NEW YORK (Dow Jones)--NCR Corp. (NCR) has inked its first studio distribution deal, agreeing to wait 28 days after Universal Studios Home Entertainment's movies first go on sale before renting them out.
NCR, which rents DVDs and Blu-Ray titles at nearly 7,000 Blockbuster Express-branded kiosks nationwide, will also test premium-priced rentals for new releases without the four-week lag and will set up trials of Universal Studios movie sales at the machines.
Terms of the deal, which is effective immediately, weren't disclosed.
NCR and other movie rental companies have had contentious relationships with studios, with many opting to buy discs at retail cost and rent them out the day they're released elsewhere for sale, rather than agree to wait a few weeks in exchange for cheaper supplies.
Universal also has agreements forcing kiosk operator Redbox Automated Retail LLC, owned by Coinstar Inc. (CSTR), and mail-order and streaming-entertainment company Netflix Inc. (NFLX), to wait 28 days before offering its new-release movies.
-By Melissa Korn, Dow Jones Newswires; 212-416-2271; melissa.korn@dowjones.com
(Updates with further details of deal, company comment, background throughout.)
By Melissa Korn Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--NCR Corp. (NCR) has inked its first studio distribution deal, agreeing to wait 28 days after Universal Studios Home Entertainment's movies first go on sale before renting them out.
NCR, which rents DVDs and Blu-ray titles at Blockbuster Express-branded kiosks nationwide, said it will also work with Universal to test premium-priced rentals for new releases without the four-week lag and will set up trials of Universal Studios movie sales at the machines. NCR currently rents discs for $1 per day.
Terms of the deal, which is effective immediately, weren't disclosed. NCR owns and operates nearly 7,000 Blockbuster Express kiosks, licensing the name from Blockbuster Inc. (BLOKA, BLOKB). NCR has said its business won't be affected by Blockbuster's recent entry into Chapter 11 bankruptcy protection.
NCR and other movie rental companies have had contentious relationships with studios, with many opting to buy discs at retail cost and rent them out the day they're released for sale, rather than agree to wait a few weeks in exchange for cheaper inventory.
Universal also has agreements forcing kiosk operator Redbox Automated Retail LLC, owned by Coinstar Inc. (CSTR), and mail-order and streaming-entertainment company Netflix Inc. (NFLX), to wait 28 days before offering its new-release movies.
"It's a better cost structure for us," Justin Hotard, vice president and general manager of NCR Entertainment, said of direct-from-studio purchases. He declined to estimate savings, but noted that NCR will be able to buy more discs and thus stock its machines better.
While the deal will help NCR control some costs, the company still lags Redbox and Netflix in setting agreements with studios. Redbox, with more than 24,000 kiosks, has 28-day delay agreements with 20th Century Fox and Warner Bros. Home Entertainment Group, and has negotiated deals for immediate rentals from Sony Pictures, Lions Gate, Paramount Home Entertainment and others. Netflix has delayed-release pacts with Warner Bros., 20th Century Fox and Sony.
NCR is "optimistic" about negotiating other studio distribution deals, Hotard said.
As for the current deal, he said NCR hasn't yet determined the price structure for "premium" releases, though it will likely still allow for rentals at a daily rate. "This is going to be a test that we work on collaboratively with Universal," he said.
A representative from Universal wasn't immediately available for comment.
-By Melissa Korn, Dow Jones Newswires; 212-416-2271; melissa.korn@dowjones.com
(END) Dow Jones Newswires
October 06, 2010 13:01 ET (17:01 GMT)
