Warner Bros. has ended its legal battle against Redbox, after the operator of kiosks that rent movies for a dollar agreed not to offer the studio’s films until 28 days after they bow on homevideo.
Deal could eventually lead to similar pacts with other studios.
WB has been aggressive about the 28-day window, saying it’s instrumental in saving its lucrative DVD and Blu-ray sales biz.
Rental services like Netflix and Redbox had been offering new releases of WB, and other studio movies, almost immediately after they were made available to purchase at retail.
With the recession forcing consumers to cut back on their spending, renting movies at a low fee has been considered a more attractive way to watch movies.
Redbox operates more than 20,200 kiosks in various locations like McDonald’s restaurants, grocery and 7-Eleven convenience stores, and Walmart and Walgreens stores. It has rented more than 500 million DVDs through such locations. It’s also considering launching a digital rental service.
But its kiosk biz has hurt the bottomline of studio homevideo divisions, forcing them to take a hard stance on when the pics can appear on rental services.
Under terms of the deal, which begins with the March 23 homevid release of “The Blind Side,” and runs through January 31, 2012, Redbox will only make WB’s homevideo titles available to customers after the 28-day retail window elapses.
Redbox will be able to purchase films at a reduced cost directly from the studio, which proved attractive to the kiosk operator since it had been sending staffers to retailers to buy product to stock in its kiosks. That includes the availability of Blu-rays, which Netflix has been testing in certain markets.
Redbox has also agreed to destroy Warner Home Video content following its lifespan in kiosks.
Deal also officially ends the lawsuit that Redbox filed against Warner Home Video in August 2009, when it objected to being banned from renting movies when they hit retail. Similar suits against Universal Pictures and 20th Century Fox are still pending.
But it succeeded in inking deals with Sony, Paramount and Lionsgate to guarantee the availability of DVDs the same day they hit store shelves, at least for a limited time. Those studios are said to be eying the same 28-day-deal.
“We are very pleased to have had the opportunity to sit down with Redbox and negotiate an arrangement that benefits both parties and allows us to continue making our films available to Redbox customers,” said Kevin Tsujihara, president, Warner Bros. Home Entertainment Group. “The 28-day window enables us to get the most from the sales potential of our titles and maximize VOD usage.”