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Easy—thanks to the first sale doctrine, Netflix doesn’t need any deal to rent out DVDs. They can just buy the DVDs off the shelf and rent them out.

If renting out physical media were considered a right of the copyright holder under US law, you can bet that Netflix wouldn’t have been able to come to a deal on that either.

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I assume this is partly why it used to be that new movies went to rental first for a couple months before public sale. Because they’d charge the rental places a much higher cost per unit and they couldn’t just get them from the store.

Years ago there were a few companies[1] that tried a clever workaround for streaming broadcast TV. The scheme ultimately didn't hold up in the US, but I've always wondered what keeps Netflix from doing something similar with their physical discs. Controlled digital lending[2] isn't exactly settled terrain, but given their resources and increasingly precarious position you'd think Netflix would press the issue.

1. https://en.wikipedia.org/wiki/Aereo#Service and https://en.wikipedia.org/wiki/FilmOn#Legal_issues

2. https://en.wikipedia.org/wiki/Controlled_digital_lending

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