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According to one analyst, a 30-day block on new release titles could cost the Redbox up to 50% of its revenue. Pali Capital analyst Richard Greenfield, who along with half of Hollywood is bearish on the company’s $1 business model, believes that if Redbox were to yield to mounting pressure and accept a delayed rental window on new releases, the impact to the company’s revenue would be much higher than the 10% Redbox claims. Says Greenfield:

“Redbox relies on the new-release business, if it did not, it would not be suing three studios . . . We suspect the impact is closer to 35% to 50%.”

According to Greenfield, “Redbox’s business model devalues home entertainment to near penny status and makes alternative distribution formats such as DVD/Blu-ray sellthrough, in-store and subscription rental, video-on-demand, and even theatrical appear overpriced.” Greenfield thinks that more retailers should impose quantity limits on Redbox similar to those recently put in place by Walmart and Target.

Greenfield also believes that consumers will soon become tired of the lack of new releases in Redbox kiosks and take their money elsewhere. According to Greenfield:

“If titles 1, 2, and 3 are not available after a few trips to a Redbox, and [consumers] are exposed to commercials on TV for VOD and on the Internet (streaming), we believe their perception of Redbox will change,”

Insiders, what do you make of Greenfield’s comments? Does he have a point, or will Redbox be able to overcome supply issues and prove him wrong? Tell us where you stand in the comments.

(via Home Media Magazine)

33 Responses to “Analyst: Delayed Release Window Could have Massive Impact on Redbox Revenue”

  1. Visitor [Join Now]
    Vernon Dent [visitor]

    Where’s the first-sale doctrine when needed? Why won’t redbox just continue to purchase titles from retail channels? So much for the “30-day block”!

    Either way, redbox WILL be adversely effected.

    • Visitor [Join Now]
      James [visitor]

      I notice on those hollywood three movies have a week delay in the redbox kiosks… 9 times out of 10 if redbox dont have those hollywood three movies, then I gaurentee you that blockbuster express kisok will…. These Three Hollywood movie studio are coming down hard on a $1 nite rental, then they need to check Block Buster, Hollywood Video, and Family Video cause thier rental prices for the 5 day rental window they allow breaks down to be $1 also….. Tell the hollywood three to slim down cost elseware, or have redbox raise thier price $1 more? Business are greaty they want more and more, and give litte in return….

  2. Visitor [Join Now]
    James [visitor]

    Then go to BlockBuster Express Kiosk.. If redbox dont have it, BlockBuster Express Will!

  3. Visitor [Join Now]
    cc [visitor]

    To me, the definition of “new release” is when I can rent it for 1 dollor. When I can rent it for $1 or less, that’s the new release for me. Paying more than $1 is too risky considering so many bad movies out there that can waste your 2 hours of family time. I’m not budging because I have been renting this way for the past 20 year. All rentals will eventually come down to $1 or less. If they don’t, I’m willing to get on the waiting list in my public library.

    • Visitor [Join Now]
      Steven [visitor]

      I am with you I will gladly wait a month 3 months 3 years whatever it will be new when I see it no matter how long I have to wait there is rush to see it the first day its on the market thats why I don’t go to the movies $9 a person times 4 people plus refreshments equals $50 I dont think so I’ll wait and spend $5 for a redbox and my own snacks and if redbox goes under and I cant get $1 rentals well then I guess I wont bother watching movies anymore

  4. Visitor [Join Now]
    heather [visitor]

    I think redbox needs to keep putting out new releases. I love redbox but it gets a little annoying when none of the local redboxes has anything new in them.

  5. Visitor [Join Now]
    rb [visitor]

    Gosh, there’s that repetitive, memorized thought again– that Redbox low rental price “devalues” home entertainment. I think Redbox should do a survey with it’s email/text customers to know, once and for all, if its customers prefer to pay $2 for a new release on day one, or have Redbox go along with the 28 day delay on new releases and keep all rentals at $1. It doesn’t take a genius to figure out that Redbox won’t be able to keep its low $1 rental price when/if it has to get the new releases on day one from retail sources. I say, let the customers decide. Also, how much does Blockbuster Express charge for their new release rentals if they have them on day one? If they only charge $1, how can that be?

    • Visitor [Join Now]
      James [visitor]

      From What I got told is blockbuster express can put all new famous releases out in thier blockbuster express Kisoks for a $1 because they are Making money for them, the stockholders, and the studios because they have Stores, Online rentals “like netflix”, and Direct access, and also thier Kisoks so “They Say everyone” is making money… They said since redbox only has kiosk the studios aint making money… If I cant get a movie to rent from Redbox I got to the next best thing, or the next cheapest thing.

    • Member [Join Now]
      ChadCronin [chadcronin]

      Finally I agree as well. I am so sick of Redbox taking all the heat for all the industries problems. Blockbuster and Netflix have their own rentals that can work out to $1 a day or less, but I am over arguing about pricing. I now finally say “Fine” for those greedy studios who think higher pricing is gonna solve their problems then sign agreements for $2 the first 30 days then goes down to $1 and for non-greedy companies continue to keep it $1 day one and we will see which studios are “hurt” more. Not everything needs to be uniform between companies. Just like a previous article stated that Lionsgate was not hurt by their deal, I think it would be nice to see more articles in the future based on other companies deals. I think if people really are gonna turn their back on Redbox after all they did, then they are rude and bad customers who just used them for the free codes. I apprecate all the money they saved me and gave me an opportunity to try out alot more movies to decide to buy. PS – I have bought 56 titles in the last 52 weeks on Blu-ray format. I will continue to only pay $1 for a rental including waiting out any lame waiting period. I don’t rent from any other company.

  6. Visitor [Join Now]
    Jeff [visitor]

    I think the whole idea of staged and controlled release formats is just annoying.

    Because of that, my personal attitude toward movie rentals is that if I’ve lived 30 years of my life without seeing a movie like Iron Man or Transformers, then I can wait another 1,2,6, 12 months, whatever until it comes out at a reasonable price. When you really think about it, theres not much difference (technically) between watching a movie in 2008 or watching it in 2009. Most of the time the only real factor is in how much your friends talk about it and your perceived idea of missing out.

    Of course that idea doesn’t apply to moments where people depend on me to know something about the content nor include times when there is a real difference or value between formats (like watching Jurrasic Park, Transformers, etc on the big screen or watching Avatar in 3D).

    I’ve decided that it must be some kind of psychological disfunction in people who think they have to be entertained at all costs. The entire history of the world’s genealogy (minus the last 80 years) has survived for a very long time without such a constant flow of media.

    If people could set their mental schedule to rent movies on a six month delay after the release schedule then it would be nearly like watching new releases … on the rotating delay.

    I guess all of that is to say that patience is a virtue. Always try and strive to have more of it.

    • Member [Join Now]
      Cypherdude [cypherdude]

      “Because of that, my personal attitude toward movie rentals is that if I’ve lived 30 years of my life without seeing a movie like Iron Man or Transformers, then I can wait another 1,2,6, 12 months, whatever until it comes out at a reasonable price. When you really think about it, theres not much difference (technically) between watching a movie in 2008 or watching it in 2009.”

      Actually, you could easily wait 1,2,6, 12 months without seeing Iron Man or Transformers. Both weren’t all that great. Transformers 2 was even worse, terrible even. In fact, Transformers 2 convinced me to stop renting DVD’s on a regular basis from Netflix. I now rent sporadically from Redbox and a couple independents. I prefer to rent free from Redbox if I can get them.

  7. Visitor [Join Now]
    Firstlawofnature [visitor]

    35 to 50%…that’s wishful thinking from a guy looking to protect his coverage universe. If it is that high then why would Redbox ever settle? Any 30 day distribution agreement would have better depth so how about consumers being trained to wait for $1, much in the same way Netflix has trained it’s customers to shun new releases. This analyst keeps inventing ideas around something he wants to see happen – the failure of Redbox. That’s not called analysis.

  8. Visitor [Join Now]
    FooBar [visitor]

    “If titles 1, 2, and 3 are not available after a few trips to a Redbox, and [consumers] are exposed to commercials on TV for VOD and on the Internet (streaming), we believe their perception of Redbox will change,”

    hello analyst….let me know where I can stream a movie with 1920×1080 resolution 24fps with Dolby Digital HD quality, and stream it in less than 30min.

    ..I will wait 30 days to get a DVD so I can watch it on my TrueHD LCD/Plasma screen that cost over $1000, not some crappy quality stream. Also most soccer moms don’t have the time to be geeky to go stream movies for their kids.

    Personally I think this article is just plain childish. Why not just say: Author is bearish on the stock, so short it..

    • Visitor [Join Now]
      FooBar [visitor]

      btw, Mr. Greenfield of Pali Research holds a B.A. in History.
      That’s right, big time Wall Street Financial Analyst…take that Warren Buffet (BS,MS Economics- Wharton & Columbia)

      • Visitor [Join Now]
        Firstlawofnature [visitor]

        He’s not a bad analyst actually but his emotion is running too high on this one. If he said somthing nice about Redbox then all media types he covers would probably not be so excited to talk with him.

        • Visitor [Join Now]
          FooBar [visitor]

          Its very irresponsible reporting on his part. When someone says 50% revenue decline, you better come up with some solid fundamental and financial metrics/analysis to support the data. Obviously 50% is a convenient number to pull out because it creates a shock factor.

    • Visitor [Join Now]
      Movie King [visitor]

      Agreed. I rent them & watch them. But I don’t stream them. And I’ve no plans to download or stream anything until it becomes as easy and price effective as the setup I have now.

      I’m have not invested in Blu-Ray either. I’ll just wait it out until it’s cheap, easy, and makes $$ sense to convert. Again…

  9. Visitor [Join Now]
    Just Anopinion [visitor]

    To me “new release” is an empty notion that is being imposed by the studios to make people spend money the way they are told. I watch movies when I feel like watching movies and the drive to watch the newest blockbuster is much weaker than the desire to see a classic that I have somehow missed. I can tell you that Avatar would not stand a chance against Citizen Kane if both were available at RedBox today. If there is one thing I miss is not that “new releases” will be delayed by 30 days at RedBox but that it carries very few classics (and the ones that it does are very recent near-classics). One-dollar rentals are one of the reasons I prefer RedBox; the ease of rental (it’s everywhere and I can be in and out in seconds) is the other. Delaying “new releases” is going to do nothing for me.

  10. Member [Join Now]

    Looks like Warner and Redbox have reached a 28 day window agreement.

  11. Member [Join Now]

    The 28 or 30 day window is what the movie studios claim they need in order to sell you a DVD or Blu-ray. After that, the media blitz they put on to get you excited about the release is gone. You don’t see ads for Transformers 2, do you? Of course not, because after the first 30 days the studios release it, they stop marketing it.
    Secondly, I hope Redbox negotiated to give in to the 28 days in exchange for streaming content, because lets face it, that’s what Netflix is doing. Would you rather just download it and watch it, or run to Redbox, Blockbuster, Family Video….
    And finally, Blockbuster is going under. Its like the Titanic, slow after first, but before you know it, its gone.
    28 days, fine… I waited 90 for it to come out on DVD anyway, whats another month.

    • Visitor [Join Now]
      Bob [visitor]

      I agree with you totally! After not going to a movie when it first came out due to the cost I will be happy to wait another 28 days to see it. Besides once you wait the first 28 day period there will be new movies every week just like there is now. Like lohertz said ‘whats another month’.

  12. Visitor [Join Now]
    Patient [visitor]

    I have to agree with several other users: “new release” is a relative term — and not in my estimation worth paying more for instead of waiting an extra few weeks. My wife, her sister, and on and on…we don’t need to get a movie on “day 1” because it will be the EXACT SAME movie on day 101. Guess we just have different priorities and concerns in our individual lives….

  13. Visitor [Join Now]
    Victor [visitor]

    Greenfield is an idiot. You can tell he’s in the back pocket of the Big 3. I say Boycott…Don’t go to the BoxOffice, Don’t go to Blockbusters, Don’t buy DVDs from the Walmarts, Targets, or Kmarts. Don’t you wait the 28 days…make the Big 3 wait a long time for your money. Make them beg you to come to see their flops at discounted prices. Hit them where it hurts. Support the little guys like Lionsgate and the other Indie producers. The bleeding of our wallets has to stop.

  14. Visitor [Join Now]
    Mike [visitor]

    I will wait 30 days and spend $1 vs buying for $15 or renting for $5. Heck, I already wait several months to save the $30 trip to the theater. Whats a few more days?

  15. Visitor [Join Now]
    Alexis [visitor]

    I’ll just rent from my library for free. By the time my name comes up on the waiting list for new releases, it will probably comparable to the same amount of time I’ve waited for Inglorious Basterds from Netflix. I’ve only rented from Redbox a few times and had to drive all around town to find a kiosk that wasn’t out of order – and it still didn’t process my return correctly. Luckily I bothered to call customer service and check when I didn’t get a confirmation email, so that I wasn’t charged the $25 or whatever the max fine is. No thanks.

  16. Visitor [Join Now]
    The Real Deal [visitor]

    Right now, Redbox releases about 4 new movies a week. With the new deal from Time Warner, I see that going to about 6 a week. Since I only watch about 2-3 movies a week, I will continue to rent since there are a backlog of movies I’ve never seen. This deal is great for Redbox since it 1) lowers their costs and 2) ensures they have as much new product as their customers want.

    The research analyst doesn’t think from a users perspective. All I care about is $1 movies. Now that Redbox will have many more to chose from, I will continue going to THE BOX to satisfy my needs.

    Heck, I might be willing to cancel my Netflix subscription if Redbox offers one!

  17. Member [Join Now]

    I believe that redbox should have the same rights to buy movies and rent at whatever price they choose. Others cannot compete as they have so much overhead, but why should that affect redbox? If Blockbuster or others had come up with this idea of kiosks, they would likely feel it is a good idea to take the overhead out of the equation. The persons losing money to redbox are “jealous” if that is the appropriate word. The owners of redbox have found a niche and created a new market, maybe others should follow instead of trying to undo what is done.

  18. Visitor [Join Now]
    tankdawg [visitor]

    I have a Netflix membership and I wait on movies from them. I like the instant downloading of movies and TV shows best. I still rent from Redbox a few times a month. So, the 28 days is no big deal.

  19. Visitor [Join Now]
    watch movies online free now no survey [visitor]

    Very interesting article I like your website keep up the great articles

  20. Visitor [Join Now]
    Robert [visitor]

    Shake your family tree and watch the nuts fall!