Disney Raises Prices Charged to Redbox, Netflix for New-Release DVDs (Report)
The Walt Disney Co. has quietly raised the prices it charges Redbox and Netflix for new-release DVDs, according to the Los Angeles Times.
The move comes amid pressure from Wall Street for the company to follow other studios' lead in imposing delays on when the rental services have access to new releases.
The company will now charge Redbox and Netflix, which offer movie rentals at low prices, the full wholesale rate for its DVDs, which amounts to as much as $17.99 apiece, according to the Times, which cited anonymous sources.
That's said to be more than the studios typically charge their largest wholesale customers but less than big retail chains like Wal-Mart charge consumers for high-profile new releases.
The company first started charging the higher price with Secretariat, which was released on DVD on Jan. 25.
According to the Times, Disney executives believe sales of the company's family friendly fare -- in particular, animated movies -- aren't likely to be affected by rentals because viewers typically prefer to own those titles for repeated viewing.
Meanwhile, other studios -- including Fox, Universal and Warner Brox. -- have refused to give the two companies access to new releases for 28 days over concerns that the low costs will hurt DVD sales. Sony also employs the delay but only for movies that gross more than $50 million domestically.
But Disney and Paramount have been supplying the two companies with DVDs the same day they go on sale.
The wholesale price Disney charges Netflix and Redbox for DVDs reportedly would drop to $10.79 at 28 days after they go on sale.
Redbox president Mitch Lowe confirmed to the Times that his company has a new agreement with Disney but added that Redbox will continue to offer Disney DVDs the same day they go on sale for a nightly rental fee of $1.
Netflix and Disney declined to comment.