The rumors are true: Walmart, the largest retailer in the world, confirmed today through a spokesperson that it has imposed “single purchase limits on new-release DVD movies to five copies for the first 28 days of the title’s release”. Target also appears to be placing quantity limits on new release DVDs the first week they are available. The combined restrictions of the two massive retailers on Hollywood Three titles Redbox is forced to purchase through retail channels affect around 40% of Redbox’s total offerings.
Melissa O’Brien, the Walmart spokesperson who confirmed the restrictions, declined to reveal whether studio interference had anything to do with her company’s policy. Said O’Brien:
“From time to time, we have placed purchase limits on products at stores so that they can be accessible and available to as many customers as possible,”
Ever the Redbox optimist, Merriman Curhan Ford analyst Eric Wold said that investors will be watching Coinstar’s upcoming fourth quarter results very closely for indicators of how these workaround issues are affecting Redbox’s bottom line, but the kiosk company should prevail. Said Wold:
“We remain confident that the normal maturation of the installed Redbox kiosk base (with ramping revenues and margins) will help offset any potential impacts from the workaround programs,”
Ralph Schackart, an analyst with William Blair & Co, commented that Walmart and Target’s purchase limitations should have a more negative impact on smaller, independent video stores. Said Schackart:
“This will be very tough for rental models that rely on retailers for physical purchases,”
Are Walmart and Target just doing what they feel is best for their customers by imposing these limits, Insiders? Or do you detect a whiff of Hollywood Three in these new policies? How much of a sting is Redbox going to feel from these quantity limitaions from major retailers? Will they just have employees make multiple “single purchase” trips? Give us your theories, conspiracy or otherwise, in the comments.
[via Home Media Magazine]