CONSUMED BY MEDIA

Lionsgate confirms Redbox deal; studio divide over kiosk company very real

Posted in DVD, Redbox, rentals by Diane on August 11, 2009

redboxIn its earnings call today, Lionsgate confirmed it has indeed struck a deal with Redbox, as reported July 20 by the WSJ. That puts it in the same camp as Disney and Sony.

The studio scorecard now stands with two studios battling the kiosk company and three working with it. Last week, Fox asked distributors to stop selling its movies to the kiosk company until 30 days after each movie’s DVD release. Universal previously pressured distributors to stop selling discs until 45 days after release; Redbox promptly sued the company.

Time Warner could be next to move against Redbox: At that company’s earnings call, CEO Jeff Bewkes compared $1 rentals to $1 movie theaters, suggesting that movies should not be available for rent the same day as stores charging higher fees.

Studios are grappling with Redbox for a simple reason: DVD sales are way down, and rentals way up. Blu-ray has yet to make up the slack. Universal and Fox both apparently tried to get Redbox to sign revenue sharing deals but could not come to terms. Can they really win this game? I have my doubts, as I’ve outlined before, but I’m certainly no lawyer.

Key to studio deals with the company are provisos that Redbox not sell any used discs. That way, there will be further cheap product competing in the already depressed sales market.

This battle is far from over. Stay tuned.

Earlier: Studios are trying to withhold movies from Redbox. Is this wise?, How do you solve a problem like Redbox?Hello copy depth my old friendAre dollar rentals really so bad?

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