Paramount, Redbox keep DVDs and Blu-ray discs in kiosks the same day they go on sale
By Richard Lawler 
posted June 15th 2010 5:46PM
posted June 15th 2010 5:46PM
It looks like not all of the remaining Hollywood studios are putting the 30-day brakes on providing movies to Redbox, as Paramount has concluded after a ten month study that it has "minimal" effect on DVD sales. Dennis Maguire, President of Paramount Home Entertainment says the company is "allowing the consumer a choice of how to consume our movies while maximizing the profitability of our releases in the home entertainment window" while Redbox prez Mitch Lowe looked forward to joint marketing programs. That puts another studio on deck to provide the Blu-ray rentals we're expecting to see later this year and is a pretty sharp contrast to recent deals with Fox and Warner delaying low cost rentals to protect their day one sales and premium rentals on video on-demand. Paramount Home Entertainment and redbox Announce Multi-Year License Agreement
Paramount Concludes Test, Agrees to Provide DVD and Blu-ray Titles to redbox Day-and-Date
HOLLYWOOD, Calif. and OAKBROOK TERRACE, Ill., June 15 /PRNewswire-FirstCall/ -- Paramount Home Entertainment Inc. (PHE) and Redbox Automated Retail, LLC (redbox), today announced that Paramount exercised its option to extend its revenue sharing license agreement, providing redbox access to PHE DVD and Blu-ray titles to rent at its approximately 22,000 kiosk locations on the same day they are released in the sell-through market. PHE exercised its option following results from a 10-month analysis of DVD sell-through and rental performance.
"After analyzing the data from our test period we have concluded that redbox day-and-date rental activity has had minimal impact on our DVD sales," said Dennis Maguire, Worldwide President of Paramount Home Entertainment. "By granting redbox day-and-date availability we are allowing the consumer a choice of how to consume our movies while maximizing the profitability of our releases in the home entertainment window. We are looking forward to continuing a productive and mutually beneficial relationship with redbox."
"We are delighted to continue our relationship with Paramount to provide consumers with convenient, timely and affordable access to their favorite movies," said Mitch Lowe, president, redbox. "We look forward to supporting Paramount movie releases through joint marketing programs. This arrangement is a win, win and win – for consumers, Paramount and redbox. "
Redbox and PHE first signed a trial license agreement in August 2009, with redbox agreeing to provide PHE rental data to evaluate the potential benefits of a longer term contract.
About Paramount Home Entertainment
Paramount Home Entertainment (PHE) is part of Paramount Pictures Corporation (PPC), a global producer and distributor of filmed entertainment. PPC is a unit of Viacom (NYSE: VIA, VIA.B), a leading content company with prominent and respected film, television and digital entertainment brands. PHE is responsible for the sales, marketing and distribution of home entertainment products on behalf of various parties including: Paramount Pictures, Paramount Vantage, Paramount Classics, Paramount Famous Productions, Nickelodeon, MTV, Comedy Central, CBS and PBS and for providing home entertainment fulfillment services for DreamWorks Animation Home Entertainment.
About Redbox
Redbox Automated Retail, LLC, a wholly-owned subsidiary of Coinstar, Inc. (Nasdaq: CSTR), offers new release DVD rentals through its network of conveniently located, self-service kiosks. Redbox has rented more than 750 million DVDs and is available at approximately 22,000 locations nationwide, including select McDonald's restaurants, leading grocery and convenience stores, and Walmart and Walgreens locations in select markets. For more information, visit www.redbox.com.
Certain statements in the foregoing are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including phrases conveying expectation or intent and other expressions identifying future performance. Certain words and expressions identify forward-looking statements, but their absence does not mean that the statement is not forward-looking. The forward-looking statements in this release include statements regarding redbox's relationship with Paramount relating to, among other things, a DVD revenue sharing licensing arrangement. Forward-looking statements are not guarantees of future performance and actual results may vary materially from the results expressed or implied in such statements. Differences may result from actions taken by Redbox, Coinstar, Inc., or Paramount, including those beyond Coinstar or redbox's control. Such risks and uncertainties include, but are not limited to, the early termination or the renegotiation on materially adverse terms, of the licensing arrangement, and failure to abide by the terms and requirements of the arrangement. The foregoing list of risks and uncertainties is illustrative, but by no means exhaustive. For more information on factors that may affect future performance of Coinstar or redbox, including the relationship with Paramount, please review "Risk Factors" described in Coinstar, Inc.'s most recent Form 10-K and any subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission, as well as other filings. These forward-looking statements reflect Coinstar, Inc. and redbox's expectations as of the date hereof. No obligation is undertaken to update the information provided herein.
Well at least one company is smart enough to do a study. Good job Paramount!
Congrats Paramount of a good business decision.
I fell like buying a paramount blu-ray just as a thank you
@hodedofome feel.......crap....
Man its good to see a win for redbox go to hell warner and blockbuster its time that they embrace the future nobody wants to go to the movie rental place anymore its like going to the post office to mail off bills nobody under 40 years old does that bcuz its painful right?
This just shows that redbox isn't very widely used.
Once that changes Paramount will join in on the delay.
I'm not seeing that. The cheapest movie to buy costs $15, when on sale with tough competition in the area; otherwise, $17 to $18 is considered a "good" launch price. Fundamentally, you've got shoppers that are going to be willing to buy them, no matter what, and you've got consumers that just want to watch the movie, even if renting for $1 (Redbox) or $4 (Blockbuster). I'm not convinced those shoppers overlap much. It's not unlike those who are committed to pre-ordering games or buying them at the initial pricepoint, versus those who wait for them to go used (or GreatestHits, at half the original launch price). It might affect long-run sales, but Day One sales are almost definitely going to be unaffected by such a program.