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NCR Concludes its First Direct Studio Supply Deal with Universal

October 08, 2010

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NCR signed its first direct studio supply deal, with Universal, October 6 - inking an agreement that includes a 28-day holdback window on most of that studio's titles but allows the testing of some titles day-and-date (reportedly at higher-than-usual rental fees) with store rental/retail and video-on-demand. The arrangement begins immediately with Universal's Robin Hood (September 21) and Get Him to the Greek (September 28). NCR, which operates nearly 7,000 Blockbuster Express-branded kiosks and a handful of others, said it will test yet-to-be-named Universal titles with no rental holdback window in select metropolitan areas. It also plans to test retail sales of certain titles.

The physical media landscape is becoming increasingly complex as studios and distributors look for ways to halt multi-year declines in both the rental and retail channels - neither of which has been helped much by the introduction of Blu-ray Disc. Overall rental declines have begun slowing, thanks to growth in both the kiosk and subscription segments. Despite the continued decimation of the traditional rental segment, total rental spending is expected to stabilize over the next few years, but that's little consolation to studios, for whom that channel generates far less revenue per transaction. Three of six major studios have introduced windows to give store-based and digital channels an advantage over kiosk and subscription rental.

Universal, Fox and Warner have negotiated contracts implementing 28-day holdbacks of new rental titles in kiosks and mail-order, allowing those titles a month of exclusivity at bricks-and-mortar rental and retail outlets, and video-on-demand and network-delivered EST services. On the other hand, Paramount, Lionsgate and Sony signed no-holdback contracts with kiosk rental leader Coinstar subsidiary Redbox. Disney isn't in a long-term contract to go either way but generally releases to both the kiosk and subscription rental channels without holdback windows. And, in a move that surprised many, no-window Sony just went for a 28-day holdback for new-release Karate Kid (October 5) with Netflix, though not Redbox because of their long-term deal.

Find Out More > iSuppli | Screen Digest US Video Intelligence Service

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