According to Pali Capital analyst Richard Greenfield, an often outspoken critic of Redbox’s business model, the new 28-day Warner delay deal the company recently signed will bring benefits to Blockbuster Video, as well as VOD distributors and Apple. Home Media Magazine quotes Greenfield says that BB is “largely immune from the embargo by virtue of a multi-platform distribution strategy that allows consumers to rent and buy movies in-store, by mail, kiosk and electronically”.
In the wake of Netflix’s and Redbox’s delay agreements, Blockbuster will have the physical disc rental market basically to itself for a month after DVDs are released. Greenfield also said that “cable operators touting new-release movies day-and-date with packaged-media availability (a strategy spearheaded by Warner), as well as Apple’s iTunes store, will benefit from the expedited access to 20% of home entertainment’s annual releases, according to”. Says Greenfield:
“We live in an ‘I want it now’ world, and waiting 28 days for Harry Potter is simply not a compelling consumer proposition,”
Because Blockbuster rental transactions generate more profit for the studios that Redbox’s, Greenfield believes that BB will remain exempt from any new release embargo that might further injure the embattled company. According to Greenfield:
“We suspect the studios actually hope this stabilizes Blockbuster’s finances in the near-term,”
Greenfield also thinks that the month-long delay before new titles reach Redbox and Netflix will allow Warner (and other studios, potentially) to repurpose early returned discs and supply them to the two renters, which would provide significant savings. Said Greenfield:
“Studios could essentially utilize returns from the retail channel to fill the kiosks, as 28 days would be more than enough time to get Wal-Mart/Target returns processed — turning retailer returns into kiosk revenue,”
Is Greenfield right here, Insiders? Will ailing BB get a boost from Redbox and Netflix’s capitulation? Give your opinion in the comments.
(via Home Media Magazine)