Harvey & Bob & Blockbuster Sitting In A Tree

The Weinstein brothers (Harvey and Bob) - the producing force behind such big hits as "Shakespeare In Love ," "The English Patient," "Chicago" and "Cold Mountain" - have announced an exclusive partnership with Blockbuster, the DVD rental giant.

Under a new agreement announced yesterday, the full slate of The Weinstein Company's theatrical and direct-to-home-video titles will be offered for rent exclusively at Blockbuster, through both their brick and mortar stores and Blockbuster Online. (The deal applies to rentals only and not to sales of DVDs.)

Big Blue will have a three-year rental exclusivity on each Weinstein title; in exchange they will pay the studio a minimum guarantee, determined by box office performance, for each theatrical movie or based on the acquisition or production costs for each direct-to-DVD title.

This is clearly another aggressive move on Blockbuster's part to strengthen their online DVD rental operations as they continue their uphill battle for customers with Netflix. (The latter has over five and a half million online subscribers, while Blockbuster has about one and a half million.)

Blockbuster recently announced their Total Access program, which allows most online renters to return their DVDs to their local Blockbuster store and pick up another "free rental" at the same time, effectively doubling the number of DVDs that can be rented each month.

This new deal, which goes into effect January 1, 2007, means that if you want to rent any of The Weinstein Company's upcoming releases - "Bobby," starring Anthony Hopkins, Demi Moore, Sharon Stone, Elijah Wood and Lindsay Lohan; "School for Scoundrels," starring Billy Bob Thornton; "Grindhouse," the Robert Rodriguez/Quentin Tarantino double feature - you'll be able to do do so only at Blockbuster.

At least that's what Blockbuster wants us to believe.

It makes for a lovely press release, but I think what this really means is that the Brothers Weinstein won't make their new DVD releases available to other rental firms.

But there's nothing to stop a mom and pop video store (there are still quite a few left) from going down to their local Wal-Mart and picking up a few copies of "The Protector" or "Shut Up and Sing" (two forthcoming Weinstein titles) often for less than they'd pay through their distributors.

And Netflix will likely do the same (although probably not at the Los Gatos Wal-Mart).

Besides, most people just want to rent good movies; they don't care which studio releases the film and probably couldn't tell you the name of the studio if their life depended on it. Nobody says, "I can't wait to see that new film from Warner." They say " I can't wait to see 'Superman Returns.'"

You don't often hear people say how good "Fox" films are or that they can't wait to see the next "Lionsgate" release. What they say is they want to see "Saw III."

Studio monikers have very little resonance with the DVD-renting public (with the possible exception of Criterion, which is actually not a studio at all) and the only way Blockbuster can make this work for them is if they sign many other exclusive deals, so they can tout "only at Blockbuster" in their ads.

That is in fact the rumor on the street (that they'll get more studios to sign on exclusively), but I'm guessing the only major player that might agree to those terms would be their Viacom-owned former sister company, Paramount.

This strategy itself seems to be borrowed from another former sister company, Showtime, the premium network. Showtime has been engaged for years in a losing three-way battle for studio exclusivity with rival pay cable networks Starz and HBO. Each of those networks has exclusive deals with different studios, with HBO taking the lion's share.

But there's a big difference here: when a studio signs an exclusive pact with a cable network, no other cable network is licensed to show films from that studio. And they can't get those movies from any other source... the studio is the only supplier.

But there are many back channels and other distribution outlets where video stores - and yes, even Netflix - can acquire Weinstein Company titles to be used for rental purposes. 

So, this may be another truly brilliant idea from Blockbuster, which if executed years ago would have solidified their DVD rental dominance, but implemented now in the face of intense competition, may simply fizzle.