Redbox takes another blow as retailers limit purchases
It seems that Redbox simply can’t catch a break as two major retailers make a move to limit the quantity of new DVD releases customers may purchase.
According to BusinessWeek, the days of Coinstar’s Redbox DVD kiosks being supplied with new release DVDs from Walmart and Target have pretty much come to an end. Effective Feb. 1, Walmart has enacted a five copy restriction on customers for all new DVD releases, Target had already done similar in December. Target’s purchase cap remains in effect for one week to several weeks after the release of the film depending on the title, but there is no word on how long Walmart’s restriction stays in place.
With Redbox’s ongoing legal battle with Warner Home Video, 20th Century Fox Home Entertainment and Universal Studios Home Video over how long the kiosk retailer must wait to put out new releases, purchasing videos from retailers had become one of the major sources of copies for the company. Tom Adams, president of Adams Media Research, estimates that Redbox was getting as much as 40 percent of its inventory by purchasing from retailers.
All of this stems from the fact that the three above named studios feel that the $1-per-night rental pricing of Redbox has been contributing to the decking sales of DVDs. The studios have been seeking a 28-day window from Redbox before it would put new releases in its kiosks, and in trade the company would receive more favorable pricing. Redbox has seen having the movies on release date as being more important, and has been fighting with the three studios ever since. Sony Pictures Home Entertainment and Lions Gate Entertainment currently allow Redbox to distribute on release date, Paramount Home Entertainment does so in a limited capacity.
With the increased pressure on Redbox now for securing recent releases, it is quite possible that the company will finally have to give in to the demands of the studios, but at this time it says that it is simply evaluating its options.
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