Unlike several other studios, Paramount has opted to take a measured approach to the rise of Redbox, and has declined to rush to judgment on the kiosk company’s impact on home video revenues. With the four-month “trial” period of the companies’ agreement coming rapidly to a close, however, Paramount will soon be deciding whether or not to continue distributing titles to Redbox for the long term. According to the press release put out by Redbox in August of this year, “Following the four-month trial period, PHE [Paramount Home Entertainment] has the option to extend the program to 2014, with an out clause after two years.”
Merriman Curhan Ford analyst and frequent Redbox commenter Eric Wold believes that Paramount will make its decision by the middle of December. Says Wold:
“We believe investors will be watching for that decision closely given that Paramount will have a significant level of information on rental trends and sales information at its fingertips ahead of time. . . Clearly, if Paramount believes that Redbox is negatively impacting sales trends and/or not positively impacting overall home video revenues, then they are unlikely to extend the deal.”
With Transformers: Revenge of the Fallen already released on DVD and BD, and G.I. Joe: The Rise of Cobra and Star Trek coming out this month, Paramount has some of the biggest films of the year coming out on disc this quarter. With so much money at stake, it’s certain that Paramount will take a long hard look at Redbox’s impact, positive or otherwise, on its revenues as it considers its decision.
Which way will they go, Insiders? Is Paramount going to decide it’s got a good thing going with Redbox, or will it be “hasta la vista” for the distribution deal?
[via Home Media Magazine]