Philippe Dauman, CEO of Paramount’s parent company Viacom, has had some nice things to say about the recent trial deal Paramount struck with Redbox.
Displaying an attitude that contrasts sharply with that of certain other studio heads, Dauman stated that the Redbox deal has had a twofold benefit for Paramount: it has added rental revenue to the company’s coffers and has provided valuable marketing data from specific markets. Dauman’s praise came during the Goldman Sachs Communacopia XVIII Conference in New York City.
“Redbox has obviously resonated with customers,” said Dauman, who estimated that a typical Redbox customer spends $2.50 on a rental because of multi-day rentals. “We felt that rather than litigate this, let’s test this, especially if Redbox proceeds with differentiated pricing for certain releases.”
The fourth quarter of this year will be an interesting test of the Paramount/Redbox alliance. Paramount’s Transformers: Revenge of the Fallen and Star Trek, two of the highest grossing films of the year, are coming out on DVD in October and November, respectively. While these huge films most likely would have done well regardless, you can be sure Paramount will be watching the rental numbers very closely looking for an extra boost from their less restrictive distribution. Your thoughts, Insiders?