Summary
As always, the new delivery methods find acceptance after the producers initial adverse position to changing their established models. Studios, because Redbox product hunger, are, ironically, gaining market strength. Independent films will be adversely affected.
Analysis
Well, as the article says: 4 in the pocket, 3 to go. The monolithic front of the seven sisters was broken and now is just a matter of time that all will fall in place. The balance has tipped in favor of Redbox (probably with some help of Blockbuster and its intent to establish kiosks too) and now the question is how long the party will last.
As I have expressed in another news analysis on this same subject, my humble opinion is that the novelty for Redbox, even if this one achieves mass market penetration, eventually will be pass and will be replaced by VOD methods (see related article "Warner, Paramount, Sony, Lionsgate movies will be available to be copied on DVD, Blu-ray, others" - http://www.videobusiness.com/article/CA6685873.html?nid=4756&source=link&rid=15620018). Once the consumer gets again its confidence high, will make the HDTV-BlueRay-Broadband-Download-Stream pent-up desire explode, finally achieving mass market penetration for full digital delivery.
Another issue to consider in here is the fact that Redbox is guaranteeing "market share" (the equivalent of "shelf space") to those studios signing in. Even assuming that the three renegades will get lower guarantees, when they finally decide that they can't be left out of the party and, once all these guarantees (18.5%, 19.9%, etc) are added up, they will squeeze the available "shelf space" for independent productions. If kiosks end up being the dominant delivery method, the already endangered independent producer may become extinct (in terms of mass market share) and THAT will certainly be a shame and detrimental to the development of culture in general. Remember that, most often than not, the independent films are the creative trailblazers.
Ironically, Redbox, in their hunger for product are solidifying the dominance of the seven sisters (even those they are suing now) for the foreseeable future. That may be a case of "watch-out-what-you-wish-for". Maybe once the full digital delivery promise is fulfilled, the breadth of offering vs. the depth of copy balance will tilt again in favor of the independents, certainly I truly hope so.
Meanwhile... I am finding the nearest Redbox...
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
