Fresh from its new release delay deal with Netflix, Warner Home Video is rumored to be in negotiations with erstwhile antagonist Redbox on a similar agreement. According to “sources close to the negotiations” consulted by Home Media Magazine, Warner and Redbox are not yet close to finalizing an agreement, but they are working towards an arrangement similar to the Netflix deal. Under the terms of the rumored new agreement, Warner would provide its new release titles to Redbox at a substantial discount, but only after a 28-day waiting period.
HMM conjectures that if such an agreement is ultimately reached by the two companies, chances are high that other studios would follow suit. The arrangement could also spread to brick-and-mortar chains, leading to a market where consumers would be forced to choose between purchase and piracy if they want to watch films the first month that they are available.
Hollywood is obviously hoping for a return to the heady days of the early 2000s, when disc sales represented a major source of revenue for studios. According to one studio executive, who spoke on grounds of anonymity:
“[Such an environment] would put the brakes on the rental market and give sellthrough an advantage that would hopefully get us back on track with DVD sales, buying us time to allow Blu-ray to catch up,”
The outlook is far from completely rosy, however. Redbox, which still has a standing lawsuit against Warner, may have more demands in exchange for its acquiescence than Netflix did. Merriman Curhan Ford analyst Eric Wold also feels that Redbox would probably only make such a deal with Warner if every other DVD outlet came to similar terms. Said Wold:
“If Redbox were to enter into a 28-day window, but consumers could still get those DVDs from the in-store segment … I’m not sure what would be worth doing that for Redbox, even if they were to receive a very significant reduction in the cost of those DVDs,”
Traditional rental stores such as Blockbuster and Movie Gallery might agree to a blanket new release delay, but smaller independent dealers likely would not. The First Sale Doctrine would allow such indie stores be the only rentailers to have street date new releases available—a significant advantage.
The general consensus from commenters on this site seems to be that most people are willing to wait one more month to rent films rather than feeling compelled to purchase them. It will be very interesting to see how Warner’s (and the rest of Hollywood’s) efforts work out. Insiders, where do you put the odds of Redbox making a Netflix-type deal with Warner? As always, we want your opinion.
[via Home Media Magazine]