In a rare instance of good news for Redbox these days, the kiosk operator has renewed its packaged-media distribution deal with Universal Studios Home Entertainment. The deal was set to expire this December, and is now extended through the end of 2015.
Redbox has worried investors with declining profitability, a struggling Redbox Instant streaming service, and a slew of deals with studios that are due to expire soon or have already lapsed. This new deal may be a hopeful sign that Redbox is turning things around, but B. Riley & Co. analyst Eric Wold isn’t ready to give Redbox a shining endorsement just yet. Said Wold:
“We will reserve judgment on studio trends until we get a better sense of the remaining ones, especially as the Redbox Instant carrot might be disappearing,”
A good sign for Redbox, or just a bit of good news that will soon be swept aside?
[via Home Media Magazine]
Not going to help any…
The Box will need to do a Ton more.
They will still lose millions.
They need to can that Instant bit. And get the Box going again like they did at the very start…
But with Verizon in on it….
Not good…………..
Maybe redbox should focus more on back catalog titles.
There are plenty newly released BD’s classics from all the major studios.
I doubt that they would rent enough to make it worthwhile. My local library has shelves full of classic DVDs that don’t circulate at all.
Very true. But most of the disc at the library are a mess. And don’t play right…
Leave the catalog titles to the digital world, as with digital rentals and Netflix, the consumer expectation is a download/streaming experience. Redbox ought to focus on ALWAYS having the newest releases available at virtually every kiosk. No more wasting box kiosk sports on garbage DTV titles that no significant amount of audience rents. Only put in the kiosks what people will actually want to rent and have the last month of “high end” new to disc releases ready to be rented Day and Date with their sell through release and available at the kiosk any time or day of the week. After a title cycles out of the kiosk, sell the discs (either at the kiosk or to liquidators) for 20%-30% of the original purchase price.
Its the Blu-ray disks that are the key. The price differential for renting is nominal compared to the purchase price.
I really don’t get how Redbox is screwing this all up. New releases are the undisputed champion of the rental market, digital rentals aren’t ready to eliminate disc rentals yet and aside from Netflix by mail, there is virtually nowhere to go to rent discs anymore. You can’t tell me that there isn’t a sustainable business model when you are the only one renting physical discs not by mail.
These studio deal are actually the problem. Yes, Redbox gets wholesale pricing for the discs they buy, but there are 28 day windows, minimum orders, agreements to purchase and carry lessor titles and agreements to destroy discs after a certain amount of time. Maybe Redbox would be doing better paying $5 more per unit for Edge of Tomorrow if they didn’t have to spend 5 disc spaces per box on some low rent DTV horror film and could sell their older inventory when it cycles out of the kiosks.