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Redbox to keep offering Paramount rentals on DVD release day

Written by James Delahunty (Google+) @ 17 Jun 2010 21:30 User comments (8)

Redbox to keep offering Paramount rentals on DVD release day Think back a few months to a fight that took place between Redbox and the major Hollywood studios. Hollywood execs were all hot and bothered about how Redbox kiosk's cheap $1 movie rentals were cannibalizing new DVD and Blu-ray sales, and decided to order their wholesale distributors not to sell to Redbox for a month or more after the initial release.
Redbox launched some legal action in response and decided to buy directly from retailers to stock kiosks as a workaround. However, that came crashing down for Redbox when Wal-Mart and other retailers imposed limits on the number of units of the same film a single customer can buy from them. Long story short, Redbox ended signing deals with Fox, Universal and Warner Bros. that required a 28-day window before Redbox kiosks could offer new titles for rental.

Paramount however decided to actually test whether or not the availability of new titles from rent from Redbox kiosks affects the sales of new DVD or Blu-ray releases. It signed a deal with Redbox in August 2009 which would allow it to stock new releases on the same day as the title comes out on Blu-ray and DVD. Redbox agreed at the time to share rental data with Paramount so that it could evaluate the potential benefits of a longer-term contract.

Following the 10-month analysis of DVD sell-through and renal performance, Paramount and Redbox announced on Tuesday that Paramount had extended its revenue sharing license agreement, providing Redbox access to Paramount DVD and Blu-ray titles to rent on the same day they are released in the sell-through market.

"After analyzing the data from our test period we have concluded that Redbox day-and-date rental activity has had minimal impact on our DVD sales," said Dennis Maguire, Worldwide President of Paramount Home Entertainment.

"By granting redbox day-and-date availability we are allowing the consumer a choice of how to consume our movies while maximizing the profitability of our releases in the home entertainment window. We are looking forward to continuing a productive and mutually beneficial relationship with Redbox."

"We are delighted to continue our relationship with Paramount to provide consumers with convenient, timely and affordable access to their favorite movies," said Mitch Lowe, President, Redbox. "We look forward to supporting Paramount movie releases through joint marketing programs. This arrangement is a win, win and win - for consumers, Paramount and Redbox."

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8 user comments

117.6.2010 23:44

Paramount is acting with logic? I think hell just froze over.

218.6.2010 0:18

Originally posted by KillerBug:
Paramount is acting with logic? I think hell just froze over.
I know seems like a miracle just happened, but at a little of their data they shoved to Redbox that they were able to do this. This seems however small, and Warner Bros. and the others need to follow suit, as Paramount COULD eventually gain the upper hand on this and they will be left behind.

318.6.2010 0:22

Originally posted by KillerBug:
Paramount is acting with logic? I think hell just froze over.
It's amazing what happens when you actually try things. I'm glad they did it for almost a year so they could actually gather a legitimate amount of data.

If anything it might increase sales for a movie because consumers can rent a movie for a night on the cheap and purchase it if they really enjoyed it.

418.6.2010 1:40

Following the 10-month analysis of DVD sell-through and renal performance
I think this spelling error was intentional :P

518.6.2010 11:58

Paramount just outed Fox, Universal and Warner Bros. on their bullsh*t. They just proved that Fox, Universal and Warner Bros. don't seriously think RedBox is hurting sales, only that they decided to put all their money on a dying horse (BlockBuster)

And only because BB offers them more profit. A rental at BB is $6, and a rental at RedBox is $1. So who do you think Fox, Universal and Warner Bros. makes more money from? Sadly, the greed model is failing and that's why BB is going under and RedBox is thriving. Thus showing studios are too stupid to jump on new media while the getting is good. And instead continue to cry piracy and redbox is killing them...rather than see the bigger picture. Greed is what is really killing them.

618.6.2010 20:12

to be honest with you guys, i was and still am surprised about how successful redbox has been since its original launch. I never thought rental DVD's found on a vending machine in your local grocery store would catch on so strong! I always go into the super market and see lines of atleast 3-4 ppl waiting to rent a dvd from these! And getting same day releases! Just wow!

718.6.2010 22:51

People are seems easy to rent a RedBox movie since it is right there where you are already doing something else. Find a way to let lazy people put less effort into being lazy, and you will make a fortune.

824.6.2010 12:39

Yes...I prefer to overcomplicate my life as much as possible and spend more time doing pointless sh1t for the sake of doing pointless sh1t.

Redbox is faster than making a special trip and walking around a rental store for a 30 min to an hour. The downside is mainly just the selection.

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