Paramount Tries Before it Buys into Redbox Model

RedboxLogoRedbox has found itself at the center of a Hollywood war over the price of movie rentals, and up until now, sides have lined up either with the kiosk rental company (Sony, Lionsgate) or against it (Universal, Warner Bros., Fox). Paramount has chosen a third option — it’s entering into a trial through the end of the year with Redbox before it makes a final decision.

The deal will give Redbox access to new release Paramount movies as soon as they are released — a sticking point for those opposed to Redbox’s model. The LA Times reports that Paramount’s deal is a rev-share one, rather than an outright wholesale of discs to Redbox like Sony and Lionsgate do. Additionally, Paramount will get access to Redbox rental data of its movies, which the studio will use to determine the impact the $1 a night rental service has on its total home entertainment revenue.

If Paramount decides to fully commit to Redbox, it will be to 2014 and the deal is estimated to be worth $575 million.

Paramount’s move is so packed with common sense it almost makes you wonder why no one did it before. Universal, Fox and Warner Bros. all imposed delayed release windows against Redbox, which responded with lawsuits. Sometimes, things don’t have to be either/or, they can be both/and.

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