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Sony, Redbox Extend Distribution Deal

1 Aug, 2012 By: Chris Tribbey

Redbox and Sony Pictures Home Entertainment’s distribution deal will continue through 2014, with the option for two one-year extensions at the studio’s discretion, the companies announced Aug. 1.

Sony, the first major studio to sign a distribution agreement with the disc-rental-kiosk operator, had the option of terminating the agreement. Instead, Redbox users will continue to see Sony DVDs on street date. The extension also gives Redbox access to Blu-ray Disc.

“On behalf of consumers, Redbox always looks to create win-win relationships with our studio partners,” said Redbox SVP Galen Smith. “We are happy to extend our relationship with Sony and continue to provide consumers day-and-date access to the biggest new release movies on DVD and Blu-ray Disc at an incredible value.”

Eric Wold, analyst with B. Riley & Co. in Los Angeles, said Sony has likely seen no adverse impact to sellthrough due to Redbox’s cheap rental option, and it’s a positive sign for Redbox that Sony didn’t go the route of Warner Home Video and seek a delay on new-release titles.

“The next major studio test for Redbox will come in April 2013 when the agreement with 20th Century Fox is scheduled to expire. Fox is currently on a 28-day delay,” Wold noted in a note to investors. “And while Warner Bros. chose to push for an increase to a 56-day delay, we believe the risk/reward is in Redbox’s favor and would expect no major changes to the terms — similar to what we saw with Universal earlier this year.”

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