Disney may wait 28 days before selling new DVDs to Redbox, others
Disney Chief Executive Bob Iger told investors during the company's earnings call Tuesday that its film studio is in discussions with Redbox and other services about imposing a 28-day delay before directly selling them copies of newly released DVDs and Blu-rays. It's a bid to protect sales of the discs.
"The reason [the studio] hadn't gone to that window before is the studio felt that it was not seeing any effect from these dollar-rentals on their sell-through business," Iger said in response to analyst questions.
But Iger said the entire industry continues to suffer from an erosion of once-lucrative DVD sales — and that neither movie rentals nor digital purchases have made up for the shortfall.
Disney's studio entertainment group is not immune. It cited soft DVD sales as one factor in a 16% decrease in revenues to $1.6 billion for the quarter ended Dec. 31, as compared with the same time the previous year.
"So they've decided to take a step in the direction of further protecting the initial window of the sell-through," Iger said.
Disney joins a number of studios taking protective measures to bolster an eroding business. Universal Pictures, a unit of Comcast Corp.-controlled NBCUniversal, and News Corp.'s Fox have imposed a 28-day rental window on Redbox and Netflix.
Warner Bros. in January said it planned to sell its DVDs and Blu-ray discs only to rental companies that agreed to wait until 56 days after they go on sale. Warner executives think the delay encourages consumers to buy DVDs and Blu-rays or rent movies via video-on-demand, both of which are more profitable transactions for the studio at a time when home entertainment revenue has been shrinking.
Photo: Aisha Smith chooses a DVD from a Redbox rental kiosk. Credit: Elaine Thompson / Associated Press
— Dawn C. Chmielewski