Once physical sales do start, however, Netflix can rent discs without permission, just as used bookstores don’t need a publisher’s say-so to operate.
That’s courtesy of a legal principle called the “first sale doctrine,” holding that a copyright holder’s control over a creative work’s distribution doesn’t extend to a particular purchased physical copy.
That doctrine doesn’t cover digital files “sold” subject to a terms-of-use license. So Netflix must negotiate with studios to stream their films — and studios still make more money from rentals and purchases than streaming via a subscription.
“The consumer price-per-view of a movie streamed 18 months after release is measured in cents, whereas the same film purchased as a recent release, on whatever format, is measured in dollars,” wrote Richard Cooper, an analyst with IHS Markit.
Neither analyst expects this to change, even as studios have begun experimenting with selling digital downloads a few weeks before DVD and Blu-ray sales start.
The result, for streaming viewers, can be a frustrating Venn diagram in which convenient, legal and comprehensive barely overlap.
“It’s kind of balkanized,” Goodman said. “I do this professionally, and I have to see who the studio is and cross-reference to see who they have an distribution agreement with.”
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