More Redbox kiosks stock Warner, Uni titles on street
UPDATE: Analyst says most DVDs in kiosks checked out by weekend
By Danny King -- Video Business, 12/22/2009
DEC. 22 | PHYSICAL: Redbox's workaround agreements to get releases from studios including Warner Home Video and Universal Studios Home Entertainment on street date may be working better than a few months ago, according to one analyst who covers the company. Or maybe not, if you ask folks who run independent video stores.
Redbox kiosks have been selling out of their titles by the weekend.
The Coinstar unit last week stocked new DVD releases such as Warner's The Hangover and Universal's Inglourious Basterds on their Dec. 15 street date in most of its kiosks, though the machines didn't have enough copies to keep the DVDs available to customers through the weekend, Merriman Curhan Ford analyst Eric Wold wrote in a note to clients yesterday. Wold maintained a "buy" rating on Coinstar.
Hangover and Basterds were both stocked in more than 85% of Redbox kiosks, said Wold, citing his survey of more than 100 kiosks in 30 U.S. markets. By last Friday, all of the Hangover and Basterds copies had been checked out in all but 11% and 4% of the kiosks, respectively, Wold said.
"We know that copy depth on workaround titles is going to be lower than for titles [Redbox gets] through distribution agreements," Wold said in an e-mail. "But in my discussions with Coinstar, they stress their workarounds are centered around getting as many copies in as many kiosks by Friday night."
Redbox spokeswoman Laura Dihel said the company does not comment on analyst reports but confirmed that it does factor in box-office revenue in title decisions.
Warner, Universal and Fox have taken issue with Redbox's $1 a night rental fee and imposed a delayed window of 30 days or more for their titles in kiosks. Redbox is suing the studios but has developed other methods for stocking the studios' DVDs. Warner, Fox and Universal together account for about 40% of the rental market, while Redbox is getting street-date titles from like Paramount Home Entertainment, Walt Disney and Sony Pictures Home Entertainment.
Still, questions remain whether Redbox is putting one copy of titles such as Hangover or Basterds in their machines or 10, say both Wold and Jon Engen with Video Buyers Group, whose 1,700 independent video-store owners compete directly with Redbox. VBG said in October that less than 1% of Redbox kiosks were carrying Warner’s The Orphan and Fox’s Ice Age 3: Dawn of the Dinosaurs on street date, with that figure still hovering in the 5% to 20% range later in the street-date week.
As for last week, availability for Hangover improved to 11% of Redbox kiosks last Friday from 1% on the Dec. 15 street date, while Basterds rose to 12% availability from 1%, said Engen, citing his organization's checks of more than 500 kiosks in 25 states.
"We've been tracking all three studios since October," Engen said. "We're saying that the availability and workarounds are working less."
