Redbox, which has battled multiple Hollywood studios in court over its rightful place in the movie ecosystem, is now selling discounted digital downloads of Disney films despite not having a formal relationship with the No. 1 studio.
Third-party sellers had previously supplied the kiosk operator with physical copies of Disney DVDs and Blu-ray discs, with the studio’s consent. The availability of lower-cost digital codes on Redbox comes at an awkward time for Disney, which just launched its Movies Anywhere download service with four other major studios after a lengthy period of strategic consideration. (UltraViolet, the industry’s previous download-management solution, drew support from dozens of distributors but did not prove to be a potent weapon in the fight to preserve studio revenue in the streaming era and Disney never joined the effort.)
When contacted by Deadline, Disney did not offer any official comment on the download codes. Kate Brennan, head of communications for Redbox, told Deadline in a statement, “While we don’t disclose the source, we’re pleased to sell these original digital movie code inserts to our customers at the great value they expect from Redbox.”
It is not clear exactly when the digital codes, which enable viewing across mobile devices, went live on the Redbox website. Included on the site are more than a dozen recent titles, including Guardians of the Galaxy, Vol. 2 and Moana. Digital copies of Guardians 2 are $19.99 on iTunes (to cite one service linked to Movies Anywhere) but just $9.99 on Redbox. Moana is also $19.99 on iTunes, but just $7.99 on Redbox. The codes can be purchased online and then retrieved at kiosks via the company’s “Digital Codes At the Box” feature. On the website, other studios’ titles do not appear to be offered “At the Box.”
Redbox and its parent company Outerwall were acquired in 2016 by private-equity firm Apollo Global Management for $1.6 billion. Although vulnerable to the forces squeezing all forms of physical media as content migrates into the digital world, Redbox’s low price point for rentals (starting at $1.50 a night) and wide distribution in grocery, drug and big-box stores means it will likely remain a retail presence. It said in May it will add 1,500 net kiosks, giving it 41,500 nationwide. One reason for the company’s digital download push is the reality of physical sales, however. In the second quarter, according to industry consortium the Digital Entertainment Group, kiosk spending fell 19.3% to $306.5 million.
In the 2000s and into this decade, Redbox was embroiled in legal disputes with several studios over the window studios insisted on before it would allow Redbox to start renting discs at kiosks. A 28-day delay became typical, though Lionsgate, one major distributor that has embraced the potential of Redbox rather than fighting it in court, last summer agreed to extend an arrangement under which it releases films day-and-date via Redbox.