Paramount Home Entertainment’s recent extension of its trial deal with Redbox was an astute decision, even if it may not be in the best interests of Hollywood at large. So says Richard Greenfield, an analyst with Pali Capital. One major reason for Greenfield’s assessment is the fact that as part of the agreement, Redbox is obiligated to showcase films that failed at the box office, which can help Paramount recoup its investment.
Citing Imagine That, which earned just $16 million during its theatrical run, Greenfield noted that the film was the number two Redbox rental during the week of its release in early October. The film did not even reach the top five in sell-through new releases that week.
Greenfield also noted that even if Redbox loses its legal battle against the Hollywood Three in 2010, Paramount’s earnings will “blossom in the interim despite its association with kiosks not appearing to be ‘in the movie industry’s best interests'”.
With Paramount having several more films (The Lovely Bones and Up in the Air) that may see greater success in rental kiosks than in theaters, what do you think the future is looking like for Paramount’s still-fragile relationship with Redbox? Give us your predictions in the comments.
[via Home Media Magazine]