VID NEWS IN BRIEF

Fellow Americans and all that sail the ships of the Video Sea, we interrupt your reading for this special news…

…Something is not right here. Ultraviolet, discussed in last month’s Vid News, is being developed to help add value to purchasing DVDs and Blu-ray discs. Few in the business would not point to Redbox as one of the biggest causes of devaluing not only sell-thru but most aspects of the video business. At this time the Flixster website, owned by Warner, is the only place consumers can access their Ultraviolet digital copies. Surprising to us and others…we find one of the lead advertisers is promoting a special pitching a free Redbox DVD rental if you buy four party pizza. What’s next - a free subscription to Netflix?? Oops.

…Talk about a price increase! NCR raises rental rates to $3 plus tax! Blockbuster Express, owned and operated by NCR Corp. under a license agreement with Blockbuster LLC will rent new release DVDs on retail street date at $3 for the first night and $1 for the second night during the first 28 days of release plus tax. Now that’s a noticeable increase from the $1.00 a night for everything that they had been charging. In the press release it stated a) the first 28 days and b) from retail street date. That kind of sounds like NCR is going to be out shopping for Warner titles. With the much higher rental rate the added cost to purchasing titles at full price at retail would be minimal. Getting the higher rental rates on all other titles would be money in the bank. If you compete with a Blockbuster Express don’t let this opportunity just slip unnoticed.

…Redbox raises its rental rates to $1.20 from the $1.00 per night rate. If NCR figures they needed to increase their rental rate to $3.00 a night from the $1.00 to be able to go shopping at mass merchants for Warner titles and to be profitable, does this mean Redbox won’t be going back to the “Work Around” any time soon? Don’t bet on it! One thing for sure is if they do start trying to get the delayed Warner title or others as well, their profits will drop really fast and Wall Street investors will notice. That could get ugly for Redbox.

…As a final note concerning Warner’s 28-day delay to rental; With indy retailers (to include Family Video), Blockbuster store employees, Hastings employees, NCR kiosk route drivers, Redbox route drivers and others all making multiple visits to shop Warner titles, one cannot help but wonder if mass merchants won’t have a separate checkout counter for them. Especially considering they will all be paying with numerous credit and debit cards purchasing 4 units at a time.