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Redbox stocks kiosks with 'Wanted,' defies Universal Studios
December 8, 2008
OAKBROOK TERRACE, Ill. -- Redbox, the fully automated DVD rental system featuring new release rentals for $1 per night, is choosing to defy attempts by Universal Studios to limit its ability to stock new releases at its kiosks. According to a news release, redbox is now offering more than 100,000 copies of the hit film "Wanted," and the title is on pace to become the company's top weekly rental in the week following its DVD release.
"Redbox is working to uphold our cornerstone principles, providing customers with all major new release DVDs - when they are released -- for just $1 per night," said Gregg Kaplan, chief executive of redbox. "Redbox is committed to providing our customers with the highest level of service and value, and we will continue to acquire DVD titles despite attempts to limit consumer access to titles at our kiosks."
To uphold consumer commitment, redbox developed new distribution arrangements and incurred additional costs that allowed the company to circulate more than 100,000 copies of "Wanted" within three days of release date and in time for the weekend movie rush. Redbox did not pass added costs on to customers, preserving the company's unique value proposition and $1 per night price point. Redbox will continue to streamline the distribution process of Universal Studios titles to limit customer impact despite pending litigation.
On Oct. 10, redbox Automated Retail filed suit in Delaware Federal Court against Universal Studios Home Entertainment LLC and three of its affiliates. Redbox filed the action because the company believes that new distribution terms proposed by USHE would prohibit redbox from renting Universal Studios DVDs for 45 days after their public release, would limit how many Universal Studios DVDs each redbox kiosk could carry, and would require redbox to destroy, rather than sell at a discount, previously viewed DVDs from its kiosks. Redbox took action against the studio to protect its business model and continue to offer consumers the latest new releases for $1 per night.
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