The company’ theatrical/DVD division recorded $291 million in operating income for the the third-quarter of 2009, which is a 6% increase over the same period in 2008. Time Warner CEO Jeff Bewkes feels the home entertainment business has begun to steady itself after a period of decline:

“On the long-term home video outlook, the home entertainment environment is stabilizing and will continue to into next year. . . The retail environment is still challenging, with a little less shelf space for DVD. But we see pressure on physical sell-through moderate, and we do expect to see continued growth in rental, electronic sell-through and Blu-ray.”

As mentioned yesterday regarding Redbox earnings, the vital fourth-quarter will either confirm Bewkes’ assessment or demonstrate its fallacy. Do you think he’s right, Insiders? Is the pressure on DVD sell-through really “moderate”, and is the market finally finding its feet again?

[via Video Business]

• Coinstar announces earnings, Redbox drives growth
• Redbox Third-Quarter Revenue Up 90%
• Movie Gallery to Close up to 450 Locations

Redbox’s sales growth surpassed marketing and administration costs, as operating income doubled to $34.5 million and same-store sales increased by 26%. And there’s plenty of room to grow, according to Coinstar CEO Paul Davis, who said that “We think there’s a lot of white space” in the kiosk market.

Davis estimated that Redbox’s current share of the U.S. DVD rental market is about 15%, and said that digital delivery is still in its infancy and will not pose a threat in the near future. Overall, Coinstar estimates that its 2009 DVD rental revenue will reach about $770 million. This means the company is anticipating about $230 million in Q4 DVD revenue, which would be a 72% increase over the same period in 2008. The sanguinity of these projections demonstrates the company’s continued confidence in its business model and title aquisition capabilities.

As great as this news is for Redbox and its parent company, the true measure of the kiosk vendor’s strength will come in the fourth-quarter numbers, which will cover a period when Redbox is denied street date titles by three major studios.

Are you encouraged by this report, Insiders? Can Redbox keep the good times coming in the crucial final quarter of the year?

[via Video Business]

• Analyst Cautiously Optimistic on Redbox’s Chances
• Coinstar CEO: Redbox in “Daily” Negotiations with Studios
• Coinstar to Own 100% of Redbox, Earnings Up 374%

According to the official press release:

“With the new Best Buy service, consumers will have access to buy or rent an extensive library of premium content including new movies, TV shows, independent films, and older catalog movies, which they will be able to access on devices in the broad ecosystem. It is anticipated that new titles will often be available on the same day they become available on DVDs in retail outlets.”

Ryan Pirozzi, director of digital media for Best Buy, is bullish on the future of digital downloads:

“Digital is developing as a channel and we’re forecasting that by 2012 it will be a significant, double-digital percentage of the movie business,”

While acknowleding that his company’s fledgling service will be entering a very competitive marketplace, Pirrozi is confident that Best Buy’s service will be able to survive and thrive:

“This is certainly a very crowded space, and we’re going to work to translate our customer insights into a more compelling service than those out there currently,”

It seems like almost every week we hear about a new entry into the digital download fray. How will Best Buy and CinemaNow’s partnership fare, Insiders? And where will all this downloading leave Redbox? Give us your opinions in the comments.

[via The L.A. Times and Engadget]

• Disney Wants to put Movies in the Clouds
• Netflix CEO Looks Into the Future and Sees…DVDs
• High-Def Discs Need a Blu Christmas in ‘09

These tests support Coinstar CEO Paul Davis’ comments last month that at least some Redbox kiosks had software installed that would allow variable pricing.

Our old friend, Merriman Curhan Ford analyst Eric Wold, feels that even if higher rental prices became permanent, Redbox would not lose many customers.

“I still believe consumers will view the value and convenience of Redbox for the immediate gratification of a DVD rental as superior to the other rental options out there. . . Personally, I’m a little concerned about the negative impact to the ‘$1 per day’ marketing message that is now so widely associated with the Redbox brand. . . However, if Redbox is able to push through a higher price point without negatively impacting the brand or traffic/usage to any great degree, then the positive benefit to margins could be substantial.”

Wold also feels that if they are successful, higher pricing models may be just the sort of compromise studios are looking for in their battle with Redbox. Either way, Wold thinks that higher prices would have a positive effect for Redbox because they would help offset the increased costs incurred by the company when it acquires titles from retail channels.

Is this limited, higher pricing test going to come and go without lasting effect, or is this the beginning of the end for $1 per night Redbox rentals? If higher prices become the norm at kiosks nationwide, will it affect your Redbox habits? Let us know in the comments.

[via Home Media Magazine]

• Redbox to Test Higher Blu-ray Prices
• Analyst: Redbox Should Make Deal with Walmart
• Hollywood Video Founder’s Stores Offer $.99 Rentals

Merriman Curhan Ford analyst and frequent Redbox commenter Eric Wold believes that Paramount will make its decision by the middle of December. Says Wold:

“We believe investors will be watching for that decision closely given that Paramount will have a significant level of information on rental trends and sales information at its fingertips ahead of time. . . Clearly, if Paramount believes that Redbox is negatively impacting sales trends and/or not positively impacting overall home video revenues, then they are unlikely to extend the deal.”

With Transformers: Revenge of the Fallen already released on DVD and BD, and G.I. Joe: The Rise of Cobra and Star Trek coming out this month, Paramount has some of the biggest films of the year coming out on disc this quarter. With so much money at stake, it’s certain that Paramount will take a long hard look at Redbox’s impact, positive or otherwise, on its revenues as it considers its decision.

Which way will they go, Insiders? Is Paramount going to decide it’s got a good thing going with Redbox, or will it be “hasta la vista” for the distribution deal?

[via Home Media Magazine]

• Full Count: Redbox Strikes “Trial” Deal with Paramount
• Time Warner CEO: DVD Market Stabilizing
• Paramount Loves Being in the Red

Summit Entertainment
Summit is perhaps best known as the studio behind last year’s megahit vampire romance Twilight and its upcoming sequel(s). As part of the Summit deal, Redbox has pledged to destroy the Summit products when they are removed from kiosks. Stephen Nickerson, Summit’s president of home entertainment had the following to say about the new deal:

“Having Summit’s films distributed through the Redbox network provides consumers with greater access to our broad range of titles. . . In addition, by Redbox agreeing to destroy DVDs once they pass their rental life, the risk of low-cost, previously-viewed DVDs being sold into the market is lowered. We see this agreement as a win for both Summit and redbox.”

Redbox CEO Mitch Lowe was also enthusiastic about the agreement:

“We are very pleased to enter into this agreement with Summit as it underscores our commitment to creating winning relationships for our customers and studio partners. . . This agreement ensures that we will continue to deliver engaging and popular Summit movie titles to consumers at our kiosks when they are first released at an affordable price.”

NCircle Entertainment
NCircle is the distributor behind many popular Parent’s Choice and Emmy award-winning children’s titles, including The Jim Henson Company’s Sid the Science Kid, Dr. Seuss’ The Cat in the Hat Knows a Lot About That!, Dive Olly Dive!, WordWorld, Richard Scarry’s Busytown Mysteries, Johnny Test, Mighty Machines and others.

Debbie Ries, senior VP and general manager of NCircle was effusive about the effect the agreement would have on customers, as well as both companies’ fortunes:

“We will increase the visibility and reach of our titles nationwide through this two-year distribution agreement with Redbox. . . Redbox rentals allow the consumer to try before they buy. We are confident that the positive rental experience at Redbox, coupled with the quality and appeal of our content, will translate into increased DVD sales at retail. This agreement is an exciting opportunity for NCircle, Redbox and the consumer.”

As with the Summit deal, Redbox’s Mitch Lowe praised the agreement and its benefits for Redbox customers:

“Redbox continues to offer families affordable home entertainment. . . The agreement with NCircle provides busy moms and dads with convenient access to their children’s favorite movie titles at a value through Redbox locations nationwide.”

Ms. Ries’ “try before they buy” comment should be especially heartening for Redbox fans hoping to see more major studios and distributors looking for ways to benefit from Redbox rather than squash it. Let us know in the comments what you think about these new deals Redbox has made.

[via Reuters (Summit) and Reuters (NCircle)]

• Redbox Goes Fox Hunting, Files Lawsuit
• Redbox CEO: Less is More
• Official Redbox Response to Fox’s Demands: “Eat My Shorts, Man!”

Today’s code is:

TEGJ6FD [NOTE: multiple codes today, see comments]

Expires tonight (Monday, Nov 2) at midnight Central Standard Time.

What will you rent today?

Want more FREE movies?
Click here for more Redbox Codes

• Monday Promo Code – April 6, 2009
• Monday Promo Code – May 11, 2009
• Monday Promo Code – April 13, 2009

Aliens in the Attic PG
Starring: Ashley Tisdale, Robert Hoffman
Year: 2009
movie details / trailer

Command Performance R
Starring: Dolph Lundgren, Dave Legeno
Year: 2009
movie details / trailer

Dora's Christmas Carol
Starring:
Year:
movie details / trailer

G.I. Joe: The Rise of Cobra PG-13
Starring: Dennis Quaid, Channing Tatum
Year: 2009
movie details / trailer

Hardwired R
Starring: Cuba Gooding Jr., Val Kilmer
Year: 2010
movie details / trailer

The Marc Pease Experience PG-13
Starring: Jason Schwartzman, Ben Stiller
Year: 2009
movie details / trailer

The Taking of Pelham 1,2,3 R
Starring:
Year: 2009
movie details / trailer

Thomas: Hero of the Rail NR
Starring:
Year: 2009
movie details / trailer

• Redbox New Releases for October 27, 2009
• Redbox Top 10 DVD Rentals – June 9-15, 2008
• Redbox New Releases for October 6, 2009

Movie Gallery, which just emerged from bankruptcy last year, is apparently struggling to keep up with the leases on at least some of its locations. According to Video Business, the rental chain has set up a “real estate hotline” for its landlords. One landlord consulted by Video Business stated that Movie Gallery was 20 days past-due on rent that was owed to him.

The embattled chain’s Chief Marketing Officer, Clifford Torng, had the following to say about the situation:

“I don’t think it’s any secret that the industry is experiencing quite a radical shift. . . We’re looking to position ourselves as best we can for the long term.”

Despite the closures and likely continued bleeding of customers to Redbox and Netflix, Torng says that Movie Gallery will be staying in business:

“We certainly see a continued role for brick-and-mortar stores like ourselves,” Torng said. “There is a significant number of customers who still enjoy the process of browsing in a physical store for movies.”

Is there hope for Movie Gallery yet, Insiders? Are you one of Torng’s “significant number” that enjoy the traditional rental store experience?

[via Bloomberg and Video Business]

• Redbox DVD rental kiosks take over the world
• Blockbuster to Close Nearly 20% of Store Locations
• Redbox + Wal-mart = The Ultimate Video Store

Streaming media analyst Dan Rayburn says that, according to a source of his that is ” involved in the project”, Nintendo and Netflix are currently engaged in testing the streaming service that will arrive on the Wii “very shortly.”

Says Rayburn:

“What I’m hearing is that Nintendo originally planned to bring the Netflix service to the Wii before the end of this year, which still might take place, but that Nintendo is also considering holding off on the Netflix service until they release their next generation Wii HD unit in early 2010.”

If Rayburn’s source is accurate, this move could potentially add Netflix streaming to the 21 million Wii units sold in the U.S. thus far. When you take into account the tens of millions of Xbox 360s and PS3s the service is already or will soon available on, the signals are clear that Netflix is making a major play for living room streaming domination.

Let us know your thoughts on this massive expansion of Netflix’s streaming capabilities, Insiders. Do you currently use this service, or will you be doing so in the near future? How, if at all, will this affect your Redbox rental habits? Were you aware of a Wii HD in the works? Should I stop asking questions and just let you get to commenting?

[via Silicon Valley Insider and Business of Video]

• Netflix HD Streaming on the XBox 360 Goes Live
• Netflix CEO Looks Into the Future and Sees…DVDs
• Blockbuster Set-top Box Officially Announced