Sony, Redbox Update Agreement

1 Sep, 2011 By: Chris Tribbey

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Sony Pictures Home Entertainment has updated its agreement with Redbox Aug. 29, keeping the studio’s DVDs and Blu-ray Discs in the kiosks through Sept. 30, 2014.

Sony Pictures would be able to opt out of the agreement Sept. 30, 2012.

In a filing with the Securities and Exchange Commission, Redbox parent Coinstar said the updated arrangement would add earnings per share between 5 cents and 7 cents for the third quarter ending Sept. 30.

Eric Wold, research director with Merriman Capital in San Francisco, said the decision by Sony to continue giving its DVDs to Redbox on street date shows the studio “did not see a benefit to move to a delayed availability model.” 20th Century Fox Home Entertainment, Universal Studios Home Entertainment and Warner Home Video delay their titles to Redbox for 28 days after street date.

“One positive, subtle change is that Sony is now allowing Redbox to keep their DVDs in the kiosks for a maximum of 52 weeks from street date vs. 26 weeks previously (when they have to be destroyed),” Wold wrote in a note to investors. “Not only does this give Redbox more flexibility to monetize successful titles or bring back older titles (if a good match with current content or to fill weak periods), but we believe this clearly shows that Sony sees the positive benefits of the Redbox channel and it not being cannibalistic to other video options."

 

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