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Warner Bros. Pushing More Netflix Subscribers to Piracy

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Limiting the ways customers can enjoy your product will never build a greater profit.

It's absurd how many major corporations still don't heed this advice -- particularly movie studios. After decades of price-gouging and restrictions, the record industry had this lesson browbeaten into them until it finally allowed access to its catalogs to a wide variety of online streaming outlets. End result: We have a multitude of different ways to enjoy and discover music: iTunes (AAPL), Pandora (P), Amazon (AMZN), Google Music (GOOG), Spotify, Grooveshark,, etc.

But apparently, studios like Warner Bros. (TWX) fail to see that angering potential customers and restricting their rights will never increase profits.

Two years ago, Warner made its draconian presence known in the rental community by pulling DVDs and Blu-ray discs from Netflix (NFLX) until after the discs have been on sale for 28 days. The studio believed that if faced with waiting almost a month to watch Yes Man or buying it outright, customers would choose the latter. Other studios -- like Universal (CMCSA), Twentieth Century Fox (NWS), and Sony (SNE) -- agreed that it sounded like a pretty good deal.

Turns out, even a mighty studio like Warner couldn't stem customers' realization that they didn't need every marginally interesting title on their shelves.

So what's a megacorporation to do? That's right: Double the rental delay to 56 days for Netflix and Redbox (CSTR). After all, DVD sales continue to sink -- for some mysterious, unexplainable reason.

But even that wasn't enough for Warner, as it was just announced that it is now preventing Netflix customers from even adding Warner titles to their queue. Under the new agreement, Netflix users can no longer add a Warner Bros. movie to their queue until after 28 days have passed.

This is beyond preventing rentals. This is unbelievably oppressive. This is the music industry at the height of DRM. This is millions of customers pushed to the very limit.

Meanwhile, a quick search on one of the many BitTorrent search engines warrants plenty of secure, confirmed, high-quality, and -- most importantly -- unrestricted avenues to thousands of Warner Bros. titles.

So congratulations, Warner. You've just pushed even more people to choose the far easier option.

But look on the bright side: It's not like it's going to hurt your bottom line.

(See also: RIM CEO Backpedals on 'No Change Needed' Claims and iPhone Can't Match Android's Versatility, Says Steve Wozniak)

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POSITION:  No positions in stocks mentioned.