Cheap DVD rental kiosk operator Redbox cuts deal with Fox, Universal to end legal battle

Redbox to delay rental movies from Fox, Universal

LOS ANGELES — Redbox, the leading $1-per-night DVD rental kiosk operator, said Thursday it agreed to delay renting movies from 20th Century Fox and Universal until 28 days after discs go on sale.

The deal puts an end to all pending studio lawsuits against the unit of Coinstar Inc.

And it leaves the six major Hollywood studios evenly split over whether or not to impose the delay, meant to protect lucrative DVD and Blu-ray disc sales.

Warner Bros., Fox and Universal now all require a four-week delay on new home videos for Redbox, while Paramount, Disney and Sony all allow it to stock movies the same day of release.

Lionsgate, a smaller studio, also has a deal with Redbox to stock movies the day they are released for sale.

In the new deals, Fox and Universal agreed to supply the kiosks at reduced costs and increase the availability of Blu-ray discs.

In exchange, Redbox agreed to destroy discs after their rental lives end, instead of selling used copies for cheap, which the studios see as a threat to retail prices.

The first movies under the new arrangement are Universal’s “It’s Complicated,” which will be supplied four weeks after its release for sale on April 27. The first Fox title is “Avatar,” a 2-D version of which was released for sale on Thursday.

Mike Dunn, the worldwide president of 20th Century Fox Home Entertainment, said in a statement the arrangement “upholds our retail and rental strategy.”

Redbox President Mitch Lowe said the deal “helps keep rental prices low.” The company is testing prices of Blu-ray rentals in certain markets to see whether consumers accept nightly fees above $1.

Redbox operates some 20,000 kiosks nationwide.