Redbox lacks Orphan, Hell at many kiosks
PHYSICAL: Street-date delays reflect legal issues with studios
By Danny King and Susanne Ault -- Video Business, 10/27/2009
OCT. 27 | PHYSICAL: Redbox says two out of three Americans will stay at home to watch a horror movie for Halloween. Whether the U.S. movie-rental kiosk leader will have the necessary titles in stock is another question.
Warner Home Video’s Orphan and 20th Century Fox Home Entertainment’s Ice Age 3: Dawn of the Dinosaurs were released on DVD today but weren’t stocked at many Redbox machines across the country, according to a Video Business spot check of kiosks at retailers such as Albertson’s, 7-Eleven and Ralphs. Kiosks in California, New Jersey, Pennsylvania and Texas listed titles including Orphan, Ice Age and Universal Studio Home Entertainment’s Drag Me to Hell, which streeted Oct. 13, under the heading of “Coming in October” but didn’t have physical copies.
The latest Ice Age installment grossed almost $900 million in theaters worldwide after its July release, while Orphan and Hell grossed a combined $136 million, according to BoxOfficeMojo.com.
DVD copies of Tinker Bell and the Lost Treasure, the Walt Disney Studios Home Entertainment title whose DVDs and Blu-ray discs went on sale today, were stocked at the kiosks that were checked.
The lack of availability reflects Redbox’s challenges in stocking titles from Warner, Fox and Universal, which prohibit the sale of their new DVD releases to kiosk operators such as Redbox until at least four weeks after their street date. Redbox has lawsuits against all three studios, which have taken issue with Redbox’s $1 a night rentals, and has had to arrange for so-called “workaround” agreements such as buying DVDs from retailers such as Walmart in order to stock machines on or near street date.
"Redbox stands behind our convenience and value that we offer consumers, and we’re pleased that we continue to meet distribution goals making new release DVDs available at our kiosks nationwide in time for the weekend rush and at many locations the day they are released. This includes Ice Age: Dawn of the Dinosaurs and Orphan," a Redbox spokesperson said.
These stock-outs have persisted through the week, according to Redbox competitor the Video Buyers Group. VBG, which encompasses about 1,700 indie brick-and-mortar video stores, has been monitoring 300 Redbox machines across 25 states to determine their availability of Orphan and Ice Age 3.
VBG reports that on these titles' street dates, less than 1% of these machines carried the two titles. On Wednesday, 6.4% of the machines offered Ice Age 3 and 3.2% had Orphan. By Thursday, 11.7% had Ice Age 3 and 3.5% had Orphan.
VBG members are hoping to use the Redbox stock-outs to their advantage. Earlier this month, the group launched a poster campaign in order to notify customers that they will have many popular titles first, with certain studios delaying title distribution to the kiosk channel.
Redbox sales have exploded in recent years as movie-rental chain store operators such as Blockbuster and Movie Gallery have shut down unprofitable units. Coinstar said in August that Redbox’s second-quarter sales doubled from a year earlier on both more machines and a more than 30% jump in revenue per machine. Redbox doubled its kiosk count to almost 18,000 in the past year.
The company has been looking to promote fall season rentals and released a survey earlier this month stating that about two-thirds of Americans planned to watch a horror movie on or near Halloween and that about 60% of those people preferred to watch the movie at home.
Redbox also said its poll of about 600 of its customers indicated that 1973’s The Exorcist was the scariest movie of all time, while Hannibal Lecter from The Silence of the Lambs was the most frightening movie villain.
