Bloomberg News

Coinstar’s Redbox to Get Warner DVDs Elsewhere as Deal Ends

January 31, 2012

Jan. 31 (Bloomberg) -- Coinstar Inc., owner of the Redbox movie-rental kiosks, ended its agreement to buy Warner Bros. titles directly from the studio, rejecting a demand to delay access to DVD and Blu-ray discs for two months.

The agreement with Time Warner Inc.’s home-video unit expiring today won’t be renewed, Bellevue, Washington-based Coinstar said today in a statement. The company said it will obtain videos from third-party suppliers and make them available as soon as they go on sale.

Coinstar, operator of more than 34,000 rental kiosks, is the second DVD-rental service to reject Warner’s effort to make consumers wait 56 days before renting the latest releases. Dish Network Corp.’s Blockbuster refused to accept a four-week delay, a person with knowledge of the matter said on Jan. 10. Netflix Inc. agreed to the delay for its mail-order business.

Getting DVDs sooner from stores and wholesale outlets probably will attract more customers to Redbox, making up for the higher per-unit prices the company will pay, according to Eric Wold, an analyst with B. Riley & Co.

Redbox waited 28 days to get videos from Warner under the previous deal. The service still waits 28 days for DVDs from Comcast Corp.’s Universal Pictures and News Corp.’s Fox.

Other studios, including Walt Disney Co., Viacom Inc.’s Paramount and Sony Corp. make their DVDs available for rental on the day of release.

Separately, Coinstar said it renewed a pact with Wal-Mart Stores Inc. to have its kiosks at more than 3,700 Wal-Mart locations.

Coinstar added 1.9 percent to $49.88 yesterday in New York. The shares have added 9.3 percent this year.

--With assistance from Edmund Lee in New York. Editors: Anthony Palazzo, Ville Heiskanen

To contact the reporter on this story: Michael White in Los Angeles at mwhite8@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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