Warner lines up with Fox, Uni on kiosk window
By Susanne Ault -- Video Business,08/13/2009
AUG. 13 | PHYSICAL: Warner Home Video officially lined up with 20th Century Fox Home Entertainment and Universal Studios Home Entertainment in pushing a later release window for DVD rentals through vending kiosks.
Warner said today that it will sell its titles directly to the kiosk channel, led by Redbox, beginning in October and will offer Warner titles 28 days after their general market release. The studio also will sell directly to the mail-order subscription channel, which Netflix dominates, but Netflix and others in the mail-order rental business will be offered titles at their initial release or with a 28-day window depending on the terms each retailer chooses.
The studio will no longer allow wholesalers to sell to the kiosk or mail-order rental channels.
Warner has a longstanding relationship with Netflix but is believed to be renegotiating its deal under these new terms. “We will evaluate the current proposal and discuss it with them,” said a Netflix spokesman.
“Redbox was informed today that Warner Bros. will take action to limit our consumers’ timely access to new release DVDs,” Redbox president Mitch Lowe said in a statement. “Redbox will continue to stand behind our customers and our commitment to providing convenient, affordable access to new release DVDs from all studios including Warner Bros.”
Warner insists that the choices it’s rolling out for kiosks and mail-order subscription services will advance studio and retail goals.
The studio “will be in discussions with both kiosk and mail-order subscription vendors, offering business options that will allow all parties to grow their respective businesses,” it said in a statement today.
Additionally, Warner is telling wholesalers they they cannot buy or sell any used Warner discs.
Kiosks were largely responsible for an 8.3% growth in consumer spending on movie rentals in the first half of the year, according to Rentrak, while DVD sales fell more than 15%. But some studios fault the kiosks for at least part of DVD sales drop-off. Studios are strongly opposed to kiosks’ $1 pricing and the large volume of used discs they create for sales, both of which the studios believe undercut new DVD sales.
Redbox, which offers $1-per-night DVD rentals through more than 17,000 kiosks in the U.S., is suing both Universal and Fox for alleged antitrust violations after those studios tried to impose 45- and 30-day delays, respectively, on the kiosk operator.
Not all studios oppose Redbox, however. Sony Pictures Home Entertainment and Lionsgate recently signed direct distribution agreements with Redbox for titles to be delivered the same day as their general release. Walt Disney Studios Home Entertainment also sells its titles to Redbox, though not directly, with the provision that it not sell its titles used.
Blockbuster CEO Jim Keyes addressed the Warner announcement in the rental giant’s earnings call with analysts today. Though Blockbuster is on track to have 500 Blockbuster Express kiosks deployed by partner NCR by the end of the month and 2,500 by end of the year, Keyes agreed with Warner’s tactic, calling it “complementary to Blockbuster’s multichannel approach.”
“For Blockbuster, it represents a competitive opportunity” because between Fox, Universal and Warner, 60% of new releases will have a delayed release window for kiosks, he said. Translation: Big Blue would rather have customers pick up a higher-priced rental in its stores than a $1-per-night DVD, even from its own kiosks.
“One dollar for viewing is not a sustainable industry model,” Keyes said.
Additional reporting by Danny King
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| Submitted by: | Sherry L. Mason (smaon2@snet.net) 8/15/2009 10:11:33 AM PT |
| Location: | Niantic, Connecticut |
| Occupation: | Owner of Video World of Niantic |
As a small independent video store I stand behind any studio that limits kiosks that rent new releases for a dollar. This not a sustainable rental rate as both the studios and independents are unable to get the neces-sary income to cover expenses. Studios invest millions and deserve the right to recover those expenses and other renta outlets with employees (who certainly offer better customer service that a vending machine) are unable to compete and stay in business. I work very hard and rarely cover my expenses and if the dollar rentals continue I will be forced out of business adding to the unemployment figures. I look not for pity as I love my little store and my customers and I do work two full-time positions other than the store to cover my business and personal expenses but I would like to be able to at the very least remain in business and be offered the opportunity to be competative. The studios do not cater to the small business on which this country was built so why cater to the large corporations and allow small businesses to become extinct in this particular industry.
| Submitted by: | Joe Smith (Alias) 8/14/2009 4:11:24 PM PT |
| Location: | Myanmar |
| Occupation: | Rentailer |
Redbox has (had) been buying their dvd's from wholesale suppliers Ingram & VPD at a reduced price. Ingram & VPD then repurchased the used copies and then resell them as used. VPD currently is sitting on over 1.5 million used DVD's that they can't get rid of. They started off trying to sell them at a $5.00 & $6.00 price point, but now some are listed for as little as $1.00.
| Submitted by: | Patti 8/14/2009 12:42:25 PM PT |
| Location: | IA |
| Occupation: | Video Store owner |
Oops..sorry...meant to say....the reason that Redbox (not Netflix) can't sell the movies is that they don't own the dvd.
| Submitted by: | Patti (mtv@wctatel.net) 8/14/2009 12:38:53 PM PT |
| Location: | Iowa |
| Occupation: | Video Store owner |
I hope that Universal and Fox join Warner in including Netflix in the 28 day window.
I think the reason that Netflix can be banned from selling the movies is that they don't own the movies that are being put in the machine. Their paying the studios less to put the movies in and doing a split on the proceeds from the movies. So the studios still own the dvd.
| Submitted by: | Jennifer 8/14/2009 6:44:55 AM PT |
| Occupation: | Store Manager |
I will be keeping my fingers crossed that the window goes into effect. I have managed a large chain video store for 12 years and we are under a lot of stress because of the competition with RedBox & NetFlix. I think this will help our company & save our jobs. May be selfish reasons, but hey...it's dog eat dog...right?
| Submitted by: | Paula Kyler 8/14/2009 6:29:34 AM PT |
| Location: | Addison NY |
| Occupation: | owner operator |
Thank you for making a window for redbox and netflix , I own a very small video rental store and it has been harder for me to stay afloat with that much compitition, I also have a Block Buster within 6 miles and I was doing ok with only them around but factor in netflix and now redbox it is just unfair, or maybe you could sell me the dvds for the same price as them , I might be ale to make a go of it then.-ricing should be the same for us all!!!!
| Submitted by: | SHELLY JACOBS (SHELDON.JACOBS@GMAIL.COM) 8/14/2009 5:58:59 AM PT |
| Location: | NYC |
| Occupation: | FILM LIBRARIES; HEDGE FUNDS |
So selling previous viewed DVDs via kiosk is a no no? Does that mean that I'm forbidden from selling slightly used wheelbarrows? No way will such oligopolized DVD nonsense stand up in court ... unless the MPAA get Congress & then The Supreme Court to bend to their will. Once I buy something, it's mine to do with what I wish to ... UNLESS it is NEVER a sale, just a LICENSE, like Microsoft desktop product ... listening to me, MPAA? ;-)
Regardless, kiosks are just an interm step until eventual 24/7 on-demand Ultra HD download distribution via the huge broadband pipes coming, and wireless. More important is what will Hollywood do when 2022 comes around and the first of the talkies, THE JAZZ SINGER, goes PD, with GONE WITH THE WIND and THE WIZARD OF OZ in 2034? And NBC Universal can say goodby to the Monsters. Here, the only control will be to own & control the hi-quality digital data transmission off the restored prints ... or again extend the copyright well beyond 95 years ... or HD colorize and ersatz 2D-to-3D to obtain new copyrights.
With all due respect to Viacom & the great Hasbro, G.I. JUNK should have had its World Premiere at the $1 kiosk! Yup, I saw it with my 28 year old U.S. Army Special Forces officer son, and, alas, here are two demos that agree on the kiosk Premiere opportunity missed ... gee, why don't they call me first so I can save 'em $150 million at a clip?
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