Paramount and Redbox in Trial Deal

HOLLYWOOD: Paramount Home Entertainment has agreed to a trial license program with DVD kiosk operator Redbox, covering titles through the end of 2009, with movies to be made available as soon as they are released to retail.

Universal, Warner Bros. and Twentieth Century Fox have all placed 28 to 30-day limits on new releases to Redbox, which subsequently filed suit against all three studios.  The trial deal with Paramount requires that Redbox destroy the DVDs once they are removed from the kiosk. Following the four-month trial period, Paramount has the option to extend the program to 2014, with an out clause after two years. In addition, Redbox will provide Paramount with rental data on the studio’s titles.

Reports indicate that under a revenue-sharing agreement, Redbox estimates it will pay Paramount roughly $575 million if the deal runs through the extended period.