Redbox, Universal Keep 28-Day Window on Discs

by Terence Keegan A new Blu-ray and DVD distribution deal between Redbox and Universal Studios Home Entertainment will keep in place a 28-day window on new disc releases through August 2014. The agreement may alleviate some analyst concerns about the Coinstar-owned rental kiosk company’s prospects, as studios seek more ways to shore up their sell-through business. Redbox is currently “working around” demands from Warner Bros. to keep new release DVDs and Blu-rays out of its kiosks for 56 days, by declining to purchase discs directly from the studio. Analysts have anticipated other studios will make similar windowing demands of Redbox, casting doubt on the company's strategy of buying discs from alternate (higher-priced) sources. Just yesterday, Wedbush Securities analyst Michael Pachter wrote in an investor note that he expected “Universal and Fox to potentially follow suit” in demanding 56-day windows from Redbox, “making a work-around far more difficult to manage” (via paidContent). With Redbox not disclosing financial terms of its new agreement with Universal, one can only speculate what the 28-day window is worth to the kiosk chain. On one hand, the company is increasingly dominant in the disc rental business, which does bring studios some revenue. Yet Redbox is also hoping to establish a video streaming service with Verizon later this year; unlike in packaged media, there are no “work-arounds” to dealing directly with studios for digital content. For now, Redbox and Universal both can claim victory. “The multi-year agreement between Universal Studios Home Entertainment and Redbox represents a win for consumers, Universal and Redbox,” says Galen Smith, Redbox senior vice president, in a joint announcement. “Redbox is committed to forging relationships that provide our consumers with affordable and timely access to new release content.”