After the dust settled a bit from the huge announcement earlier today regarding a 28-day new release delay agreement between former foes Redbox and Warner, several analysts, industry players and the participants themselves weighed in on the deal.
Fox, which remains legally entangled with Redbox said the following in a statement:
“We support a vending window in light of the changing rental landscape and we are looking at a variety of new approaches. . . Since we are in litigation with Redbox, however, our policy is that we are unable to comment further.”
Kevin Tsujihara, president of Warner Bros. Home Entertainment minced no words about his studio’s motivation behind the deal:
“We want to move consumers to activities such as retail rental, video on demand and buying that have the best economics for the studio . . . Those who want to pay $1 and are willing to wait, God bless them.”
Redbox president Mitch Lowe seemed to acknowledge defeat in Redbox’s attempt to circumvent Warner’s efforts to deny it new relase titles, but tried to spin the deal in a positive manner:
“We were not serving our customers by getting them enough copies of the titles they wanted . . . This seemed to be the best way to give our customers more copies and get a deal that made economic sense .
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. . We’ll get a lot better selection and we’ll get the [copy] depth that matches the demand . . . That, along with [access to] Blu-ray titles and significantly lower [disc] costs makes this a really good deal for us and Warner.”
Merriman Curhan Ford analyst Eric Wold was, as always, bullish on Redbox:
“Knowing that Redbox would not enter into any studio distribution deal that has lower economics than what the company was experiencing on its own with the workaround programs, then I view this as a strong positive . . . Clearly management has calculated an equal or upside margin benefit to moving towards this deal. This and the removal of the lawsuit should remove some clouds from the company’s outlook and stock price.”
Michael Pachter, with Wedbush Morgan, was a little more sanguine in his take on the agreement’s benefits to Redbox:
“As long as all rentailers are on a level playing field, it’s good for Redbox . . . So far, we know about Netflix and Redbox, but we don’t know about Blockbuster.
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If Blockbuster gets a 28 day head start, then it’s not so good.”
Now it’s your turn to weigh in, Insiders. Now that the Hollywood Three are down to the Hollywood Two, will it be long before the ink dries on a Redbox deal with Fox and/or Universal? What is the DVD rental market going to look like in six months? Do you think there will be a net benefit to consumers from this deal?
(via The L.A. Times, Home Media Magazine and TechCrunch)
As predicted, Fox Wins. After Warner, Redbox will be windowed by Fox, Universal, Paramount, Disney, etc.
For the cheapos who state that they have no idea when a movie is released and consider something new only when it becomes available at Redbox, keep in mind that studios will bump up advertising now that the cheapo market (Netflix, Redbox) is windowed. Advertising will increase for the VOD market as well as for other higher margin transactions. So you’ll know that the movies are available, just not at Redbox.
Also, with a window in place Redbox is in an inferior position relative to Blockbuster Express kiosks. With only 4,000 kiosks in the market, Blockbuster Express kiosks will not face the same operational headaches as Redbox, which had to find adequate supply for over 20,000 kiosks. Blockbuster Express might face an operational headache at some point, just not now.
I love the thought of that marketing campaign…’pay more now for immediate viewing of warner movies, we have them now and redbox doesn’t’ Good luck getting that message out cleanly to consumers.
VOD still sucks in hundreds of small ways. I can’t even tell you all the reasons why I almost never use it. Good luck on getting everyone to use that crap interface.
What is the scenario if DVD sales continue to drop even with the 28 day window?
Foo,
Did you see walgreens is buying out Duane Reade? This is BBI/NCR’s only organic win of size. The red army may be coming to Manhattan after all. Poor BBI can’t seem to catch a break.
Guess NCR has to buy RED stickers now.
“Advertising will increase for the VOD market as well as for other higher margin transactions. So you’ll know that the movies are available, just not at Redbox.”
Sure, because people are stupid cows who only do what they are told by the brainwashing media. I don’t watch commercials. When I feel like watching a movie, I’ll go to RedBox or whoever will rent me a movie at the lowest price, and see what they have. That’s it. And if that falls apart (like RedBox being forced to raise their prices) maybe, just maybe, I’ll go and “rent” it for free, if you see what I mean. There are checks and balances in each society and the pirate market is created and sustained by the practices of the respective businesses. People are not stupid, they know what products are worth and that’s what they’ll pay, no more.
hey FoxWins,
Your comment is almost going to be hidden because of poor ratings. Before that happens, you have not answered my question yet…
Question:
What happens if FOX DVD Sales continue to FALL even after the 28 day window?
oops too late
..and I cant tell you how happy we are all that the rich execs and people like you will continue to thrive…thank God! LOL
The world is righting itself again!
I can’t wait to hear your plans for driving Blockbuster Express to its rightful place at the top! High Five! douche
Your argument is pointless. I can go see a movie right now at a movie theater and spend $10+ per person -or- I can wait 4 or so months until it comes out on DVD and spend $15 to purchase it, $5 to rent it at blockbuster for 5 days, $5 on VOD and only keep it for 24hrs -or- wait only 28 more days and pay a buck. 28 more days is not going to kill me to wait. I’ve already waited several months not to pay the price at the theaters. Now if VOD drops their price to a dollar a day then redbox will have competition.
If they think this will cause people to buy more DVDs, I doubt it will.
If BB doesn’t have the same restrictions, it just shows how corrupt people can be.
Movies aren’t ‘that’ important to me to make me ‘have’ to buy a DVD on release day.
I’ll patiently wait for it to come out on Redbox and Netflix. (I’ve already been waiting. What’s another 28 days gonna do?)
the 30 day windows mean nothing to me.i don’t need to go out and get movies the first day they are out so i like this deal for redbox an i hope universal and fox do the same.i will not buy a movie before renting it so i will wait as long as i have to for my 1 dollar redbox rental then if the movie is worth it i will go out and buy it.
Kevin, Pres. of Warner, makes an ignorant statement as he highlights Warner only made the deal to try to get more money $$$ for the STUDIOS, whereas Redbox makes the statement they agreed to the deal to save money/keep rental prices low for the CUSTOMERS while getting a better dvd selection for them. Pres. of Warner even gets more condescending to the people/customers with his statement of ‘god bless them”–belittling the people/families who are on a budget and “have to wait” for the delayed releases in order to be able to afford the rentals within their budgets. This statement was soooooooooo condescending by the greedy Pres. of Warner as to imply that all people on a budget are peons. Fox and Universal Presidents would be wise not to make the same condescending remarks about customers.
“What is the DVD rental market going to look like in six months?”
I think we will see growth in the segments which are unaffected by this window- VOD and downloads. Which is kind of what the studios are pushing. The studios/distributors make more on those anyway ($4-6 per rental with a lot less overhead) and customers don’t have to make any trips to the mall/walmart/rental store/kiosk to return (or rent in the first place) any discs that can get lost. It might boost ticket sales somewhat as well.
“Do you think there will be a net benefit to consumers from this deal?”
I don’t think there will be much of that. If this is like the netflix deal, it should make it easier for redbox to supply more copies of in demand titles at less cost to redbox. But I don’t see this as helping much unless redbox suffers from the same problem netflix does- having long waits for some titles for a long time.
If I did not go to see the original movie due to cost it will not effect my decision to use Redbox just because I have to wait an additional 28 days.
I think it’s outrageous. I have to agree with the above poster. Time Warners’ statements are condescending. I’m just glad I cut down on my DVD rentals 6 months ago. My Netflix account has been on “pause” and I won’t restart it. If I were to restart my DVD rentals, I’d have to return to BlockBuster Online. As it stands now, the only places I can sporadically rent new releases are at my local independent rental stores. It looks like they’re the real winners in this. Who would’ve thought? Because they’re so small, I doubt they’ll be affected in all this.
Exactly. Indies will be the best bet for cheap day-and-date New Releases for the next couple of years. Plus your money will go to helping your local community instead of a faceless corporation.
Win-Win really.
True story…my local renter banged hundreds of credit cards including mine as they closed their doors for good. So much for helping your local community.
With movies like “Everybody’s Fine” coming out within 2-3 months of its initial release, what is another month? We used to wait a lot longer for “new releases.” There are must buys and rentals. Rentals will always be rentals even if I have to wait a month. At least the studios aren’t dumb enough to make higher quality movies so there are more “must buys.” That would be silly.
there will now be 2 release dates, the “hollywood a-hole” release date, and the Redbox release date. I DONT KNOW ABOUT YOU, BUT I PREFER THE REDBOX DATE!!! 28 days! SO WHAT! I WILL WAIT! 28 DAYS WILL BE QUICK