Log in

Video Buyers Group: Redbox ‘Work-Around’ Not Working

2 Dec, 2009 By: Erik Gruenwedel

Despite public pronouncements to the contrary, Redbox’s ability to stock new-release DVD movies from three major Hollywood studios is not working, according to the Video Buyers Group (VBG).

In a Dec. 2 memo sent by Ted Engen, president of the Minneapolis-based trade group representing about 1,200 independent video retailers, he states that physical and electronic monitoring of more than 500 kiosks in 25 states over the past three weeks revealed significant shortages of new releases from Warner Home Video, 20th Century Fox Home Entertainment and Universal Studios Home Entertainment.

The three studios have imposed embargos from 28 days to 30 days on new releases to Redbox and other kiosk vendors. Redbox, in response, has attempted to acquire embargoed titles for rental (as allowed by the First Sale Doctrine) through third-party retail channels.

Indeed, Dec. 1 releases Terminator: Salvation and Night at the Museum: Battle of the Smithsonian were available in just 2.4% of kiosks monitored. Four Christmases and Funny People were found in 21.2% and 14.7% of kiosks, respectively, eight days after release.

Other titles such as Bruno and My Sister’s Keeper were available 31.6% and 15.5%, respectively, in monitored kiosks, according to the VBG.

Notable exception was Sony Pictures Home Entertainment’s Angels & Demons, which was found in 83.1% of kiosks six days after release. Sony, of course, has a direct distribution deal with Redbox.

As reported Dec. 1, Redbox is alleging that representatives attempting to purchase new releases from the aforementioned studios at Wal-Mart, Target and Best Buy have been limited to three copies.

VBG’s Engen said Redbox shouldn’t be surprised big box retailers have allegedly imposed limits on the number of discs per title purchased.

“They blame this on the studios, but common sense tells us when retailers are using these titles as a loss leader they don’t want to watch hundreds of copies of Night at the Museum walk out the door and take a loss on all of them,” Engen wrote.

Add Comment