Disney, Redbox Reach New Terms16 Feb, 2011 By: Chris Tribbey
Redbox president Mitch Lowe confirmed Feb. 16 that the kiosk operator and Walt Disney Studios Home Entertainment have updated their agreement for new-release DVDs.
“We did recently update our agreement with Disney, and continue to maintain a strong relationship with the studio,” he said. “Each of our studio partnerships is unique. Disney has been a consistent partner since day one and we are proud to feature Disney titles day-and-date at our more than 26,000 locations nationwide.”
Lowe would not divulge financial terms of the new agreement; however the Los Angeles Times reported Disney raised the wholesale prices on new-release titles for both Redbox and Netflix, charging as much as $17.99 per title.
Citing anonymous sources, the paper reported the higher charge began with the Jan. 25 release of Secretariat. The wholesale price drops 28 days after street date to under $11, according to the report.
Disney did not immediately return requests for comment. A Netflix spokesman said the company would not comment on its studio deals.
Secretariat debuted at No. 17 on Redbox’s rental chart its first week in kiosks, but was No. 2 at brick-and-mortar stores according to Home Media Magazine research, a result that suggests Redbox did not stock as many copies of Secretariat as other in-demand new releases. A similar pattern emerged during the title’s second and third weeks as well.
On the other hand, the Feb. 8 release of Disney’s You Again was No. 3 at Redbox its first week, though only at No. 7 on Blockbuster’s rental chart, indicating it performed better at kiosks than at brick-and-mortar stores.
At a Feb. 16 investors event, Paul Davis, CEO of Redbox parent company Coinstar, said Redbox’s relationship with the studios is mislabeled as “hostile,” but left open the possibility that Redbox could return to a workaround program should any of the agreements with studios sour. Redbox at one point had teams of employees buying titles at retailers such as Walmart, to ensure they were available in kiosks.
“We want to keep the dialogue open,” Davis said. “What’s good for you, what’s good for us.”
Universal Studios Home Entertainment, 20th Century Fox Home Entertainment and Warner Home Video all have agreements in place with Redbox that keep new-release DVDs out of the kiosks for 28 days after street date. Sony Pictures Home Entertainment, Paramount Home Entertainment and Lionsgate all have agreements with Redbox that allow new-release titles in kiosks on street date under various terms.
John Latchem contributed to this report.