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crazy_harryHot on the heels of yesterday’s commentary on customer choice from Mitch Lowe, we have some more insights from the head of Redbox. In a recent Q&A session with Forbes, when asked if some studios are behaving emotionally and irrationally by trying to cut off Redbox’s access to new releases, Lowe concurred with that assessment:

“Historically, they have been [acting emotionally and irrationally]. I dare them to show that we’re cannibalizing their sales. Not one studio has gone public with any proof of that. They just assume that renting at a low cost hurts their sales.”

Lowe goes on to state that Redbox has become “a convenient scapegoat” for the studios’ DVD sales woes, when at least some of the blame should be placed on increasing consumer discretion when it comes to film buying.

“People’s shelves are full of movies. They’re being more selective about what they’re purchasing.”

When asked why Redbox doesn’t agree to higher rental fees, which will translate into more profits for studios, Lowe stated the following:

“We pay the same money for the movies as Blockbuster–sometimes even more. So why shouldn’t we charge less to rent? Maybe the question should be: Why doesn’t Blockbuster charge less? The most amazing way to deliver movies to people is where they shop. We cut out real estate costs, and we’ve come up with a much more effective model.”

Half of the major studios love Redbox and “get” the opportunity it provides with its massive kiosk network, Lowe says. The other half needs to understand that instead of imposing restrictions, they should be acknowledging the boost to profits that Redbox can provide. Lowe thinks that the studios that “don’t get it” aren’t basing their feelings on facts and will change their minds at some point.

“…With our huge presence we can help promote films. For example: Management. It didn’t do well in theaters, but we promoted it heavily, and it made more in the first week in rental than it did during its entire theatrical run. . . We do a lot for our partner studios. We promote theatrical releases at no extra charge to the studios.”

Is Lowe talking sense, Insiders? Do you think that the rest of Hollywood will come around to his way of thinking? Give us your thoughts in the comments.

[via Forbes]

27 Responses to “Redbox CEO: Studios are Being “Emotional and Irrational””

  1. Member [Join Now]
    • Visitor [Join Now]
      Jody [visitor]

      thats strange since it says on the kiosk I go to that it is $1 per night per rental. That means, each day is an additional $1. Therefore common sense says if you keep it for 20 days, it would be $20 – duh. Plus, it says that if you read it. Silly people with no common sense…it’s scary!

      • Visitor [Join Now]
        Consumer [visitor]

        Except near Lancaster, PA where Redbox is now charging $2 for the first night. We all knew this was coming.

        Shopping Cart
        Pickup location:
        890 E Main St
        Ephrata, PA

        You must checkout to reserve your movie.
        Once reserved it will be held until October 29, 2009 9:00 PM
        Tinker Bell And The Lost Treasure

        $2.00 first night
        $1.00 each additional night

        These are the nearest redbox locations with your movie available:
        + Add Another Movie
        Sub total $2.00
        Tax $0.12
        Total $2.12

        • Visitor [Join Now]
          Jody [visitor]

          Sorry, never heard of it being more than $2….seems like it would have info on that somewhere????

          • Visitor [Join Now]
            Jody [visitor]

            I mean more than $1

          • Member [Join Now]
            Brmurphy68 [brmurphy68]

            Customer Service says we are in a test market for the $2. I asked what is the test market, their answer Albequerque New Mexico and Harrisburg Pennsylvania. I said I am in Lancaster PA and it is charging $2, so how far is this harrisburg market, customer service answer I do not know. I said how can you charge $2 when it says $1 on your kiosk, it says $1 on your website, sounds like false advertising to me.

            Another question, how come when you finally find something you like, they have to screw it up. The video store was pretty neat till they charge $4.99 for a rental, then came Redbox $1 to rent a movie that you can rent at many locations and return at any convenient location, wait until I really like it…..then make it twice as much money.

        • Member [Join Now]

          At $2 I will jump ship to Blockbuster or Netflix online rental.

          • Visitor [Join Now]
            Consumer [visitor]

            Redbox is testing a $1.50 per day in Albuquerque, NM.

            Pickup location:
            Machine B
            320 Yale Blvd SE
            Albuquerque, NM Checkout
            You must checkout to reserve your movie.
            Once reserved it will be held until October 29, 2009 9:00 PM

            Ice Age 3: Dawn of the Dinosaurs$1.50

            $1.50 first night
            $1.50 each additional night

            These are the nearest redbox locations with your movie available:

            + Add Another Movie
            Sub total $1.50
            Tax $0.10
            Total $1.60

          • Member [Join Now]

            If Redbox annoys me running some stupid test I will get Blockbuster or Netflix trial and see how that goes.

  2. Visitor [Join Now]
    The [visitor]

    Redbox also helps the studios promote their movie trailers and logos. You can’t skip past some of the studio animated logos, you have to watch the whole thing.

    • Visitor [Join Now]
      rb [visitor]

      Exactly. Also it was a first when around 2 weeks ago I got an email from Redbox with the Michael Jackson trailer for This is It–by Sony studios!

  3. Visitor [Join Now]
    Joe Schmuck [visitor]

    PHYSICAL: Street-date delays reflect legal issues with studios
    By Danny King and Susanne Ault — Video Business, 10/27/2009
    OCT. 27 | PHYSICAL: Redbox says two out of three Americans will stay at home to watch a horror movie for Halloween. Whether the U.S. movie-rental kiosk leader will have the necessary titles in stock is another question.

    Warner Home Video’s Orphan and Universal Studio Home Entertainment’s Drag Me to Hell were among titles released on DVD today that weren’t stocked at many Redbox machines across the country, according to a Video Business spot check of kiosks at retailers such as Albertson’s, 7-Eleven and Ralphs. Kiosks in California, New Jersey, Pennsylvania and Texas listed titles including Orphan, Hell and 20th Century Fox Home Entertainment’s Ice Age 3: Dawn of the Dinosaurs under the heading of “Coming in October” but didn’t have physical copies. The latest Ice Age installment grossed almost $900 million in theaters worldwide after its July release, while Orphan and Hell grossed a combined $136 million, according to

    DVD copies of Tinker Bell and the Lost Treasure, the Walt Disney Studios Home Entertainment title whose DVDs and Blu-ray discs went on sale today, were stocked at the kiosks that were checked.

    The lack of availability reflects Redbox’s challenges in stocking titles from Warner, Fox and Universal, which prohibit the sale of their new DVD releases to kiosk operators such as Redbox until at least four weeks after their street date. Redbox has lawsuits against all three studios, which have taken issue with Redbox’s $1 a night rentals, and has had to arrange for so-called “workaround” agreements such as buying DVDs from retailers such as Walmart in order to stock machines on or near street date.

    Redbox executives didn’t immediately provide estimated availability dates for Orphan, Hell and Ice Age

    • Visitor [Join Now]
      michelle [visitor]

      Well I want to see the drag me to hell movie and haven’t seen it avalible at the redbox in walmart. Now I know why. I will wait until they get it in to see it cause I see no reason to pay blockbuster or my local grocery $4.99. I know alot of blockbuster employee’s say blockbuster is losing alot of buis and I can see why. So glad I have 3 local redboxes it’s cut back on the waiting line.

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

    All of those titles are available at your local video store. No reason to wait for Redbox.

  5. Member [Join Now]

    The video business article got one thing wrong though….Drag me to Hell came out a couple weeks ago and is in fact in kiosks right now.

  6. Member [Join Now]

    I purchase more DVD’s because of Redbox. I’d rather pay $1 to preview a movie before I purchase it, as opposed to take the chance of buying a crummy movie.

    • Member [Join Now]

      Same here as a dvd is a major purchase for me. Just like any other business the ones at the top can’t relate to the ‘little people’, lol, who actually keep an eye on their money.

  7. Visitor [Join Now]
    Joe Schmuck [visitor]

    Analyst Puts Kiosks at End of Home Entertainment Food Chain

    By : Erik Gruenwedel | Posted: 27 Oct 2009

    With the major studios immersed in discussions to completely revamp the home entertainment release hierarchy due to slumping packaged media sales, Pali Capital analyst Richard Greenfield said $1-per-day rental kiosks should take a place at the end of the line.

    Greenfield, an early advocate for preventing rental kiosks distributing new releases, said that in order to protect DVD (and Blu-ray Disc) sales, new releases should be sequenced according to their profitability to studios.

    Specifically, the analyst would prioritize new releases in the following order:

    1. Digital sale of movie downloads through iTunes, Amazon and other services.
    2. Physical sales of DVD and Blu-ray Disc
    3. Cable video-on-demand (VOD) and digital rental via iTunes and others.
    4. Physical rental through Blockbuster, Movie Gallery, Hollywood Video, etc.
    5. Physical by-mail rental via Netflix and others.
    6. Physical rental through kiosks.

    “Why should [consumers] have easy access to renting [a new release] movie for $1 per day the same time it hits Wal-Mart for sale at $16?” Greenfield wrote in a note. “We understand what a consumer wants. We just see no reason why the studios should enable that behavior.”

    While the analyst admits his home entertainment distribution pecking order would amount to a “studio dream,” he said the studios must prevail in their legal battles with Redbox.

    Indeed, Greenfield said he is increasingly confident Universal Studios Home Entertainment, Warner Home Video and 20th Century Fox Home Entertainment will prevail in their separate legal cases with Redbox.

    He cited a recent National Law Journal article, which said Redbox’s legal challenges wouldn’t hold up.

    “The real complaint is Fox won’t sell DVDs to Redbox on the terms Redbox demands, and that is not in our view an antitrust violation,” said the article.

    Greenfield said Sony Pictures Home Entertainment, Lionsgate and Paramount Home Entertainment, which extracted exclusive new release deals with Redbox worth a collective $1.1 billion over five years, should all opt out of their agreements when Redbox loses.

    The analyst said studios should renegotiate new terms with online DVD rental pioneer Netflix, which continues to gain subscribers and enjoy rock star status on Wall Street despite the recession.

    Greenfield included Blockbuster in renegotiated revenue-sharing deals with the studios to carve out a unique release window (Blockbuster offers sellthrough, by-mail, electronic and traditional rental).

    “The studios may also see an opportunity to expand their relationship with Blockbuster into the kiosk arena, where management appears more than willing to accept a window and is even working on building kiosks with greater title depth to drive rentals,” Greenfield wrote.

  8. Visitor [Join Now]
    Joe Schmuck [visitor]

    Redbox and Summit Entertainment Sign Distribution Agreement
    Summit’s Library Includes the Hit Film Series The Twilight Saga, Knowing and other popular titles

    Press Release
    Source: Redbox
    On 9:00 am EST, Monday November 2, 2009
    Buzz up! 0 Print.Companies:Coinstar Inc.
    LOS ANGELES and OAKBROOK TERRACE, Ill., Nov. 2 /PRNewswire/ — Summit Entertainment, a full-service worldwide film studio and Redbox Automated Retail, LLC, today announced a two-year distribution agreement which expands the depth and breadth of Summit Entertainment titles available at the more than 15,000 redbox DVD rental locations nationwide. The announcement was made by Stephen Nickerson, president of home entertainment at Summit Entertainment and Mitch Lowe, president, redbox.

    Related Quotes
    Symbol Price Change
    CSTR 31.74 0.00

    {“s” : “cstr”,”k” : “c10,l10,p20,t10″,”o” : “”,”j” : “”} “We are very pleased to enter into this agreement with Summit as it underscores our commitment to creating winning relationships for our customers and studio partners,” said Mitch Lowe, president, redbox. “This agreement ensures that we will continue to deliver engaging and popular Summit movie titles to consumers at our kiosks when they are first released at an affordable price.”

    The agreement provides redbox customers with greater access to Summit’s new release titles and popular catalog as well as the studio’s direct-to-DVD titles. Feature films include the highly popular Twilight, the first in the series of the thriller romance franchise, the hit film Knowing, and the upcoming The Twilight Saga: New Moon.

    “Having Summit’s films distributed through the redbox network provides consumers greater access to our broad range of titles,” said Stephen Nickerson, president of home entertainment at Summit Entertainment. “In addition, by redbox agreeing to destroy DVDs once they pass their rental life, the risk of low-cost, previously-viewed DVDs being sold into the market is lowered. We see this agreement as a win for both Summit and redbox.”

    The two year deal commences January 1, 2010. Redbox has agreed to destroy the Summit product once redbox removes it from the kiosk.

    About Redbox

    Redbox Automated Retail, LLC, a wholly-owned subsidiary of Coinstar, Inc. (Nasdaq: CSTR – News), offers new release DVD rentals through its network of conveniently located, self-service kiosks. Redbox is available at more than 15,000 locations nationwide, including select McDonald’s restaurants, leading grocery and convenience stores, and Walmart and Walgreens locations in select markets. For more information, visit

    About Summit Entertainment, LLC

    Summit Entertainment, LLC is a worldwide theatrical motion picture development, financing, production and distribution studio. The studio handles all aspects of marketing and distribution for both its own internally developed motion pictures as well as acquired pictures. Summit Entertainment, LLC also represents international sales for both its own slate and third party product. Summit Entertainment, LLC plans to release 10 to 12 films annually.

  9. Member [Join Now]

    Totally true about helping promote films. I hadn’t even heard of ‘Management’ until I was standing at the kiosk one night. Decided to get it because it was featured, and I LOVED it. Will probably buy it this week.

  10. Visitor [Join Now]
    dookie [visitor]

    It’s only a matter of time before Redbox rates shoot up. Probably shortly after Blockbuster folds.

  11. Visitor [Join Now]
    NYHusker [visitor]

    I hope Redbox tells the studios to go to hell, goes to Walmart, clears their shelves of new releases, and stocks their kiosks anyway. What the studios are doing is tantamount to trying to monopolize the video rental industry. Redbox has revolutionized the video rental industry…and the studios who aren’t onboard seem pissed they didn’t think of the idea first. I hope all the greedy pigs die, slow, painful deaths, clutching their wallets and check books in their hands.