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Warner to Offer Kiosks Titles on 28-Day Delay

13 Aug, 2009 By: Erik Gruenwedel

Warner Home Video Aug. 13 informed its wholesalers that beginning in October it will change its terms with rental kiosks and mail-order subscription services.

Rental kiosks will get new release titles 28 days after street date. Mail-order subscription services will also have a day-and-date revenue-sharing option.

Additionally, the studio said it would engage solely in direct relationships with kiosk and mail-order subscription vendors.

“Warner will be in discussions with both kiosk and mail-order subscription vendors, offering business options that will allow all parties to grow their respective businesses,” the studio said in a statement.

Warner also has revised its wholesaler terms to prohibit the purchase and sale of WHV previously viewed product.

Sources question whether the new terms will affect Warner’s arrangement with rent-by-mail leader Netflix. A comment from Netflix seems to indicate it may.

Ken Ross, VP of corporate communications for Netflix, said the company has had a relationship with Warner Home Video for a decade, buying directly from the studio, and not its wholesalers, under a series of agreements.

“We'll evaluate the current proposal, and we’ll discuss it with the studio as we've always done,” he said.

The studios have been split in their treatment of the growing kiosk business, some imposing windows and other making deals. Leading kiosk operator Redbox this week filed suit against 20th Century Fox Home Entertainment over the studio’s decision to impose a 30-day delay on making its new DVD releases available to the rental kiosk company, becoming the second studio targeted by the kiosk company in a lawsuit. Universal Studios Home Entertainment last year was sued after withholding its new DVD releases from Redbox for 45 days. On the other side of the studio spectrum, Sony Pictures Home Entertainment last month and Lionsgate this week entered into multiyear deals with Redbox.

“Redbox was informed today that Warner Brothers will take action to limit our consumers’ timely access to new release DVDs,” said Redbox president Mitch Lowe. “Redbox will continue to stand behind our customers and our commitment to providing convenient, affordable access to new release DVDs from all studios including Warner Brothers.”

Lowe made no comment regarding potential litigation against Warner.

Chuck Berger, chairman and CEO of kiosk company DVDPlay, said the studios are standing in the way of a "tsunami of technology."

“The consumer has made a very clear choice for convenience, and the ability to rent a DVD from locations they visit several times a week, for an affordable price,” he said. “All these actions by the studios seem reminiscent of their decade-long resistance to the Internet as a legitimate distribution channel.

“We and Redbox and NCR (which provides technology for TNR, MovieCube and Blockbuster kiosks) will adapt to this as we already have with Universal. They're not keeping titles out of the kiosks.”



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