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nelson_simpsonsSchadenfreude is a fantastic word we’ve borrowed from the Germans that refers to deriving pleasure from the misfortune of another. Enthusiastically echoing comments we heard from analyst Richard Greenfield the other day, the Video Buyers Group (VBG) is claiming that Redbox is failing in its attempt to work around the delays on new release titles that have been imposed on it by the Hollywood Three.

VBG president Ted Engen recently sent a memo dripping with schadenfreude, stating that through the physical and electronic monitoring his group has performed on more that 500 Redbox kiosks, they have discovered significant shortages of new release titles from Fox, Universal and Warner.

According to Home Media Magazine, the VBG’s results from the monitored kiosks are as follows:

“Dec. 1 releases Terminator: Salvation and Night at the Museum: Battle of the Smithsonian were available in just 2.4% of kiosks monitored. Four Christmases and Funny People were found in 21.2% and 14.7% of kiosks, respectively, eight days after release. . . Other titles such as Bruno and My Sister’s Keeper were available 31.6% and 15.5%, respectively,”

Commenting on Redbox’s allegations that retailers such as Walmart, at the behest of the studios, have been limiting the number of copies of each delayed title Redbox representatives are allowed to purchase, Engen had the following to say:

“They blame this on the studios, but common sense tells us when retailers are using these titles as a loss leader they don’t want to watch hundreds of copies of Night at the Museum walk out the door and take a loss on all of them,”

Insiders, as we’ve asked before, are you noticing major shortages of new releases from these studios at a kiosk near you? If so, how is it affecting your rental habits? Do your experiences line up with VBG’s claims? Did you step in any schadenfreude while reading this story?

[via Home Media Magazine]

37 Responses to “VBG: Redbox Failing to Beat Studio Delays”

  1. Visitor [Join Now]
    Ennui [visitor]

    Yes, have noticed the delays and here’s how it works out. The studio marketing push wanes out before the title becomes available, my family loses interest in the title, we play video games to fill the entertainment void. Delaying release to any outlet just tosses your marketing expense of (marginal in the first place) titles out the window.
    Even though the studios would like to think we’ll just buy if we can’t rent it, the truth is, outside of a few titles, they have nothing I’d like to own. I will rent a title to kill a couple of hours, but most of this stuff is a view once and regret wasting my time kinda thing, not something have to have for the rest of my life. Wouldn’t buy a marginal title, I’d just wait for it to appear on the b and c list cable channels and (if even) then watch. Keep pissing away your marketing dollars studios, hopefully it will weaken your studio enough to oust the people clinging on to the old way.

  2. Visitor [Join Now]
    Mike [visitor]

    The studios are crazy. By asking Walmart or which ever retail not to sell the DVDs to Redbox will just delay the inevitable. People don’t wan to buy DVDs because there are no memorable movies to buy. Yes, they maybe able to delay to movies to show in the Redbox kiosk. That may stop me from renting that day, but I think most people that rent from Redbox will wait for the title to become available. If people waited til now to see a titile a few more days will not make a difference.

    • Member [Join Now]
      mouthsmasher [mouthsmasher-2]

      I fall under that category. If the movie I want isn’t there, I just wait until it is. Just because it’s not there doesn’t mean I’m going to go buy the movie at full price or rent it from somewhere else.

    • Visitor [Join Now]
      becky bogdin [visitor]

      My family is in this category as well. We’ll wait until redbox has it available to rent. We don’t go to the box office, our children are to small to enjoy it. After the rental, if we like the movie, then we’ll buy it. However, I don’t want to spend the $4 that others charge to rent it either, one night at $1.00 per night is plenty.

  3. Visitor [Join Now]
    Brett [visitor]

    There is always a shortage of new releases when they are first released. The studios may be limiting redbox, but this doesn’t deter me from renting from them. I expect a new release to sometimes be hard to come by and don’t mind waiting one more week for demand to go down.

  4. Visitor [Join Now]
    Feste Ainoriba [visitor]

    Redbox charges more per night than Blockbuster or Hollywood video. But they allow me to securely reserve a movie at convenient locations for a single night.

    Blockbuster is deep in debt to the studios and so the studios are trying to prop them up by anti-competitive marketing schemes. Brick and Mortar stores are horse drawn carriages in the day of automobiles.

    All redbox wants is access to the same wholesale volume price structures that the studios give to other independent video rental businesses. What is wrong with that?

    I do not like industries that employ anti-competitive tactics like those employed by the movie industry. The only legitimate control the studios should have over their products is the price THEY charge for the product. Join me in sending the studios a powerful message: do not bow to their pressure to get you to rent somewhere else….just wait patiently until they are available at redbox. Refuse to buy any movie until after it is released at redbox. If you like redbox’s business model, then take a solidarity stance with them. It won’t take long.

    When independent video rental businesses sued the studios in 2002 for refusing to sell to them on the same terms they were selling to “preferred” retailers, the studios made the same lame arguments then. In the end, they caved and settled rather than face a full antitrust hearing in front of a judge.

    • Visitor [Join Now]
      Feste Ainoriba [visitor]

      But, if you just can’t wait until the title is available via redbox, and end up renting it from Blockbuster or Hollywood video, at least keep the video out for the entire period that you paid for – don’t turn it back in early. (Oooohaahaahaa).

    • Visitor [Join Now]
      The [visitor]

      If you can prove that Blockbuster is really in debt to the studios, the Redbox lawyers would like to know that info because it gives the studios a motive to be non competitive.

      Please tell us how you know that and send some data / links.

      • Visitor [Join Now]
        Feste Ainoriba [visitor]

        Can’t prove the exact number, but it should be discoverable in the case.
        See the following article that quotes market analysts is saying that as of March, Blockbuster was around $900M in debt.

        Later in the article, they give an estimate that somewhere less than half of this (or around $450M) is debts to the studios. Since March, Blockbuster has continued to bleed. The last quarter they posted a $113M dollar loss – twice as much as the same period the prior year – so the debt is increasing.
        The reason it is so hard to divine is because blockbuster and the studios hold the value as privileged. However, RB’s lawyers should have no problem getting a court order to reveal the details once they argue that the studios’ rental revenue sharing link to discounted wholesale pricing effectively constitutes an active studio presence in the rental business via agents and that the discount constitutes a market subsidy that independent competitors can’t access (without selling their independence).

        The lack of definitive data showing the exact revenue-sharing default should not lead anybody to conclude that that blockbuster is not in debt to the studios. They’ve been operating at a rapidly increasing loss for several quarters. In a negative cash flow situation, it is impossible for them to be PAYING THEIR DEBTS because they have no cash. I did look at their annual report from last year and found a debt titled “Rental Revenue Cost” that was a few hundred million. I’m not a CPA, so can’t tell you that this cost entails all of their studio debt or whether is includes debt to others too. But it is clear that they have a large, unsatisfied debt to the studios – the only question is “how large?”

  5. Visitor [Join Now]
    store owner [visitor]

    Being a store owner, redbox not getting the new release movies at the same time helps me out alot. I do buy twice the amount of copies now, And I’m sure I’m not the only store doing that. After 3 weeks we sale them for $8.00 so I think this is going to help the studios. Also Redbox may have 50 or so different movies where we have over 7,000 movies, New release are $3.99 for 5 days and the old ones are $1.49 for 5 days cheaper than Redbox and where you can get to talk to someone in person if you have something you want to know about the movie, you dont have to give us your credit card number you can pay cash. As far as the price we pay It’s around $19.00 per copy. Thanks Dan

    • Visitor [Join Now]
      foobar [visitor]

      Dear Store Owner:
      If I want to know something about a movie, I will go online to :
      Hope your business model is not the same as Blockbuster…better sell it while you can and buy up some CSTR shares.

      • Visitor [Join Now]
        John Small [visitor]

        CSTR shares are currently falling due to the failing business model that Redbox continues to pursue. It is a bad investment until they raise their prices and dump Mitch Lowe.

        • Visitor [Join Now]
          Feste Ainoriba [visitor]

          No, the drop in recent share value (since October) is coupled with the big three studio’s implementation of anti-competitive price-fixing tactics. That caused a increase in the P/E ratio and THAT is what is affecting the stock price.

          Their model isn’t broken, they are being strangled by unfair trade practices.

          As I point out to you again and again: Blockbuster’s per night rental rates are lower than redbox’s; and redbox has lower infrastructure costs. The difference is that 1) redbox is being forced to buy at higher prices (the studios are in bed with blockbuster via revenue sharing agreements and sell product to them a significantly lower costs than they sell to non-affiliated rental companies) and 2) redox is being forced to buy inventory using footsoldiers. Those factors combine to drive significantly higher cost of buying inventory.

          • Visitor [Join Now]
            John Small [visitor]

            You know what you are saying is incorrect. Just because you keep repeating it does not make it true.

            Redbox can have access to the same prices as everyone else either through purchasing or through revshare.

            Neither options allows them to make a profit at a $1.00 a day rental level. Coinstar’s quarterly numbers speak for themselves.

            Redbox has been subsidized to this point. Training wheels are off now. If they can’t ride on their own then they will fall by the wayside.

            Step one: Raise first night rental to $2.00

            Step two: Fire their CEO.

            Step three: Make nice with the studios

            This simple formula would make Redbox a successful and profitable company.

          • Member [Join Now]
            lakrow [jbromert]

            “Step three: Make nice with the studios”

            Ah, yes, selling your soul/giving up your freedom is always easier in the short term. Look at how well BB is doing.

          • Visitor [Join Now]
            Sirta [visitor]

            John, your repeating of desperate rants certainly doesn’t make it true. The fact is the studios are being greedy: the quality of movies has fallen and the majority of people could care less if the studios can invest less money in producing the crap they are making these days. This is part of the reason why more and more people are downloading movies illegally before they are even released to theaters. Having the lowest practical rental prices, RedBox just might be their only chance.
            There are hundreds of terrific movies made years ago. As far as I am concerned, there could be no new movies released ever, I won’t regret that a bit.

      • Visitor [Join Now]
        store owner [visitor]

        MY business is going up. CSTR price is going down! You think people would use something called “rottentomatoes” to see if they would like a movie or not. That sounds smart

        • Visitor [Join Now]
          FooBar [visitor]

          obviously you are someone who does not keep up with technology and trends, aka Blockbuster

        • Visitor [Join Now]
          wackawacka [visitor]

          I’ve been using for years to help decide which movies to rent. It also helps me find obscure titles that generally aren’t available at Redbox or the local video store. I don’t always agree with the critics reviews, but it’s a good place to start when trying to decide what to rent.

          But where to find those obscure but high quality indy or foreign titles that the big studios no longer make in favor of dumbed down fare? That’s where Netflix enters in. Many of those titles are available from Netflix online and now that I have a Blu-Ray player that streams Netflix in High Def, both Redbox and my local video store will be seeing less and less of me!

          I was going to use Redbox as a way to supplement my movie habit so I could watch new releases, but it looks like the greedy and idiotic studios are throttling Redbox at the moment. Do they really think people are going to BUY a movie rather than rent it just because it’s being delayed by a couple of weeks? I think not.

          The days of movie sales are coming to an end. Redbox won’t be around forever, either, or it will be in a greatly diminished form once online streaming really comes to the forefront.

    • Visitor [Join Now]
      UBM [visitor]

      Knowledgeable Brick and Mortar video Stores are like needles in a haystack.
      I have gone to Family Video, Hollywood Video, and other big name chain stores,
      and aside from pushing the latest Hollywood blockbuster, the chain
      employees just care about moving people through the line and out the door.

      IMDB, RottenTomatoes, Flixster, Yahoo! Movies, Dark Horizons….the list
      of film commnuity websites is large and long and I know more about
      what I’m looking for before I set foot into a store than the guy / gal
      behind the counter, so the only thing a B&M store can do for me
      is be competitive in pricing…$1.49 for catalog is ridiculous compared
      to $0.08 a movie on cable ( Encore, USA, More Max, TMC, etc) .
      Lower the cost of your catalog to match Family Video ( 50¢ a night)
      and I’d rent from you. Redbox has just exposed the fallacy
      the studios don’t want you to see…that Movies are worth $1 a night.
      Forget packaging, and pretty boxes, and shiny covers….
      We only want the movie, and at most, it is worth ONLY $1 a night.

      Now a days, if I was to run a video store, I would set up
      search stations in the middle of the store ( about 6 computers like
      the local library) all set to either imdb or rotten tomatoes, and just put
      the discs out in cases like redbox, and let people come in, search for
      a movie, find the shelf it is on, and check it out for $1 a night.
      The customer is MUCH MORE SAVY than in the late 80’s early 90’s,
      which many stores still think they operate in.

  6. Visitor [Join Now]
    foobar [visitor]

    If I wanted to watch a movie when it just first released, I go the movie theater.
    If I think its a good movie (say Borne Identity) and its worth to be in my collection, I wait until the price is lower than the price I paid for the movie ticket….I will buy a pre-viewed DVD from Blockbuster for $5.

    Majority of Redbox renters are not sweating to view a newly released movie, they are renting a video for its entertainment factor.

  7. Visitor [Join Now]
    Krista [visitor]

    I hardly ever buy a movie full price. I’m a fan of Wal-Mart’s $5 selection. And when it comes to the delay on New Releases, I doubt there will any change in my renting habits. Why pay $5 to rent a New Release, when you can ‘buy’ movies for the same price? I’ll buy those and wait to rent cheaper than Blockbuster, especially when I don’t know if I’ll like it or not!

  8. Member [Join Now]

    This crap limiting Redbox to only buy so many copies from Walmart has antitrust written all over it. Studios, get over yourselves and realize that RB is the future of DVD renting and BB and VBG are holding on to a model of the past. Also, until a movie is in the RB or available on Netflix, I will wait patiently. If I can’t get it on day one, so what? I’ll get it eventually, especially since I don’t go to the theater and if I can wait that long, then what’s a few more days or an extra week gonna hurt?

  9. Visitor [Join Now]
    Hugh Manity [visitor]

    I’m not sure if anyone remembers this, but a long time ago 321 Studios was in a heated battle against the studios because of DVD X Copy. It was their argument that you had the right to make a backup of any DVD you bought. It was the argument of the studios, and the courts agreed, that when you “buy” a DVD you don’t own it. The studios do. All you’re “buying” is a license to view the movie in the comfort of your own home. The studios, through their kind generosity, supplied you with a copy of the movie in the form of a DVD with which you could make use of your license. If something happened to your original copy, you need to “buy” a new license, that just happens to come with a new copy for you to enjoy. I’m not advocating piracy here, just pointing out that, all those DVDs that the studios sell you… you don’t really own them.

    • Member [Join Now]
      lakrow [jbromert]

      You must be young – that still seems pretty recent to me.

      It was decided that you are legally allowed to make a backup copy of your DVD, but that you weren’t allowed to give or be given the software to do it. So, if you couldn’t figure out the copy protection on your own and program up the software to copy a DVD then your right to have a backup was essentially denied. That seemed like a handy trick for the studios to keep you from backing up your DVD so you’d have to buy another when it didn’t play anymore – all in the name of anti-piracy, of course. A lot of good it did… there’s still plenty of free and paid software out there letting you LEGALLY backup your DVDs and the studios seem to have given up the fight (smart move, actually).

  10. Member [Join Now]
    Mauijazz [mauijazz]

    I WANT them the day there out.. If I have to make the trip to BB ( Blockbuster ) I will … I loved the idea of Redbox but if them Cant get me the New Releases ON TIME … My Green Backs have to go somewhere else .. I Just hope this gets FIXED Soon …. Love the system hate the BS …

  11. Visitor [Join Now]
    UBM [visitor]

    I am in the wait for it camp.
    Pricepoint is the #1 thing for me.
    The last good movie I had to own was “The Dark Knight”
    and before that it was “LOTR: Return of the King.”
    Hollywood doesn’t make a lot of movies worth $15-20,
    but they make tons of movies worth $1.

    If the studios delay for everyone 45 days of rental,
    When Wal-mart gets overstocked with titles they can’t sell,
    the practice will stop. The studios are shooting themselves
    over an old business model, and it’s up to us cosnumers
    to show them the fallacy of their ways.

    I still have cable, and I have the internet…I’ll have plenty
    to watch while I wait for Redbox to get its titles.

    I waited for 6 years for someone to get the the DVD rental market right,
    I can afford to give Redbox my support and wait to rent from them
    when they get the movies.

  12. Member [Join Now]

    as far as getting these new novies from warner fox etc … i appears that redbox has a 5 or so DAY delay in getting them to the redboxes here in MD. a week later, they are in at least 4 or 5 of the 30 redboxes within a 10 miles radius. this as far as im concerned is no problem at all.

    ONLY a fool would pay $18 to buy the dvd to see it 5 days earlier!
    i have 150 dvds waiting to be watched that i havent got to.
    60 days wouldnt be an isuse!

    good luck, warner, fox, etc.
    btw, the best studios are sony and disney by far!
    they adopted blu-ray 1st and they are not participating in this stupidity!

    and one last tihing, if a family only watches a few movies a month (limited time)
    or has limited $$$, and they decide they want to see a movie that evening and they walk by a redbox or any rental place and select a NEW movie, and the latest warner release of let’s say, harry potter isnt there (delayed), then it is likely that that movie wont be watched for quite a while. with limited time to watch movies and 660 movies release each year, it is extremely important that each release targets each every time slot every person has available for watching a movie.

    seems to me that delays only push out your movies to a later date that targets time slots starting at that date. other studios (such as sony and disney) will easily fill those earlier time slots with quality material for rent. your loss is their gain.


  13. Member [Join Now]
    buck wherry [buck-wherry]

    i will wait, for a dollar, i will wait, dont need to see it that day, it can wait

  14. Visitor [Join Now]
    Mudkips lurve Redbox [visitor]

    One buck is alls I want to pay. Go Redbox Go!

  15. Visitor [Join Now]
    dmv76 [visitor]

    If redbox doesnt have it, i will wait till they do. IF I CANT ever watch a movie, I’LL LIVE.

  16. Visitor [Join Now]
    Jackie [visitor]

    If I can’t get it through redbox, I order it through netflicks, whichever gets to my house first is the one I watch, I almost never buy dvds.

  17. Visitor [Join Now]
    Eat My Shorts [visitor]

    First, does Video Buyers Group conduct randomized studies? If so, what’s the margin of error and the p-value? Please, us statisticans want to know becuase I assure you that Video Buyers Group is putting out stats that suggest Redbox is failing. If that were true, Redbox would be retrenching in its expansion plans. But, truth be told, they aren’t. They are still rolling out 1,000 boxes a month and they have 1) cut new deals with smaller studios 2) have been testing video games 3) can always offer a revenue share on blu ray movies if they demand allows them to charge a premium 4) basically, have a lot of options to their business plan.

    The studios HAVE to deal with Redbox. Redbox is becoming one of the biggest buyers of dvds. Netflix is relying more on streaming. The consumer isn’t collecting physical media any more (ie records, dvds, magazines etc). Walmart has stated it will rely less on dvd sales. Thus, the studios WILL capitulate when they realize Redbox is their biggest customer.