Movie Industry

by Mike Masnick

Filed Under:
delays, dvds, rentals

paramount, redbox, viacom

Paramount Says 28 Day Delay On Redbox Makes No Sense; Doesn't Cannibalize DVD Sales

from the good-for-them dept

While some of the Big 6 studios have been incredibly anti-Redbox, Viacom's Paramount has always been the most reasonable towards the DVD-rental kiosk provider. So it really comes as little surprise that Paramount has announced that, after testing delayed movie releases through Redbox it sees absolutely no reason to keep delaying such releases and instead will offer new release movies on Redbox at the same time the DVD goes on sale:
"There were two conclusions we came to," said Dennis Maguire, president of Paramount Home Entertainment. "There hasn't been a cannibalization of DVD sales from Redbox, and Redbox was allowing us to expand our business and ultimately make more money" than if the studio held back its DVDs to Redbox for a period of time.
Of course, this is exactly what many people said when studios like Warner Bros., Universal and Fox demanded the 28 day release, but it's nice to at least see Paramount actually looking at the data and realizing that Redbox isn't the evil destroyer of Hollywood that some of its competitors have made it out to be.

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  1. icon
    Hephaestus (profile), 16 Jun 2010 @ 9:24am

    Ripe for competition ....

    "... and receive a percentage of revenue from the rentals, as well as a guaranteed amount of space in each Redbox kiosk for its DVDs.

    Redbox estimated that it would pay Paramount $575 million over the life of the agreement."

    With the drain in income to RedBox from this deal it makes competition an option. Find out the specifics of the deal, cost per rental, time table if the cost per rental fees are reduced like they are with movie theaters, determine if there is a resale clause in the contract. Then turn around and rent at a price point they can not possibly compete with. Sell the used DVD's to increase your profits.

    Failure of RedBox and Failure of blockbuster kiosks in short order.

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