Fox Will Delay Release of its DVD Titles for 30 Days to Redbox, like Universal

20th Century Fox Home Entertainment will soon impose a 30-day delay, or "window", on Redbox, Blockbuster Express / NCR, DVDPlay, and E-Play, from receiving their new release DVD titles for rental to consumers, similar to Universal Studios’ attempts. Distributors will be instructed to not release new titles to any kiosk operator until 30 days after their standard industry "street date". Other studios will instead partner with kiosk operators in ways similar to the Sony agreement with Redbox.

 

This new policy by Fox will not prevent Redbox and the three other major kiosk operators from securing Fox DVD product. Like Universal Studios Home Entertainment's attempts to delay their titles released over the last year for 45 days to rental kiosks, it will only make the process of using other means more laborious and slightly more expensive to get that inventory into the kiosks by the first Friday after the standard "street date". Further, it is my opinion that if and when Redbox's anti-trust lawsuit against Universal for the unfair imposition of a similar window ever does get heard, the courts will find in the rentailer's favor citing the First Sale Doctrine and the studio's unfair restraint of trade.

 

Several other studios are in discussions and negotiations with Redbox and the other kiosk operators to reach agreements that essentially provide the same things that Sony found so valuable in their deal with Redbox. These  benefits to the studios include, but are not limited to, a dramatically greater market share purchased of their theatrical, catalog, and direct-to-DVD product, and the elimination of all used DVD new release product shortly after the title's release, that would normally be sold to wholesalers and aftermarket brokers, possibly cannibalizing the studio's sale of new product at retail. All future agreements that will be reached will include these two important components, as well as a significantly lower cost-of-goods on all product the kiosk operators purchase. These agreements will be announced shortly.

 

The DVD rental and video game buy-sell-trade kiosk business models are unquestionably here to stay, and will only continue to explode in growth and popularity in the future. The consumer has now widely accepted the kiosk as the third viable mainstream delivery system of movies, in addition to "brick-and-mortar"  and online rental. In addition to the Redbox deal being mutually beneficial and highly advantageous for both parties, Sony has proven to be visionary in their leadership in embracing this model and the consumers' changing preferences.

 

This author consults with leading institutions through GLG