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Video Buyers Group: Redbox Workaround Not Working

10 Feb, 2010 By: Chris Tribbey

Speaking at a Midwestern Independent Video Retailer Association event Feb. 8, Ted Engen, president of the Video Buyers Group (VBG), which represents some 1,700 retailers, reportedly took several jabs at Redbox and the kiosk operator’s ability to stock new-release titles from Warner, Fox and Universal.

“I really believe there will be questions asked that they won’t be able to work around,” Engen said, referring to questions Redbox parent Coinstar will be asked Feb. 11 when it reports its fourth-quarter and full-year 2009 financial results.

Engen said that research done by his group found that limitations on new-release DVD sales to Redbox by retailers such as Wal-Mart and Target are keeping Warner, Fox and Universal DVDs out of as much as half of Redbox kiosks tracked by VBG, two weeks after street date.

Engen said VBG tracked 529 Redbox kiosks in 35 states online and in person, and found that as of Feb. 9, Warner Home Video’s Jan. 19 releases of Whiteout and The Invention of Lying were available in 19.6% and 44% of kiosks, respectively. 20th Century Fox Home Entertainment’s Feb. 2 release of Amelia was found in 13.2% of kiosks, while Universal Studios Home Entertainment’s Love Happens (Feb. 2) and Couples Retreat (Feb. 9) were found in 23.4% and 2.2% of kiosks, respectively.

By comparison, Sony Pictures Home Entertainment’s The Stepfather (Feb. 9) was found in 98.4% of kiosks on street date. Sony has a distribution deal with Redbox.

Redbox declined to comment on the VBG figures.

Redbox is fighting Warner, Universal and Fox in court over the studios’ withholding new release DVDs from the kiosk operator on street date.

Eric Wold, analyst with Merriman Curhan Ford, said the titles VBG singles out on Feb. 9 were low box office performers.

“Those were very low box office titles,” he said. “Whiteout did $10 million and Lying did $18 million. I would believe that Redbox wouldn’t even make an effort to get those in right away as consumers wouldn’t care. This coincides with our checks for low box office titles and I would hope Redbox would be doing this.”

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