The other day we were able to hear some commentary from Redbox CEO Mitch Lowe about his company’s position in the current drama with the studios. Now comes some further insight from the CEO of Redbox’s parent company, Coinstar. At a New York investors conference yesterday, Coinstar CEO Paul Davis said that Redbox is in “daily negotiations with studios in an attempt to reach a distribution agreement”.
Regarding these negotiations, a compromise is not off the table, according to Davis:
“If you ask the studios what they like, it really comes down to price points and/or [distribution] windows. . . In their perfect world, we’d be charging the same price point as Blockbuster, I suspect. . . We’re trying to figure out a win-win situation. Both sides have to figure out a way to give a little.”
During his remarks, Davis also estimated that the three studios Redbox is currently suing (Warner, Fox and Universal) “represent about 40% of Redbox’s supply chain”. This number is consistent, according to Video Business, with Rentrak estimates of studios’ rental market share for the first half of the year.
Davis also had a few interesting comments to make about Redbox’s plans for the near future. He said that Redbox will be installing software in some of its kiosks that will allow variable pricing, ostensibly for items such as Blu-ray discs and video games. Even more interestingly, Davis also revealed that Redbox will begin testing a subscription model at select kiosks. No further details were given.
How do you think Davis’ comments jibe with what we heard from Mitch Lowe a few days ago, Insiders? How far do you think either side is really willing to compromise in this fracas?