Analyst: Redbox Improves Workaround For Fox, Warner Titles

16 Nov, 2009 By: Chris Tribbey

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Two weeks after finding Ice Age: Dawn of the Dinosaurs stocked in just more than two-thirds of Redbox kiosks, financial services firm Merriman Curhan Ford checked the same 50-plus kiosks in 17 cities Nov. 14 and found the 20th Century Fox Home Entertainment DVD stocked in 94% of machines.

“With that movie still in the top six rentals for the past week, we are encouraged by the incremental gains in stocking the title with the company’s workaround program,” said Merriman analyst Eric Wold. He was referring to Redbox’s workaround program for Fox and Warner Home Video new releases. Those two studios are keeping their wholesalers from selling to the rental kiosk operator, forcing Redbox to buy the DVDs at retail.

Redbox will have more big fourth-quarter titles to stock via retail purchases, including Warner’s Terminator: Salvation, The Hangover and Harry Potter and the Half-Blood Prince; Fox’s Night at the Museum: Battle of the Smithsonian; and Universal Studios Home Entertainment’s Public Enemies.

Wold also noted that while reporting positive second quarter results Nov. 9, Lionsgate said that its first major release (Crank 2: High Voltage; Sept. 8) since formalizing a distribution agreement with Redbox in August “did not display any evidence of cannibalization through any channel” and may have even driven consumers to buy after they rented.

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