Warner Bros. to Implement 56-Day Delay on DVD Rentals

  @ibtimes on January 06 2012 4:54 PM
Netflix
Netflix shares are up about 40 percent since the beginning of 2012. REUTERS

Warner Bros. plans to impose a 56-day delay on DVD rentals, meaning customers will have to wait nearly two months after a movie is available for purchase.

The move by Warner Bros., a subsidiary of New York-based Time Warner, doubles the current 28-day delay on DVD rentals, which the Associated Press said was negotiated with Netflix two years ago. A source told the AP about the new rule since it won't be announced until next week.

According to the news report, Netflix, based in Los Gatos, Calif., agreed to the demands in order to continue receiving the DVD's at a reduced price.

Despite the news, Netflix shares rose 8.8 percent to close at $86.29. The shares are still far off their 52-week high of $304.79 before it announced its now infamous plan to separate its streaming and DVD-mail service. However, shares rebounded this week following the company's announcement that more than 20 million members streamed more than 2 billion hours of TV shows and movies in the fourth quarter of 2011.  

Redbox, a rival of Netflix, was also subject to the 28-day delay. Warner Bros. also asked Redbox to agree to the longer delay, but it hasn't been confirmed if a deal had been reached.

Shares of Time Warner closed at $36.55, down 0.7 percent.

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