Hollywood industry journal The Wrap, hot on the heels of an editorial from Redbox’s Mitch Lowe, has published a counterpoint essay by Hastings Entertainment CEO John Marmaduke. In his remarks, Marmaduke says he understands Lowe’s enthusiasm for Redbox’s pricing model, but asserts that drastic changes must be made to “prevent the devaluation of new entertainment products”.
Discussing Redbox’s business model, Marmaduke had the following to say:
“We simply cannot give away products that cost hundred of millions of dollars to produce or else we will end up just like the newspaper industry, which now has an unsustainable business model. Once the main product of an industry is artificially devalued, the negative economic impacts will ripple throughout the industry, impacting the workers and businesses that rely on the overall industry. Let’s not create a modern-day ‘Goose that laid the golden egg’ parable.”
Marmaduke goes on to propose a solution that will allow Redbox to maintain its current $1 per night rental model: the company needs to integrate itself into the established industry model for release windows, rather than renting films for a dollar as soon as they are available. In short, Marmaduke wants Redbox to acquiesce to the delayed release windows several major studios have demanded.
Marmaduke concludes his remarks with a dire prediction of what will happen to the industry should Redbox fail to come to terms with the studios:
“Mitch Lowe’s approach to $1 DVD rentals might make him a lot of money in the near term, but it will destroy the entertainment business and result in thousands of lost jobs in the months ahead. There is a way to prevent that from happening if Redbox would try to work with the entertainment industry instead of against it.”
Can you feel the tension, Insiders? Passions on both sides of this battle are running high and getting higher, and there are a lot of people with a LOT of money on the line. Is Marmaduke a voice of reason, trying to shout above the din? If so, will he be heard?
[via The Wrap]