Report: Studios Cut Deals With Redbox

Walt Disney Co., Lions Gate Entertainment Corp. and Sony Corp. are reportedly cutting deals with Redbox, the $1 DVD rental kiosk company here, for a short-term sales lift even though low-cost rentals are said to be eating into DVD sales revenues, according to a report in the Wall Street Journal this week.

OAKBROOK TERRACE, Ill. — Walt Disney Co., Lions Gate Entertainment Corp. and Sony Corp. are reportedly cutting deals with Redbox, the $1 DVD rental kiosk company here, for a short-term sales lift even though low-cost rentals are said to be eating into DVD sales revenues, according to a report in the Wall Street Journal this week.

The report cited figures from Adams Media Research that indicate disc sales to retailers and rental outlets are projected to fall by about $850 million to $12.9 billion this year. However, sales to kiosk companies are expected to grow by about $125 million to $415.3 million.

Redbox has sued Universal Studios Home Entertainment for violating antitrust laws, among other claims, when the studio tried to order its partners to stop selling DVDs to Redbox at wholesale prices. The case is waiting a judge’s ruling.

Redbox, a subsidary of Coinstar, currently has about 17,000 kiosks nationwide, up from 12,000 at the end of last year. Kiosks are available at select McDonald’s restaurants, leading grocery and convenience stores, and Wal-Mart and Walgreens stores in select markets.

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