MUMBAI: Leading independent filmed entertainment studio Lions Gate has, through a five-year deal, agreed to supply rental kiosk company Redbox with movie discs on the same day they are offered for retail sale.
The deal, running from 1 September to 31 August 2014, will help Lions Gate‘s business by getting its DVDs into the market early without hurting its traditional DVD sales. Lions Gate, however, has the option of exiting the deal after two years.
Lions Gate Entertainment Corp. now becomes the latest film studio to agree to supply DVDs at $1-per-night to Redbox. With the deal in place, Redbox, which rents DVDs from more than 17,000 bright-red automated kiosks at grocery stores and other storefronts across the United States, should gross about $200-300 million in revenue over its lifetime, according to Lions Gate President Steve Beeks.
It is estimated that Redbox will pay Lions Gate $158 million over the period of the deal.
Hoping to preserve demand for higher-priced DVD purchases, other Hollywood studios including News Corp‘s 20th Century Fox and Universal Pictures have asked Lions Gate to desist supplying DVDs to the kiosk unless it agrees to delay rentals for more than a month after DVDs are put up on the shelves for sale.
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