Sony inks Redbox deal

Brings studio's content into 17,000 self-service kiosks

Sony Pictures Home Entertainment has signed a multiyear distribution agreement with Redbox Automated Retail that will put Sony's DVDs, direct-to-video movies and catalog titles into Redbox's 17,000 self-service kiosks where movies rent for $1 a night.

Other studios have eyed the growing network of Redbox kiosks warily, concerned that bargain DVD rentals will further erode DVD sales. Redbox even is battling Universal in court, claiming the studio is trying to limit third-party distributors' dealings with Redbox.

Sony, in contrast, has decided not only to embrace Redbox but also to deal with the Illinois-based company directly. While Sony refused to comment on the terms of the deal, the Wall Street Journal reported that Sony is selling Redbox its DVDs at a lower price than Redbox would pay a wholesaler. Redbox, in turn, has agreed not to sell used Sony DVDs.

"Our consumers have always been the best barometer of where our business needs to go, and clearly Redbox has become an important distribution option," SPHE president David Bishop said, explaining that the deal will increase availability of Sony titles and eliminate a source of used titles.

Redbox, a subsidiary of Coinstar, has built a nationwide network of kiosks in such locations as McDonald's restaurants, Wal-Mart, Walgreens and grocery and convenience stores.