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Hollywood hoping Redbox will be the DVD version of $1 movie theaters

July 29, 2009 |  1:45 pm

Redbox Movie studio executives don't hate Redbox -- they just think it's the equivalent of that dingy movie theater where you can see 4-month-old movies for a buck.

That's the growing consensus among many executives in Hollywood as they search for a strategy to deal with the fast-growing DVD kiosk company that rents movies for $1 per night. Redbox has proved very popular among consumers, but studios are concerned because they don't receive a cut of the revenue as they do with rentals from Blockbuster or Netflix. And even if they make a deal with the company -- as Sony Pictures recently became the first to do -- a share won't bring in nearly as much revenue as they get from other rental services.

Universal Pictures, in fact, is in the midst of litigation attempting to prevent Redbox from renting its movies. Redbox currently buys DVDs wholesale, although its deal with Sony will see it cutting that studio in on the action rather than working around it.

In a conference call today with analysts after the conglomerate released its earnings, Time Warner CEO Jeff Bewkes made clear where he sees Redbox fitting in the lifeblood of a movie: "In general, we think there may well be a role for $1 rental kiosks just like $1 movie theaters," he stated. Pressed by an analyst as to whether that means movies shouldn't be available to rent from Redbox until well after they go on sale and are available for rent from more expensive services, he responded, "Probably."

The idea that Redbox should essentially be a last step in the DVD release process, much like discount movie theaters, has been echoed by several home-entertainment executives who have spoken on background with The Times.

Most, it seems, don't share Sony's eagerness to cut a deal with Redbox. Instead, they're waiting for a decision in Universal's lawsuit. If the studio is victorious, it will be able to prevent Redbox from buying its  DVDs and renting them without permission.

Movies still will be available for a buck. But only when Hollywood says so.

-- Ben Fritz and Dawn Chmielewski

Photo: A Redbox kiosk in a northern Seattle grocery store. Credit: Elaine Thompson / Associated Press

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