Paramount in trial deal to supply DVDs to Redbox

Aug 26, 2009

(AP) -- Movie studio Paramount Pictures is following the lead of Lions Gate Entertainment Corp. and Sony Corp. by agreeing to supply films to $1-per-night DVD rental kiosk company Redbox.

Paramount Home Entertainment Inc. and , a subsidiary of Bellevue, Wash.-based Coinstar Inc., said Tuesday they have begun a trial licensing program through which Redbox will be able to stock its kiosks with Paramount Pictures DVDs on the day they are released for retail sale and rental, through the end of the year.

Los Angeles-based Paramount, which is owned by Inc., will get detailed DVD rental information from Redbox, which the studio will use to determine the worth of the program. Paramount will be able to extend the deal through 2014, with an option to opt out after two years.

As part of the deal, Redbox has agreed to destroy any Paramount DVDs it removes from its rental kiosks.

In a statement, Redbox President Mitch Lowe called the trial a "positive step with Paramount."

"The agreement ensures that our customers will have increased access to some of the biggest titles of the year," he said.

Coinstar said in a regulatory filing Tuesday that Redbox estimates it would pay Paramount $575 million if the deal runs through 2014. It said that Redbox, which has kiosks at more than 15,000 locations across the country, plans to license and buy DVDs from Paramount that will represent about 18.5 percent of the total discs it licenses and buys this year.

The deal comes two weeks after Lions Gate agreed to supply Redbox with DVDs on the same day they are offered for retail sale, from Sept. 1 through Aug. 31, 2014, according to a regulatory filing.

In that filing, Coinstar estimated Redbox will pay Lions Gate $158 million over the life of the deal. Lions Gate, too, can pull out after two years.

Coinstar said in July that it had penned a five-year, $460 million deal with Sony's movie division.

Other Hollywood studios, such as News Corp.'s 20th Century Fox and General Electric Co.'s Universal Pictures, have moved to cut off supply to Redbox unless it agrees to delay rentals until more than a month after DVDs are available for sale, in the hopes of preserving demand for higher-priced purchases.

Last week, a federal judge in Delaware rejected a request from Universal to drop a suit filed by Redbox that stemmed from its demand that new releases be kept out of Redbox's kiosks for 45 days after they go on sale. Time Warner Inc.'s Warner Bros. has also insisted on an availability delay and it, too, is embroiled in a legal fight with Redbox.

Even if studios cut off supply, Redbox has kept its kiosks loaded with new-release DVDs by buying through retailers.

©2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explore further: Out-of-patience investors sell off Amazon

add to favorites email to friend print save as pdf

Related Stories

Warner Bros. to impose delay on Redbox, others

Aug 14, 2009

(AP) -- Warner Bros. on Thursday joined studios Universal Pictures and 20th Century Fox in demanding shipments be delayed to $1-per-night DVD rental kiosks like Redbox in an attempt to preserve demand for higher-priced disc ...

Redbox sues 20th Century Fox in DVD dispute

Aug 12, 2009

(AP) -- DVD rental kiosk company Redbox said Wednesday it has sued 20th Century Fox over the movie studio's attempts to delay its titles from appearing in Redbox vending machines.

Whither Redbox? Hollywood studios are conflicted

Aug 07, 2009

(AP) -- Hollywood studios are split over Redbox, the $1-per-night DVD rental kiosk company: They could supply it with cheap wholesale discs and ride its massive growth, or starve it in the hopes of preserving ...

Redbox's machines take on Netflix's red envelopes

Jun 20, 2009

(AP) -- With more subscribers than ever flocking to its DVD-by-mail service, Netflix Inc. is one of the few companies to prosper during the worst U.S. recession in 70 years. Yet Netflix CEO Reed Hastings still has something ...

Blockbuster to offer movies on Motorola phones

Aug 18, 2009

(AP) -- Blockbuster Inc. plans to offer movies that can be watched on Motorola Inc. cell phones. It marks the struggling rental company's first step into mobile video and is its latest effort at chasing down the customers ...

Paramount and Xbox movie showcase deal

Apr 12, 2006

Paramount Pictures and Microsoft's Xbox launched Wednesday the Xbox Movie Showcase cross platform marketing program between the movie studio and Xbox Live.

Recommended for you

Out-of-patience investors sell off Amazon

23 hours ago

Amazon has long acted like an ideal customer on its own website: a freewheeling big spender with no worries about balancing a checkbook. Investors confident in founder and CEO Jeff Bezos' invest-and-expand ...

States ascend into the cloud

Oct 24, 2014

Seven years ago, the state of Delaware started moving computer servers out of closets and from under workers' desks to create a consolidated data center and a virtual computing climate.

Microsoft drops Nokia name from smartphones

Oct 24, 2014

Microsoft said Friday it was dropping the Nokia name from its Lumia smartphones, rebranding following the acquisition earlier this year of the Finnish group's handset division.

Amazon's loss makes holidays a question mark

Oct 24, 2014

Amazon's trademark smile icon is becoming more of a grimace. The world's largest online retailer reported a wider third-quarter loss than analysts expected and gave a disappointing holiday forecast.

User comments : 0