Eric Wold, a financial analyist with San Francisco-based Merriman Curhan Ford, has previously stated that he likes Redbox’s short- and long-term chances in its legal battle against several major studios.
In a recent note to investors, Wold proposed the idea that Redbox could work out an arrangement with a major retailer such as Walmart, Best Buy or Target to acquire Warner, Fox and Universal titles in large quantities. The hypothetical deal would allow Redbox to get better pricing than it currently receives from other third-party resellers it obtains delayed-release titles from.
Wold suggested that retailers would discover that bulk sales to Redbox could be “quite valuable”. He also recommended Walmart as an ideal candidate, as the world’s largest retailer accounts for an enormous percentage of DVD sales and already has Redbox kiosks at many of its locations.
Despite likely Hollywood objections to any such deal, Wold believes that studio outrage would have little effect:
“However, given that some retailer chains actually dominate a significant portion of the DVD sell-through market, we believe the power would quickly shift to the retailer.”
It’s a fascinating idea, but that is all it remains for now: an idea. Also, it is unclear what effect Walmart’s recent announcement that it is reducing its in-store square footage for DVDs would have on its willingness to participate in such a deal. A hot new idea, or just hot air? Let us know what you think of Wold’s proposal in the comments.