By The last real piece of authority movie studios have over services like Redbox and Netflix is the ability to contractually limit these services to a waiting period before they are allowed to rent their movies, this coming with the benefit that the services can buy the films at a wholesale discount. It’s why Blockbuster has managed to extend their death rattle across nearly a decade; people will still go to physical rental stores if they can get their movies sooner. Redbox has been bound to a fifty-six-day waiting period before they could rent out films from Warner Brothers, but no more. They’ve allowed their rental contract with WB to expire, leaving them legally able to rent out WB films as soon as they receive them.
The downside, obviously, is that Redbox will now have to purchase WB films elsewhere, and they’ll miss out on the wholesale discount they got from buying directly from the studio. It’ll be interesting to see how this affects Redbox’s profit margins, which it almost certainly will. While they’ll be able to deliver content as fast as Blockbuster and the scattering of independent physical stores across the country, they may not be able to continue justifying the $1 a day price for long, if they continue letting their studio contracts drop.
[LA Times, via Gizmodo]