Analyst Advises Redbox Deal With Walmart

If Universal Pictures, 20th Century Fox, and Warner Bros. continue to refuse to sell DVDs to kiosk operator Redbox unless it agrees to withhold them for at least four weeks, Redbox could work out a deal to buy directly from a major DVD retailer like Wal-Mart, Best Buy or Target, financial analyst Eric Wold said Monday. Wold, of the San Francisco-based financial services company Merriman Curhan Ford, said in a note to investors that retailers would find bulk sales to Redbox "quite valuable." He suggested that Wal-Mart might be the ideal candidate, since it already accounts for 40 percent of all DVD sales and has Redbox kiosks in many of its locations. Wold observed that the studios would likely object to such an arrangement. "However, given that some retailer chains actually dominate a significant portion of the DVD sell-through market, we believe the power would quickly shift to the retailer."

13/10/2009