Redbox and Warner Agree To 28 Day Window

[supera]

    Warner Bros. Home Entertainment and Redbox Announce a Multi-year Distribution Agreement

    Companies Agree to 28-Day Window for DVD and Blu-ray Titles

    BURBANK, Calif. And OAKBROOK TERRACE, Ill, February 16, 2010 – Warner Bros. Home Entertainment Group and redbox today announced a new multi-year distribution agreement that will make Warner Bros. new release DVD and Blu-ray titles available to redbox customers after a 28-day window. The agreement also marks the end of the lawsuit that redbox filed against Warner Home Video in August 2009.
    “We are very pleased to have had the opportunity to sit down with redbox and negotiate an arrangement that benefits both parties and allows us to continue making our films available to redbox customers,” said Kevin Tsujihara, president, Warner Bros. Home Entertainment Group. “The 28-day window enables us to get the most from the sales potential of our titles and maximize VOD usage.”

    The new arrangement provides redbox with reduced product costs, sufficient quantities of product and optimal stock levels four weeks after street date as well as extends redbox’s access to Blu-ray titles, which redbox is currently testing in select markets. The agreement also provides Warner Bros. the opportunity to maximize the sales of new release titles as well as video on demand and other forms of digital distribution.

    “This agreement enables redbox to fulfill our commitment to providing consumers affordable and convenient home entertainment,” said Mitch Lowe, president, redbox. “By agreeing to a delayed release date, redbox can now acquire Warner Home Video titles at a reduced product cost, preserving value for our consumers and increasing customer access to Warner titles at redbox locations nationwide.”
    Warner Home Video and redbox will be implementing delayed availability during the month of March and will reach a four-week window by March 23 with the release of The Blind Side. The new agreement will run through January 31, 2012. Redbox has also agreed to destroy Warner Home Video content following its lifespan in kiosks.

    “The 28-day window for redbox balances the economics of our relationship while continuing to offer great value to their customers,” said Ron Sanders, president, Warner Home Video. “This accord establishes a mutually beneficial relationship that will foster an ongoing and productive partnership.”

    Warner Bros. is currently a leader in many home video categories including total video (DVD and Blu-ray combined), Theatrical Catalog video, TV on DVD, and Blu-ray and will ensure the DVD rental company access to sufficient quantities of Warner Home Video titles including The Time Traveler’s Wife, The Box, The Informant!, Where the Wild Things Are, The Blind Side, and Sherlock Holmes.

[twinvid]

One has to wonder if we are somehow going to get screwed in this deal some where.

Bob

[mcmarc]

When you see them leave Blockbuster's shelves, we're next.  Or the other way around...

[twinvid]

Marc

Not sure I follow your comment? Maybe I am being a little slow today!

What about Blockbuster's Kiosks???

Bob

[genx-mike]

I suspect you will see sellthru only SKUs hitting the distributors shortly with rental SKUs appearing 28 days later.

If anyone still has Warner on Rentrak, it is likely time to get out of that deal. Indies will be shopping at Wal-Mart and Best Buy exclusively soon for Warner product.

Hopefully this will just be Warner and the other studios won't follow suit.

Could be a blessing in disguise. If Indies are the only rental locations with Warner titles for the first 28 days that is a real advantage even if you have to do a workaround to get them.

[moviecritic202]

warner has already stop rev share with rentrak for titles coming out in march.  Also if you get Warner stuff from a regular distributor all that is available is the stripped down rental version, although they do give us a $1 discount.  Whipty-freaking-do.

[twinvid]

You know with redbox having to destroy Warner product I am ok with buying a rental version. I think most customers don't watch the special features and without all the redbox product flooding the used market I think we will be able to sell off the pre-viewed rental version.

I did not have a single customer complain about renting a rental version of Taken. The biggest problem was selling used vs used full versions.

Bob

[moviesgamesetc]

I'm really surprised Redbox caved on this. I wonder what the benefit to them really is on the backside. If Warner is flexing it's muscles this much, I say, "Watch out First Sale Doctrine, Warner will be gunning for you next!"

[moviecritic202]

It's not the fact that stuff from Warner is stripped down, it's that big buble on the case that says RENTAL.  No one noticed it on Fox titles because it is small and barely noticable, with Warner you can't miss it!

[rufusjack]

I always assume that companies operate out of their best interests of their companies just like we do.  UNLESS they have shown clear poor decision-making before.

In order for this to be a good deal for Redbox, any of the following probably happened:  1) A signiificant reduction in cost from WB on their product, 2) They have had 3 mos or so of data on limited supply of product in most machines and no supply of certain titles is some machines.  These machines probably showed minimal impact on top-line revenues.  3) Became too costly for the work arounds (which we know was true as they commented in their conference call).

I would not see this as a necessarily good thing at this point for us IVRs.  I am more than willing to see global 28 day window from the studios as due to the First Sale Doctrine.  WM this week had movies priced at $15 as a regular price: Woman In Trouble, Black Dynamite,   Good hair, & Cabin fever 2.  All of those were much cheaper than distributiom.

[wannabevideostoreowner]

If things made sense in the world, Warner could revshare and accept back product from videostores like Blockbuster after a few weeks (for maybe a little less than stores usually see for previewed titles), and use the product to supply Redbox, Netflix and other companies it could make these later arrangements with.

Then videostores wouldn't have to try to unload the used product and would have guaranteed buyback. Plus Warner wouldn't have to be so concerned about supply of used product flooding the market from those stores. They would also have the deals in place with videostores AND Netflix AND Redbox allowing them a revenue stream from each...

Seems like a smarter plan then stores destroying product... ugh...

[moviesgamesetc]

Good idea, Wanna. Which is why Warner would probably never consider it. It would benefit too many people, especially us.

[tiptoen]

The next step may be that they impose the same restrictions on the brick and mortar stores. If so that would kill that plan. We may be seeing this already with the "rental" pricing.
If it happens I'll be going to Wal-Mart, Target, and Best Buy on Tuesdays.

 

[moviecritic202]

As someone has said b4, if a sale only window is created the chain will hurt but we'll be able to work around it.  I don't like the thought of a sales only window but I won't hesitate to make it work to my advantage.