Viacom’s Paramount Home Entertainment will provide Redbox with its new releases on the same day they go on sale, under a long-term agreement. Paramount is joining Sony (NYSE: SNE), Lions Gate, and Walt Disney (NYSE: DIS) — all of which let Redbox rent their new DVDs on the same day they go on sale. In recent months, however, Fox, Universal, and Warner Bros. (NYSE: TWX) have all started delaying the release of their movies to Redbox for 28 days in an attempt to protect sales of their new DVDs.
Since August, Paramount had been testing an arrangement which provided all of its DVDs — including new releases — to Redbox to rent in exchange for a cut of the revenue Redbox generated from them. Paramount had said it wanted to determine from the test how cheap rentals affected sales of new DVDs, and, in a statement, it says it concluded that “day-and-date rental activity has had minimal impact on our DVD sales.”
The two companies didn’t disclose terms of their long-term deal. However, when the test was initially announced, there were reports that it included an option for Paramount to extend it for five years.