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Sony, Netflix Make Pact on 28-Day Release Window

Deal kicks off with “Karate Kid” and will take place on a picture-by-picture basis

Like Warner Bros., Universal, and Fox before it, Sony is getting into the release-window game with Netflix.

The studio will experiment with 28-day delays on new releases it allows the subscription giant to rent.

In the past, Sony has allowed rental companies like Netflix and Redbox to rent its movies on the same day they hit store shelves.

The new pact only became apparent with this week's DVD and Blu-ray release of Sony's "The Karate Kid," but a deal was reached weeks ago, Netflix spokesperson Steve Swasey told TheWrap. "Karate Kid" will not be available for rental through Netflix until Nov. 2.

The arrangement will not impact all Sony releases. Instead, the studio will pick and choose which films will be delayed, an individual with knowledge of the deal told TheWrap.

Swasey would not discuss the terms of the deal, and a Sony spokesperson declined to comment.

In exchange for agreeing to honor the release window for other studios, Netflix has received rights to stream more of their catalogue titles. Netflix also pays less for the films it streams and for the new releases it rents after the 28-day window has closed.

It is not clear if similar terms were part of the deal with Sony and if streaming rights are involved.

That points to the major difference between the agreement with Sony and the rental company's previous release window pacts — the decision to maintain a veil of secrecy over the proceedings. In its dealings with Warner Bros, Universal and Fox, Netflix issued a press release outlining the salient parts of the arrangement instead of simply letting its customers discover the delay for themselves.

Studios have been experimenting with release windows as a way to prop up DVD sales. The logic being that making films available later prevents cheaper video rental companies from cannibalizing profits from disc sales.