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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.
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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?
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As always, we want your opinion.

[via Home Media Magazine]

19 Responses to “Warner/Redbox Rumored to be Negotiating New Release Deal”

  1. Member [Join Now]

    I am curious as to what Warner thinks the percentage of renters who will cave and buy the DVD in the first 28 days. My gut feel is that it would be less than 1%. I personally know of no one who will buy DVDs instead of renting them. I think they may be in for a rude awakening. They are trying to bring the past back and that’s not going to happen particularly in the light of the various delviery methods available. Who in their right mind is going to shell out $10 to $25 for a DVD and then buy it again later on Blu-Ray. And now streaming is coming of age. The consensus for most people is buy only childrens movies that the kids watch a bizillion times. Of course, if you have netflix and can stream those movies to your TV, you wouldn’t need to buy it. Then again, Disney is very crafty about keeping the supply of their older movies low and they probably won’t be available for streaming.

    To answer your question, I would guess that their eventually would be an agreement, but s you say, redbox can’t afford to let Blockbuster offer new releases in the first 28 days when Redbox can’t get them.

  2. Visitor [Join Now]
    Vernon Dent [visitor]

    rebox would be foolish not to sucker studios into a 28-day grace in exchange for lower media acquisition costs.

    Consumers are not stupid. The studios are caught between first-sale issues and losing retail sales. Rentals have no effect on retail sales.

  3. Visitor [Join Now]
    slidecage [visitor]

    people will just rent them at other video places and skip the 28 day wait

  4. Visitor [Join Now]
    rb [visitor]

    I still feel that a 28 day delay won’t be that harmful to Redbox as long as other lower-price rental places (like Netflix) abide by the same delay. I don’t have a Blockbuster anywhere near me, but I do have a similar-priced local video store– Hollywood Video. Last week I went in the HV to check out exactly what they are charging now for new releases–$4.89!!! No thanks! I would have gone to a $5 matinee when the movie was in town instead of paying $5 to rent it months later. I agree with one poster who suggested Redbox customers will just get conditioned to a 28 day delay as long as their rental price remains a low $1. As far as little kids having tantrums because their parents aren’t getting them a new release on day one….JUST DON’T TELL THE KIDS THE RELEASE DATE. Adults barely know the dates when movies are to be released on dvd. Any Disney, Pixar movies etc, just tell the kids it’s just been released to rent–even though it’s 28 days after the actual release date :-)

  5. Member [Join Now]

    Here’s the real problem. Interest in buying titles is shrinking faster than it used to … after a month, sales on a popular title shrinks to the very low 5 figures. I think discouraging those who rent before buying isn’t really a good way to shore up the sales figures. So when this sales window fails to stem the sales slide, what will the studios conjure up next?

    • Visitor [Join Now]
      Mike [visitor]

      What surprises me is that studios haven’t started releasing Blue Ray discs earlier than DVDs. This would get more people purchasing Blue Ray players now that they are affordable and since the discs sell at a higher price point, I am sure the studios make more off a Blue Ray sale than a normal DVD.

      • Visitor [Join Now]
        SeanDavid [visitor]

        Blu Ray players are not affordable yet. They may be to you, but hell, they were always affordable to someone. To the average family living paycheck-to-paycheck, they are still out of our price range. It’s a little different for each person, but I personally won’t even consider going blu until the players are $50 or less. Not to mention the fact that I need to replace my TV as well, which will not happen until HD tvs are about what normal tvs cost now. I”m not paying potentially well over a thousand dollars just to have a slightly more clear picture.

        • Visitor [Join Now]
          Mike [visitor]

          Well I consider $100 to be affordable. Even for a DVD player, I like to pay around the $75 mark. I find that they last longer and have less playback issues that you can find with the lower end players.

          I can see your point about the TV though, definitely need a LCD TV with at least 720p but even those are starting to be relatively cheap. A 32in 720p TV is not bad in the price department.

          I sympathize with your paycheque to paycheque scenario, I am pretty much in the same situation for the next 6 months myself.

    • Visitor [Join Now]
      snakedoc [visitor]

      I agree discouraging rentals is not going to increase sales. New DVD prices are going to have to come down in price. I rent until a DVD that I really want comes down below $10.00. With HDMI up conversion with the new TV’s and Blu Ray players who needs to buy a Blu Ray disc for 20 plus dollars. Not me, no way in the world will I pay that much for a disc. If the studio’s wait for me to buy at the existing prices they will go broke. If everyone felt the same the prices would come down in a hurry. It only costs them a couple of bucks to make a DVD.

  6. Visitor [Join Now]
    Sal [visitor]

    For a buck, at redbox I’ll just wait the 28 days for any new release, There are plenty of other good movies that are already out there to keep me busy in the mean time

    • Visitor [Join Now]
      Gene [visitor]

      I rent many movies from Red Box, primarily because both my wife and I are hard of hearing, and need a “Captioned” movie. Theyare also very convenient with manylocations near me. I’ll gladly wait 28 days to view a new release.

  7. Visitor [Join Now]
    Rebecca [visitor]

    If I have to wait six month to a year before any new DVD movie is released, then what is one more month? Duh, get your heads out!!

  8. Visitor [Join Now]
    FooBar [visitor]

    …more signs indicating a possible Redbox Netflix partnership in the near latest releases from Redbox, rent other hard to get stuff from Netflix!
    Wait 28 days, and then everything is new release!

  9. Visitor [Join Now]
    SeanDavid [visitor]

    I WILL NOT buy a dvd just because it’s out but I can’t rent it yet. Most of the time I will wait (unhappily, by the way). There are some titles once in a great while that I will not be able to wait 28 days for. Those I will (again, unhappily) rent from a more expensive B&M store. But that’s it. I only own like 5 dvds so trust me, I will not buy.

  10. Member [Join Now]

    At the rate Hollywood is putting out massive quantities of manure, i’ll wait an extra 28 days to be disappointed by the latest overrated, bloated “blockbuster”.

  11. Member [Join Now]

    If anything this is just going to promote piracy even more so.

  12. Visitor [Join Now]
    Christie Marquitz [visitor]

    He’s truly so adorable!