The exclusive release window for movie theaters is under siege - and from all quarters.
Last week Redbox, which operates the red DVD kiosks seen in supermarkets, malls, drug stores, etc. inked a deal with Warner Brothers whereby all Warner movies will be available for rental at all Redbox kiosks just seven days after their retail sell-through date.
Despite the decline in overall DVD sales, Redbox movie rentals are still very much in demand. This year it plans on installing 1,500 new kiosks across the U.S. which will bring its total 'rental boxes' to over 40,000!
Prior to this deal, Warner Bros. movies were on a 28 day delay before Redbox was permitted to rent them. Currently, Lionsgate and Paramount have a 16 days deal. Redbox has no current deal with Sony or Disney and must purchase their DVDs in the open market. Redbox charges $1.50 per day for a regular DVD and $2 for a Blu-ray rental.
Outerwall, the parent company of Redbox, was purchased last fall by Apollo Global Management for $1.6 billion. In addition to Redbox, Outerwall consisted of Coinstar and ecoATM.
Redbox has carved out a niche for itself in the movie distribution business and has been very successful, thus far. Although content streamers like Netflix and Amazon have been very successful there are still millions of people who don't subscribe and still rent out DVDs. Redbox has no really competition in the DVD rental business.