Rental co. won't distribute DVDs until 28 days after initial bow

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Redbox has agreed not to rent movies from Universal and Fox until 28 days after the studios’ movies bow on DVD — marking an end to the legal battles between the big Hollywood studios and the kiosk operator.

The deal also is a victory for Universal Studios Home Entertainment and Twentieth Century Fox Home Entertainment, which had been calling for Redbox not to make its titles available through the company’s $1-a-day-rental kiosks until a month after their release since August. Warners ended its legal battles in February when it signed a similar agreement with Redbox.

Last year, Paramount, Sony Pictures Home Entertainment and Lionsgate agreed to distribute titles directly to Redbox, but only Lionsgate supplies titles to Redbox on DVD street date. Walt Disney Studios Home Entertainment also has a working arrangement with the company.

Redbox had sued Universal after the studio told distributors not to sell DVDs to the kiosk operator. Studios have felt threatened by cheaper rental services like Redbox, contending the companies hurt traditional DVD sales, with consumers able to rent titles for only $1.

Universal, Fox and Warner Bros. have now brokered a long-term pact that will make DVDs available for rental at Redbox locations a month after their release, ending any legal disputes. Some studios have similar pacts with Netflix. But Blockbuster still offers rentals on the same day they are released on DVD, giving the rental giant an upper hand.

“This arrangement upholds our retail and rental strategy, while allowing us to continue to deliver the best available movies and TV shows in the market to our customers,” said Mike Dunn, worldwide president of 20th Century Fox Home Entertainment. “We aggressively seek out ways to provide the greatest access to all our content while ensuring it makes the best sense for our business.”

Redbox will now be able to stock its 20,000 kiosks with titles it can purchase directly from the studios at a reduced cost. That includes Blu-rays which Redbox is starting to roll out in select markets. Most kiosks will carry Blu-rays by mid-year.

Redbox also agreed to destroy DVDs and Blu-ray discs following their lifespan in the rental kiosks.

“Avatar” will be the first release from Fox, while U will supply the comedy “It’s Complicated.”

“In forging this pact, we have successfully established balanced terms for our rental products in Redbox kiosks that provide consumers value and convenience in movie rentals,” said Craig Kornblau, prexy of Universal Studios Home Entertainment.

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