Warner could not get other studios to make Redbox wait over 28 days for new discs
San Francisco, CA -- (SBWIRE) -- 11/23/2012 -- After an unsuccessful attempt to persuade other studios to impose a longer delay on rentals of their new releases, Warner Bros. has agreed to let Redbox offer its new DVDs and Blu-ray releases for rental 28 days after their release, the same rental "window" most other major studios follow.
Warner Bros. had earlier sought industry-wide support for delaying rentals of new releases for almost two months. When that effort failed, the studio reached a compromise settlement with Redbox. That deal, which starts next year, will bring Warner Bros. releases to Redbox rental kiosks 28 days after their release for sale, although at a premium for early access.
In return, Redbox agreed to promote the Ultraviolet digital-download program. Backed by every major studio except Disney, Ultraviolet intends to incentivize consumers to buy movies to watch on internet-connected devices. Rather than just rent them, it provides storage space on the cloud for digital copies of movies. Warner has aggressively promoted the technology, and is expected to include Ultraviolet trailers on the discs it will furnish to Redbox.
Redbox also agreed to purchase large numbers of Warner Bros. movies for the video-on-demand program the rental company plans to start soon.
Warner Bros. has long been wary of the potential impact Redbox, which now has 38,500 outlets in Wal-Marts, food stores, and pharmacies, could have on its business. Concerned cheap rentals could hurt its more lucrative DVD sales and video-on-demand rentals, the studio in 2010 became the first to impose a 28-day rental window on Redbox and Netflix.
Believing that inexpensive rentals discourage consumers from more profitable DVD purchases or video-on-demand rentals, Warner was the first studio to require Redbox and Netflix to wait 28 days to rent its moves, beginning in 2010.
After that agreement expired earlier this year, Warner sought a 56-day delay. Although Netflix was willing to accept the longer window, Redbox refused. Warner then stopped sales to Redbox, which coped by buying Warner releases from other stores and other distributors.
Although Warner had worked to get other studios to back its demands for a 56-day window, Universal Pictures in April extended its 28-day deal. Early next year, 20th Century Fox is also likely to include no more than a 28-day window when it renews its expiring Redbox deal.
Redbox is still fighting with Disney, refusing that studio a 28-day window when it began demanding it this June. Redbox says Disney rentals should be available as soon as the product appears in stores. Unlike Warner Bros., the kiosk company says, Disney does not produce that many movies.
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