Redbox to delay Fox and Universal new release rentals

Twentieth Century Fox and Universal Studios have reached a movie distribution agreement with Redbox in which the rental kiosk service will wait 28 days before offering new DVD releases for rental.

Both movies studios have already reached an agreement with Netflix, as industry analysts said it was only a matter of time before Redbox also gave in.  The DVD rental service saw its revenue increase from $388 million in 2008 up to $774 million in 2009 — and that number continues to balloon.

Furthermore, movie studios are facing increased pressure from piracy and a slowing economy, which has led them to seek improved DVD movie sales as much as possible.  Redbox, known for its $1 per day rental costs, greatly frustrated studios since many movie watchers would rather simply rent the movie for $1 rather than buy it.

Redbox to delay Fox and Universal new release rentals

“While this arrangement mutually benefits our two companies, it’s more importantly a win for consumers who will now have increased access to Universal films at more than 20,000 Redbox locations nationwide,” noted Universal President Craig Kornblau in a statement.  “In forging this pact, we have successfully established balanced terms for our rental products in Redbox kiosks that provide consumers value and convenience in movie rentals.”

The first Fox movie that will be delayed for Redbox will be Avatar, Redbox noted in a recent statement.  Avatar is one of the most anticipated movies of the past few years, and was expected to help fixed a strained relationship between Fox and Redbox.

I’m beginning to think a 28-day window may be too long for movie releases that aren’t blockbusters, as it’s just too lengthy of a period.  However, the industry seems to have settled upon the 28-day delay, though movie studios and distributors said they would be willing to discuss the topic further.