News

BREAKING: Redbox responds after Fox pulls new titles

August 5, 2009

According to an article in the L.A. Times, 20th Century Fox has joined Universal Studios in the fight against redbox. The studio has instructed its DVD distributors not to sell titles to redbox and other DVD-rental kiosk companies until 30 days after their release.

According to the article, Chase Carey, CEO of Fox parent News Corp., alluded to the issue in the company's fourth quarter earnings call Wednesday:  

Having our [movies] rented at $1 in the rental window is grossly undervaluing our products.

In an e-mailed statement to the Times, a Fox spokesperson offered an explanation for the abrupt move:

The basis of this position is to continue to provide the consumer with broad title choice and access to Fox movies while maintaining the quality image and value perception of Fox movies. Our desire is to maintain for Fox movies a thriving network of distribution serving all types of consumer preferences on reasonable business terms for Fox, as well as our distribution partners.

The news comes in stark contrast to the recent positive developments for Coinstar Inc., redbox's parent company. CEO Paul Davis said in the company's second quarter earnings call Tuesday that Coinstar is in discussions with Hollywood studios and hopes to replicate last month's distribution deal with Sony:

We clearly understand the impact of fostering collaborative relationships with the studios. Just two weeks ago we announced a long-term partnership with Sony, and we continue to have positive conversations with other studios along the same lines.

The Times is speculating that redbox may continue to offer Fox titles the day they're released simply by purchasing them at retail, as they have done with Universal titles. A statement issued to KioskMarketplace.com this morning from redbox president Mitch Lowe certainly leaves that possibility open:

We were informed of Fox's position late yesterday. Redbox stands behind our convenience and value that we offer consumers, and we're pleased to make DVDs available the day they are released.