Warner Bros. pacts with Lovefilm in U.K.

Deal opens up second pay TV window

Warner Bros. has struck a multi-year U.K. distribution deal with Lovefilm, Amazon’s subscription entertainment service, significantly changing the structure of home entertainment windows.

It stretches the window for DVD rental by post to 60 days after DVD retail and video-on-demand, from its existing 28 days.

This is part of a wider move by Warner to prioritize digital over physical distribution.

The deal also creates a second pay TV window, in which Lovefilm will be able to offer most of Warner’s recent and upcoming movies exclusively online following their first pay TV run on satcaster BSkyB.

This pushes back the existing free TV window. Movies available exclusively for viewing via Lovefilm’s online platform from December will include “The Dark Knight,” “The Hangover,” “Gran Torino” and “Sex and the City 2.”

The recent Harry Potter films are not included, because they have already been sold to free TV.

Sources say Warner decided to create this second pay window with Lovefilm because the U.K.’s national TV webs are buying fewer big packages from the studios, so Warner had not sold free TV rights to any of its recent movies apart from the Potter franchise.

Jeff Schlesinger, president of Warner Bros. Intl. TV Distribution, said, “The establishment of a second pay TV window with Lovefilm is an important evolution in the way films are made available for viewing in the U.K. in ever more convenient ways. Importantly, the structure of the deal ensures that our films continue to retain their value to linear and non-linear operators following this window.”

The studio is also launching a movie channel, Warner Film, exclusively on the Lovefilm platform to run alongside its existing Warner TV online service. This will focus on older catalog product.

Lovefilm, the U.K. equivalent of Netflix, is a subscription service offering DVD rental by post, online streaming, pay-per-view and download-to-own. It faces a challenge from Netflix, which will launch its own U.K. service in early 2012, and has recently announced deals with Miramax, MGM and Lionsgate. Lovefilm has exclusive deals with Studiocanal, eOne and now Warner.

Josh Berger, managing director of Warner U.K., Ireland and Spain, said, “This significant deal with Lovefilm and its parent company Amazon takes a 360 degree approach to delivering Warner Bros.’ world-class movies across multiple business lines.”