Monday, April 26, 2010

Windows Proliferate for DVDs

Following on their recent agreement with Warner Bros, Redbox has now settled with both Fox and Universal.

Under the agreements, Redbox will not rent Fox or Universal DVDs from its $1 rental kiosks until 28 days after the films are released on DVD. Redbox also agrees to destroy the DVDs at the end of their rental life, rather than sell them on the used market.

In return, Redbox gets better financial terms from the studios, and guaranteed access to greater quantities of DVDs.

This makes a higher-price rental "window" (for the likes of Blockbuster) common now across the majority of major releases, followed by the lower-price Redbox rental window. The studios also, of course, hope for increased sales of DVDs during this window, since they profit more from sales than from rentals.

Thus, the home video rental window has now been sliced in two. How many more windows will we see as movies make their way online?

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