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This Movie Is Too Big for Amazon and Netflix

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Thanks to their respective deals with on-demand distributor Epix, both (Nasdaq: AMZN  ) and Netflix (Nasdaq: NFLX  ) will add Marvel's The Avengers to their catalogs after the DVD, Blu-ray, and digital download sales window closes for the film.

But that could be months, and audiences aren't eager to wait. The Avengers topped the DVD sales charts for the week ending Sept. 30, according to Nielsen's VideoScan First Alert. Time Warner's (NYSE: TWX  ) Batman: The Dark Knight Returns -- Part 1 took second while Universal's Snow White and the Huntsman took third.

What's surprising here isn't the sales data. Writer and director Joss Whedon's team-up tale resulted in a $1.5 billion box office haul for Marvel Studios parent Walt Disney (NYSE: DIS  ) . A flush aftermarket seemed all but inevitable, especially in light of how well Lions Gate's (NYSE: LGF  ) The Hunger Games has sold on DVD and Blu-ray.

What's interesting is that Blu-ray accounted for 72% of Avengers sales while 3-D, still mostly a failure at the regular cinema, managed to capture 23% of purchases. Audiences are willing to invest in premium home viewings.

Still, why the sudden interest in Blu-ray? My guess is the add-ons. Disney confined a heaping helping of deleted scenes and fanboy-specific featurettes to its most premium discs -- especially the four-disc special edition pictured below -- stiff-arming those of us who've refused to upgrade past DVD. It's brilliant, if also a bit frustrating.

Source: Marvel Entertainment.

And I do mean only a bit. As much as the fan in me wants immediate access to all the content that's locked up on the Blu-ray disc I can't play, the shareholder in me loves what Disney is doing here. Blu-ray is a highly profitable format with more than enough storage to include new and varied digital goodies with every special edition that comes to market, each one putting a little more profit in the House of Mouse's already-bulging pockets.

Hollywood wants to do the same with streaming but has yet to find its perfect dance partner. Netflix often gets mentioned in this role, but then headlines scream about alternatives such as Amazon's Prime and Redbox's new streaming efforts. Just this week an analyst downgraded the stock after another raised his price target to -- wait for it -- $120 a share. Who's right? To answer this question, one of our own star analysts has developed a premium report on whether Netflix is a buy right now, and why. Click here to get your copy instantly.


Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Netflix, Time Warner, and Walt Disney at the time of publication. He also had a long-term call options position in Netflix. Check out Tim's web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Netflix, Walt Disney, and Motley Fool newsletter services have recommended buying shares of, Netflix, and Walt Disney. Motley Fool newsletter services have recommended creating a bear put ladder position in Netflix. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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  • Report this Comment On October 11, 2012, at 1:57 PM, zm415 wrote:

    For a time, Amazon priced both the 3D Blu-ray & 2D Blu-ray sets at $19.99, possibly accounting for the greater percentage of people opting for 3D.

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