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Paramount Extends Deal with Redbox

After ten months of evaluation and experimentation, Paramount has decided that Redbox is not hurting its DVD sell-through business and has extended its agreement with the kiosk operator through the end of 2014. Paramount’s attitude stands in stark contrast to that of other studios such as Warner, Fox and Universal.

Dennis Maguire, president of Paramount Home Entertainment, offered the following on his company’s decision:

“The bottom line was that there were two conclusions we came to . . . There hasn’t been a cannibalization of DVD sales from Redbox, and that Redbox was allowing us to expand our business and ultimately make more money than if there were windows.”

Maguire went on to say something that is completely anathema to other some studios: that forcing consumers to wait to rent titles is not compelling them to buy more DVDs. Said Maguire:

“Those people who want to rent are going to figure out ways to rent . . . and us restricting them from renting isn’t going to turn it into a purchase.”

Why has half of Hollywood decided to embrace Redbox, while the other half has seen fit to try to sequester it behind delay windows? Why are Tinseltown bean counters coming up with such different conclusions as to Redbox’s effect on DVD sales? Leave us your opinion in the comments.

(via the L.A. Times)

26 Responses to “Paramount Extends Deal with Redbox”

  1. Visitor [Join Now]
    Farva [visitor]

    Now if Warner, Fox, and Universal will just confess what Paramount and Disney have concluded then we can get rid of these stupid 28 day delays.

    • Visitor [Join Now]
      rb [visitor]

      Ditto, and ‘confess’ is a good choice of a word to describe the other studios unwillingness to admit their theory was wrong and that Redbox $1 rentals did not devalue/ were not the reason for the studios’ decline in dvd sales!

    • Member [Join Now]
      tlochner

      dont forget the 2nd biggest movie studio … sony!!! no 28 day bs there …
      you can tell the studios that have executives that are do their jobs and can figure things out … unemotionally!!!! lets face it some people have brains some dont …. and
      lets face it some people have balls … some dont ….

  2. Member [Join Now]
    tlochner

    doesnt matter to me if you add 120 days to the release .. i still wont pay 15 to 25
    to buy a movie i will LIKELY only see 1 time.
    i watch too many movies to see them again.
    i prefer free! … watch once and dispose of … thats what i do!!!

    • Visitor [Join Now]
      The Situation [visitor]

      And you expect a business to run off of freeloaders such as yourself? As a Redbox fan, you make me happy that you are personally killing off the blockbuster business that you love so dearly. If you loved these business so much, you wouldn’t be helping their demise!

  3. Member [Join Now]
    tlochner

    i get hbo too and even with a hd dvr … i rarely timeshift a movie! id rather watch it off the computer where it is digitaly regenerated and immediately presented on screen by a quality box/computer.
    i have verizon FIOS and they have always had dropouts in the movies. i find that so annoying that i never do pay per views and never record and timeshift movies.
    i alway get the disks from kiosks and netflix and library and other places to
    watch. i only use hbo for series disks like entourage etc. i then use dvr to timeshift to my time! all hdef!

    verzion has tried with their BEST techs and cant find anything wrong with my line or signal and cant determine where the dropouts come from. thus verizon broadcasts are of more lower value to me. they keep my kids and family and happy while i watch strictly movies and just a few hbo shows. comcast is no better they all suck! that is why disks are not ever going away
    unless you can reliably download onto a stick from a kiosk or
    something like that!

    until then … dvds rule

    • Visitor [Join Now]
      firstlawofnature [visitor]

      ‘verzion has tried with their BEST techs and cant find anything wrong with my line or signal and cant determine where the dropouts come from. thus verizon broadcasts are of more lower value to me.’

      Ditto that for me.

  4. Visitor [Join Now]
    John Small [visitor]

    Good deal for Redbox. I must admit that this deal surprises me given the rumblings I’ve heard from the Paramount offices.

    Perhaps Paramount has decided that BBI is going to go down faster than they thought and they are deciding to jump ship to Redbox before the CH. 11 filing. The BBI numbers are definitely deteriorating faster than they expected.

    Anyway, this is a win for Redbox and a win for their customers.

    • Visitor [Join Now]
      firstlawofnature [visitor]

      It’s a great deal for Paramount as well as they are increasing the amount of money they make.

      Two quotes from LA Times:

      “There were two conclusions we came to,” said Dennis Maguire, president of Paramount Home Entertainment. “There hasn’t been a cannibalization of DVD sales from Redbox, and Redbox was allowing us to expand our business and ultimately make more money” than if the studio held back its DVDs to Redbox for a period of time.

      “Those people who want to rent are going to figure out ways to rent,” he said, “and us restricting them from renting isn’t going to turn it into a purchase.”

      • Visitor [Join Now]
        justme [visitor]

        Gee, thanks for the info, where in the world did you find it, oh yeah at the top of the page in the article that this discussion is all about! LOL!

      • Visitor [Join Now]
        John Small [visitor]

        Short term gain for Paramount. Long term loss.

        Like I said, it looks like they are cutting their losses with BBI and trying to get as much of the much smaller Redbox market share that will remain.

        Paramount is well known for trying to cut their losses early on investments. This looks like another one of those situations.

        • Visitor [Join Now]
          Firstlawofnature [visitor]

          Ever think that just maybe Iger, Paramount and others are making a rational decision in passing on the 28 day delay? Crazy as it sounds perhaps they are better informed on the subject than you.

          • Visitor [Join Now]
            John Small [visitor]

            Well, that could be the case. Maybe they like the fact that their titles underperform when compared to the titles from the studios who have a 28 day delay?

            It looks like Disney and Paramount are just accepting the new normal of lower sales levels rather than trying to fight back like the windowed studios. They can say that there is no corrosion of sales on their titles but it isn’t true.

          • Visitor [Join Now]
            RunninWild [visitor]

            I don’t think they are saying there is NO corrosion of their sales but that they don’t see redbox as being enough of a factor on that corrosion to pass up on an opportunity to guarantee themselves some specific numbers going forward on future releases. It’s smart business and will allow them to plan better by also removing some points of uncertainty. They are accepting a change and deciding to step up to the challenge. It’s actually quite a refreshing change to see.

          • Visitor [Join Now]
            Jessie [visitor]

            Firstlawofnatures true identity is Eric Wold.

          • Visitor [Join Now]
            darren dahlen [visitor]

            Just google searched Eric Wold no doubt about it it’s him. That’s funny

          • Visitor [Join Now]
            John Small [visitor]

            C’mon guys. FLON may be an idiot and have no idea what he is talking about and even be a Coinstar shill.

            But even he is not as shameless as Eric Wold.

  5. Member [Join Now]
    alans613

    IMHO I don’t think the 28 day delay does anything but piss off customers. If they want their movies for $1 they’ll find a way to get them…at BB Express kiosks. Disney and Paramount are wise to this, but Warner, Universal, and Faux aren’t. It doesn’t matter whether or not they have 28 day delays, they’re not going to make DVD Sales go through the roof again. That ship has long since sailed.

  6. Member [Join Now]
    starman15317

    This is great news!

  7. Visitor [Join Now]
    BDA123 [visitor]

    There is a lot more to this than meets the eye. Paramount knows that the future of movies sales will take place at a theater or digitally over the internet. A redbox kiosk is merely the best current delivery method. That will change as Netflix and Redbox both acknowledge. The future players seem to be Redbox, Netflix, Amazon, Walmart.com, Apple, and CinemaNow. I am guessing that any or all of these could survive (however history shows that only three or four will likely survive) with different approaches to the market. BB is dead as a future method of content delivery. It is best for the studios to “make friends” with any potential future delivery system. The lines between ownership and rental will blur a little. You will see a shift in delivery prices that more closely match demand. You will have the option own it for one price or rent it for another at different intervals after release. Fighting the future is a wasted cause. It is better to embrace it and try to stay ahead of the curve. BB is a great example. You can fight it and deny it for a while but it will blowup in your face because you will have lost touch with the needs of your consumers.

    • Visitor [Join Now]
      rb [visitor]

      Agree that BB demise is they lost touch with the needs of their consumers. However, I still feel that there will always be a need for a tangible/physical dvd (rental or sales) for consumers instead of totally digital. I remember watching 60 minutes with Andy Rooney talking about how special it was to receive hand written letters from friends/loved ones, etc. but how now it’s all emails. Years after receiving hand written letters a person still takes out those hand written letters and reminisces/feels an emotional connection to the memories that the tangible piece of hand-written paper brings. Same with how holding an old record album brings special memories. Not so with deleted emails or digital songs, etc.–nothing to hold on to. It’s the substandard movies the studios are turning out combined with the high cost to buy those dvds that aren’t meeting the wants/needs of consumers.

  8. Visitor [Join Now]
    Shelley [visitor]

    I belong to both Netflix & to Blockbuster. What I can’t get at Redbox due to 28 day delay I rent at BB. Usually whatever movie I want if it is not available at Redbox/Netflix then it is on BB & vice versa – works quite well. I never buy new release movies!!! And when I do it’s only on amazon or ebay for cheap. They are pretty stupid if they think by delaying rental date people will buy it on DVD. Their LOSS!

  9. Member [Join Now]
    btt

    Because Redbox is kicking blockbuster and others butts. Blockbuster was so greedy with their rentals and late fees, that they forced people to begain to download movies and the birth of REDBOX.
    Redbox forever.

    Now we want ps3 games for a max of $3.00 per day or $5.00 for 3days. These rates would best best for the greatest rental vol.

    ps. Redbox need more employees to load up the redboxes. The one problem is not having the same movie in stock at several locations. This will cause a problem for the bottom line. NO PRODUCT NO REVENUE! PEACE MBRADSHAW

  10. Visitor [Join Now]
    Kristina Cringle [visitor]

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