really want better metrics, of the kind Apple supplies to their content providers. They like the checks but find it very hard to track the performance of the individual films they distribute, which in turn frustrates producers.
Yes. I write software for netflix.
Do you honestly believe that Apple has any choice as to how much data they provide? Do you think apple give detailed metrics because they're warm and kind business partners?
I'm pretty certain apple provides very detailed data because they sell digital ownership rights and PPV contracts. Their contracts/agreements with the distributors would mandate detailed reporting of each sale.
Netflix does not sell digital movie nor do they offer PPV.
Fine, but my point about the First Sale Doctrine stands - it is not the settled legal situation Wikipedia (and thus you) claim it to be, and I've shown why. You can take or leave my other opinions as you see fit.
Do you honestly believe that Apple has any choice as to how much data they provide? Do you think apple give detailed metrics because they're warm and kind business partners?
It's part of their offer, not a matter of compulsion. I'm just pointing out that distributors would love to have similar information from Netflix, so you could, you know, make more money by trading it for a small reduction in your wholesale costs.
Seriously, though: I've organized several dozen publicly-advertised movie screenings of movies (new release or not) and have had to pay anywhere from $50-500 for the rights to do so.
When you pay for such a thing (through Swank [1], for example) you get a box with a DVD and a piece of paper with a mailing slip and a license for showing the movie publicly on a certain date. The DVD has a different silk screen printed on it than a retail DVD and was sometimes even a different color (purple or yellow plastic instead of clear).