Coinstar (CSTR) announced last night that they've reached a deal with Warner Brothers over new DVD release times. As I wrote back in August 09 in "DVD Wars", there was a heated battle brewing over DVD releases between studio's and distributors like Coinstar-owned Redbox. Too close to the release, and people rent the movie for a buck rather than head to the cinemaplex (is that a word?)....
The deal announced last night put to rest a lot of concern over the lawsuit Coinstar had filed, and share are +6%:
BURBANK, Calif. & OAKBROOK TERRACE, Ill.--(BUSINESS WIRE)--Warner Bros. Home Entertainment Group and redboxtoday announced a new multi-year distribution agreement that will make Warner Bros. new release DVD and Blu-ray titles available to redbox customers after a 28-day window. The agreement also marks the end of the lawsuit that redbox filed against Warner Home Video in August 2009.
“We are very pleased to have had the opportunity to sit down withredbox and negotiate an arrangement that benefits both parties and allows us to continue making our films available to redboxcustomers,” said Kevin Tsujihara, president, Warner Bros. Home Entertainment Group. “The 28-day window enables us to get the most from the sales potential of our titles and maximize VOD usage.”
The analysts at Brigantine must be fielding some VERY unhappy calls from clients, as they upgraded the stock today just three trading days after downgrading it based on the impact these studio fights would have on the bottom line, as well as the headline risk with fighting your content provider. While Brigantine outlined their reasoning for both the downgrade then upgrade in clear fashion, their timing since initiating coverage in August has been an exercise in frustration. Clients do not care much about your reasoning when your buy/sell calls aren't working.
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