WB, Fox and Universal worried about DVD sales

Warner Home Video lined up with 20th Century Fox Home Entertainment and Universal Studios Home Entertainment on Thursday in pushing a later release window for DVD rentals through vending kiosks.

Warner said it will sell its titles directly to kiosks, led by Redbox, 28 days after their general market release from October.

The move is the latest salvo in an increasingly tense battle between several major studios, which fear that the kiosks’ $1 a night rentals bite into DVD sales.

Sony Pictures Home Entertainment and Lionsgate, on the other hand, recently signed direct distribution agreements with Redbox and are not asking for delays in releasing titles.

Studios hope that consumers who want brand-new releases will buy them for $15-$20 instead of turning to low-cost rentals.

“Redbox was informed today that Warner Bros. will take action to limit our consumers’ timely access to new release DVDs,” said Redbox president Mitch Lowe. “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 also said it would sell directly to mail-order services such as Netflix, presumably for more control over windows.

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,” the studio said in a statement.

Additionally, Warner is telling wholesalers not to distribute any used studio product to its accounts.

Redbox is suing Universal and Fox for alleged antitrust violations after the studios tried to impose a delayed window on the kiosk operator.

Redbox offers $1 per night DVD rentals via more than 17,000 kiosks in the U.S.

Blockbuster CEO Jim Keyes addressed the Warner announcement in the rental giant’s earnings call with analysts Thursday. 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 year, Keyes agreed with Warner’s tactic, calling it “complementary to Blockbuster’s multichannel approach.”  

He explained, “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: Blockbuster would rather have customers pick up a higher-priced rental in stores than a $1 per night DVD, even from its own kiosks.

(Danny King contributed to this report. King and Ault are reporters for Daily Variety sister publication Video Business.)

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