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An influential Wall Street analyst is calling on Disney CEO Bob Iger to alter his strategy involving DVD kiosks in order to “kill Redbox” and “help stop the devaluation of movies.”
Richard Greenfield of BTIG Research wrote Friday that Disney should join Fox, Universal and Warner Bros. in establishing a 28-day window on Redbox. Better yet, all studios should slap a window of 45-60 days on Redbox.
The timing of Greenfield’s open letter to Iger is based on Thursday’s statement from Coinstar CEO Paul Davis that the company’s Redbox unit would miss revenue expectations, and he laid the blame on the studios that no longer give them instant access to newly released DVDs.
“This was Redbox’s first holiday season with 28-day delayed titles, and we underestimated the impact that the delay would have on demand during the fourth quarter,” Davis said.
That statement, made after the closing bell Thursday, caused shares of Coinstar to plunge 27% on Friday to $41.50.
It also caused Greenfield to implore Iger to hit the company while it’s down by inflicting more windowing pain on Redbox and, in doing so, “send a strong message to the other studios that a key supporter had changed their view.”
“Not only does Disney/Pixar have the most valuable brand in the movie business,” Greenfield wrote, “the addition of Marvel increases the brand value of their content even further.”
He said that while he doubts Paramount, Sony or Lionsgate would shift to a window any time soon since they have formal deals with Redbox, “We never understood why Disney gives Redbox DVDs day-and-date with a DVD’s release.
“Enabling $1 billion box-office films to be rented for $1 a day the same day they are for sale at Walmart for $15-$25 is illogical to us,” he said.
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