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Redbox Fights Studios: Wal-Mart to the rescue

October 14th, 2009 Leave a comment Go to comments

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Wal-Mart was the first major corporation to embrace Redbox in early 2008, when the retail giant made a deal with Coinstar Inc. to install over 3,500 of the DVD rental kiosks in their stores across the US. Since that time, Redbox has grown exponentially, with over 15,000 units currently in operation, and over 500 million DVDs rented. As its popularity has risen, so has the fear amongst the major studios that it’s cutting into their own DVD sales.

In the economic recession that Hollywood is currently experiencing, they’re not letting the issue go quietly into the night. Studios like Universal, 20th Century Fox and Warner Bros., are all currently in litigation with Coinstar over the fact they’ve issued a 28 day waiting period for new titles.

Disney has tried to remain neutral, although that may be changing, since they announced that they would impose a waiting period for the upcoming DVD release of UP. For the time being Redbox has been stocking kiosks with discs purchased directly from store shelves.

So it shouldn’t come as any surprise to hear that it may be looking to retail giants like Walmart for a solution to an increasingly complicated problem. In a note to investors Monday, Merriman Curhan Ford analyst Eric Wold suggested the DVD kiosk company could sign a deal with Wal-Mart Stores Inc., Best Buy Co. or Target Corp. to get better access to new titles. Wold, who mentions that Redbox sales accounted for 39% of all DVD rentals this year, says that the deal could be:

quite valuable.

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