Redbox Agrees to 28-Day Delay on Warner Bros. Movies

A little over a month ago, DVD rental giant Netflix agreed to delay the availability of Warner Bros. movies until 28 days after their retail release to give Warner Bros. retail partners a period of exclusivity before the titles became available via Netflix. Now, DVD rental kiosk company Redbox has agreed to similar terms, inking a multi-year deal with Warner Bros. that will have them delaying the availability of Warner titles for 28 days after their retail release. The reasons Warner Bros. wants the delay are the same: as the retail market for DVDs declines, the studio wants to give retails and paid video-on-demand operators a window of exclusivity on the titles before they become available to the hoi polloi

Redbox (Walmart)

“The 28-day window for Redbox balances the economics of our relationship while continuing to offer great value to their customers,” said Warner Home Video president Ron Sanders, in a statement. “This accord establishes a mutually beneficial relationship that will foster an ongoing and productive partnership.”

The deal also ends a lawsuit Redbox filed against Warner Bros. in August 2009.

The upstart rental outfit Redbox sets up kiosks in key retail locations, and stocks them with up to 600 DVDs. Customers can rent a DVD for $1 per day, or buy used DVDs for about $7 Customers can also reserve titles for pickup at specific Redbox locations. Redbox had initially been acquiring DVDs through wholesalers rather than directly through studios; as studios caught on to Redbox, they believed Redbox was undercutting the rental market and pressured wholesalers to stop selling new releases to Redbox. News Corp then Universal also sued Redbox, and Redbox filed countersuits against all the major studios.

The new agreement with Warner Bros. means Redbox won’t be offering Warner DVDs during a period of exclusivity that Warner Bros. believes is key to sustaining its retail and rental businesses; however, it also means Redbox now has a direct relationship with Warner Bros. and will, in theory, have streamlined access to the studio’s content.