Twentieth Century Fox Home Entertainment is seeking to impose a 30-day delay on the availability of its DVD titles in $1-per-night rental kiosks such as Redbox, despite a pending lawsuit between Redbox and another studio over delayed releases.
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 are strongly opposed to the kiosks’ $1 pricing, and the large volume of used discs they create, both of which they believe undercut new DVD sales.
Fox’s move follows a similar play by Universal Studios Home Entertainment, which last fall tried to impose terms on Redbox and other vending operators that would have limited the availability of studio titles to 45 days after street date and required Redbox to destroy DVDs after their rental cycle. Redbox, which is the vending leader by far with 17,900 U.S. machines, sued the studio on antitrust grounds, and the suit is still pending.
One major DVD wholesaler confirmed that Fox has directed wholesalers not to sell its new release titles to any vending operator until 30 days after street date.
Redbox executives were not available for comment.
Fox said in a statement that the studio “supports the vending machine business in a 30-day window following our initial homevideo street date. The basis of this position is to continue to provide the consumer with broad title choice and access to Fox movies while maintaining the quality image and value perception of Fox movies….Our desire is to maintain for Fox movies a thriving network of distribution serving all types of consumer preferences, on reasonable business terms for Fox as well as our distribution partners.”
Time Warner CEO Jeff Bewkes, on the company’s earnings call last week, also suggested that kiosks should fill a niche for renting films some time after their general release.
But not all studios share Fox’s and Universal’s stance toward kiosks. Sony Pictures Home Entertainment and Walt Disney Studios Home Entertainment have found ways to work with Redbox, most notably Sony, which recently signed a five-year, $460 million deal to supply DVDs to the kiosk operator at their initial release and secured itself 20% of the space in Redbox kiosks.
(Marcy Magiera is editor-in-chief of Daily Variety sister publication Video Business.)