DEG Panel: Transactional Business Still Hardy — and Poised for Takeoff

Despite being squeezed by the pandemic, the transactional business is still sturdy and is poised to take off once new releases in the pipeline grow from a trickle to a steady stream.

That’s according to Galen Smith, CEO of Redbox, and Eddie Cunningham, the former Universal Pictures Home Entertainment president who now runs Studio Distribution Services, the Universal-Warner Bros. disc distribution joint venture. The two executives spoke on a virtual DEG Expo panel March 24 moderated by Media Play News publisher and editorial director Thomas K. Arnold.

As industry pundits have observed, content in the transactional arena, which includes physical disc and digital purchases and rentals, dwarfs what consumers can find via subscription or other streaming services. That content has helped the transactional business survive recent jolts, the executives said.

Even the Blu-ray Disc and DVD business, which has been steadily declining for the last decade, remains a viable business, Cunningham said.

“In 2020 despite a pandemic and despite all the pressure of retail closures around the world … and pretty much no new releases after the first couple of months of the year — there’s still a $7 billion retail market, globally,” Cunningham said of the disc business.

“Obviously the last few months, there haven’t been that many new releases. But as that starts to come back in the second half of this year I think you’re going to see a real resurgence,” Smith added, noting that Redbox, with kiosk rentals driven by new releases, is looking forward to a more consistent flow of new content.

Cunningham said he’s been getting a similar message from the big retailers.

“Everybody’s incredibly excited about the new releases starting to come back into this business,” he said. “And I think we feel good about the fact that the big retailers … seem very, very committed to this category. We’ve got new titles every single week. We spend marketing money. We drive people into stores. We introduce fun. We introduce theater into the stores. … So a lot of them are pretty excited about us getting back into the new-release business. … Maybe we could even find a way of sort of growing this [physical] business or certainly hugely flattening the decline over the next year or two after the numbers we made during the pandemic.”

In the meantime, Cunningham said catalog has been picking up the slack, with such series as “Harry Potter,” “Game of Thrones,” “The Office” and even children’s stalwart “Curious George” selling well despite streaming availability.

“If content is available on subscription services, you can still sell a lot of content physically on those same franchises,” Cunningham noted.

“Then there’s a huge amount, about 40% of consumers, who’ve never ever until this day ever transacted digitally, so they’re a huge target for us,” he said, adding “I think physical’s going to be around for a long time to come.”

The disc rental business, which Redbox dominates with thousands of kiosks in the United States, is here to stay as well, added Smith.

“We obviously have a view that it’s going to be sustainable for the long term,” he said. “It’s a great value to consumers. It’s incredibly convenient. … The fact that we’ve got 41,000 kiosks around the U.S. really helps with that. I think what we’ve been able to do is augment that experience. We’ve got this massive loyalty program with over 37 million people in it, and so we’re rewarding them for behavior and then rewarding them with things like free content and so it gives up a great opportunity for us to reinforce that value ecosystem.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Redbox marketing makes sure to let consumers know when new releases are available and doesn’t discriminate between the different ways a consumer might access content. The company offers consumers both physical and digital transaction options, letting them choose.

“We’re communicating with them on a regular basis in terms of what are those [new release] movies, and again, however you want to watch it, physically or digitally, we can be there to serve you with that,” he said.

Even though the company is offering a digital alternative, physical transactions aren’t suffering, Smith noted.

“Even when our customers started to transact digitally, it didn’t mean they stopped transacting physically,” he said. “They actually started transacting physically more. It reminded them again of all these great new movies that are available.”

As head of the disc distribution joint venture, Cunningham said he’s tasked with creating efficiencies and providing a focus on the physical business. The joint venture’s mantra is “two plus two equals five,” to make a bigger whole from the combined parts, he said.

Follow us on Instagram

“The coming together of Universal and Warner and other third-party distribution partners is going to enable us to do things like share boxes coming out of Technicolor, which in turn saves a lot of in-store labor, transport costs and so on,” he said. “I think we’re in a position to start maybe talking a bit more again about some front-of-store displays in some of these big retailers where we’ve lost that.”

Two plus two equals five also means finding ways to leverage the studios’ combined content.

“Over the next year or 18 months you’re going to see some amazing things coming out of [the joint venture],” Cunningham said. “There’s going to be huge opportunities on Middle Earth, DC, Bond, classic monsters. It’s actually the 90th anniversary of Dracula coming up, so we’ve got an opportunity around anniversaries. ‘Fast and Furious,’ ‘Jurassic,’ ‘Dune,’ ‘Halloween,’ there are huge opportunities to draft off these kinds of things.”

He also envisioned boxed sets of titles from different studios as an added bonus for consumers.

“We’re going to work incredibly hard to see how we can put the two studios’ content promotions together and make something bigger,” he said.

Redbox, too, is looking to combine the advantages of different businesses. In addition to its digital and physical transactional offerings, the company also has ad-supported streaming and even a content acquisition and production arm.

“In terms of Redbox Entertainment, we have a ton of data obviously about what actors work, what genres work, and so what we want to do is say, ‘OK, we’re seeing a little less product from the studios, let’s go ahead and buy it, acquire it, produce it ourselves,’” Smith said. “We’re basically making sure that we program to our consumers what we know they are going to want. And we’re agnostic so we’re releasing it across all the digital retailers and then we’re actually selling it to streamers as well on the backend. We just want to make sure there’s good content made for consumers.”

Redbox Entertainment Acquires Rights to Two New Movies

Redbox Entertainment, the movie acquisition arm of the packaged-media kiosk vendor/AVOD provider, continues to aggressively seek independent titles for distribution in the U.S. and abroad.

The unit reportedly acquired rights to two films, Chick Fight, starring Bella Thorne, and Shadow in the Cloud, a Toronto Film Festival entrant screened to potential buyers last week at a makeshift movie drive-in in downtown Los Angeles.

Shadow in the Cloud, written and directed by New Zealand filmmaker Roseanne Liang, stars Chloë Grace Moretz and Nick Robinson. Moretz plays a World War II pilot who joins the crew of a B-17 Flying Fortress. Onboard, Moretz comes into contact with a supernatural force that is destroying the plane from within.

Shadow in the Cloud is a captivating film with mesmerizing visual effects. Roseanne Liang’s distinct vision and Chloë Grace Moretz’s knock-out performance are guaranteed to bring audiences to the edge of their seats,” Peter Jarowey, CEO of Vertical Entertainment and Galen Smith, CEO of Redbox, said in a joint statement. “We’re thrilled to be partnering with the amazing female-led filmmaking team and Endeavor Content to bring this film to North American audiences next year.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Redbox also teamed with Quiver Distribution for Chick Fight, an action-comedy starring Malin Akerman (“Billions”), Alec Baldwin (“30 Rock”), Bella Thorne (Midnight Sun) and Kevin Connolly (“Entourage”). The film, by director Paul Leyden, is slated for release on Nov. 13.

Redbox Launches Movie Production Company

Redbox Entertainment has partnered with Thunder Road Films to co-launch Asbury Park Pictures — an indie production house tasked with producing original movies.

The films come with budgets from $10 million to $12 million each — and are largely filmed in Eastern Europe, South East Asia and Canada.

The movies will be distributed in the United States via Redbox’s more than 40,000  DVD/Blu-ray Disc rental kiosks and, digitally, through Redbox On Demand, the company’s transactional VOD platform. International distribution will be handled by third-party distributors.

Thunder Road Films is known for co-producing the “John Wick” franchise with Lionsgate. Initial Asbury Park movies include actioner/thrillers War Comes Home, Blacksite and Numb.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Asbury Park management includes Marc Danon, head of original content at Redbox Entertainment, who will spearhead the partnership with Thunder Road boss Basil Iwanyk; Mike Gabrawy, ex-head of production at Arclight Films; and Erica Lee, president of Thunder Road.

Marc Danon

The move into original content marks a switch of sorts for Redbox, which in 2014 shuttered Redbox Instant, a disc/subscription streaming service, due to not wanting to get into original content spending battles with Netflix, Hulu and Amazon.

Redbox in 2019 formed Redbox Entertainment with a mandate by its private equity owners to branch out into original content. The company than hired ex-Lionsgate executive Danon to head the venture.

Redbox Live TV Expands to 60 Channels; Adds Cheddar and Tastemade, Among Others

Redbox Aug. 13 announced new channel additions to its ad-supported live TV platform. The packaged media kiosk vendor said Tastemade’s Streaming Network, featuring original programming in the categories of food, travel, and home & design, and Cheddar are now live and will join a growing list of news, lifestyle, and sports entertainment programming.

Redbox Live TV, which launched earlier this year, now has more than 60 channels, including three Redbox channels for movie lovers. The channels include Redbox Rush (for action fans), Redbox Comedy (for those who love stand-up comedy and the best comedy movies) and Redbox Movies.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Within the past few weeks, Redbox Free Live TV has added nearly 20 channels. New channels added this week include Wired, Architectural Digest, Black News Channel, CBC (Canadian Broadcast Corporation), Go Traveler, Outdoor America, Hard Knocks Fighting. Channels recently added include America’s Test Kitchen, Complex, The Design Network, Real Nosey, Funny or Die, beIN Sports, Outside TV, Chive TV, Thrill One, Voyager Documentaries, Hungry and Just for Laughs Gags.

“We’ve seen significant viewership growth in the News, Lifestyle and Food categories,” Chris Yates, GM, Redbox On Demand, said in a statement.

Follow us on Instagram

Redbox Free Live TV can be accessed via Redbox.com, Roku, iOS and Android devices, Apple TV, Android TV, Vizio Smart TVs, LG TVs and Chromecast. The service doesn’t require a login, just click “Free Live TV,” choose a channel and start watching.

“We are excited to partner with Redbox on launching one of the first live news channels on their TV platform delivering top business and headline news to their customers,” said Priya Nevrekar, senior director of distribution and business development for Altice News.

“We believe that our premium programming is a great addition to Redbox’s lifestyle and entertainment offering and the continued growth of its streaming business as a powerful complement to its established kiosk footprint,” added Jeremy Strauss, head of business development at Tastemade.

With the launch of Redbox Free Live TV, the company continues its transformation into a multi-channel content provider and programmer. Last year, Redbox launched Redbox Entertainment, a new division to produce and distribute original content across its service. Through Redbox Entertainment, the company is developing a slate of movies that will be available through Redbox VOD and at kiosks.

Redbox Launches Content Acquisition and Production Arm

Redbox is revving up its efforts to provide original content to customers of its disc rental kiosks and Redbox on Demand transactional video-on-demand service.

The company on Oct. 25 announced the formation of Redbox Entertainment, a new label to acquire and produce content for Redbox’s 50 million U.S. customers.

“The Redbox brand is built on delivering the best selection of movies from the biggest blockbuster releases to films in genres and with actors that appeal to our loyal customers,” said Redbox CEO Galen Smith. “The formation of Redbox Entertainment leverages our deep insights to bring projects that we know appeal to our audience to deliver additional value and entertainment.”

Marc Danon has been tapped as senior advisor to head content acquisition for Redbox Entertainment. He reports directly to Smith.

Marc Danon

Danon previously was president of acquisitions and co-productions at Broad Green Pictures; prior to joining Broad Green in July 2015, he spent eight years at Lionsgate, most recently as SVP of acquisitions and business development. There, he worked on the acquisition of such films as Kevin Hart: Let Me ExplainJohn WickDear White PeopleA Most Wanted ManEverything Must Go and The Skeleton Twins.

Danon also built and managed third-party brands and partnerships with ABC, Codeblack, Comcast, ITV, Marvel, NBC, and Saban.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Earlier in his career, Danon held various acquisitions positions at Netflix, Catch 23 Entertainment and Artisan Entertainment.

“Marc is a terrific fit to lead the growth of Redbox Entertainment,” Smith said. “He’s a talented creative with an impressive track record as a champion of films that catch fire with audiences; and a skilled executive adept at maximizing distribution opportunities and cultivating strategic partnerships.”

Redbox Entertainment is funding, developing and producing projects across genres, with a focus on action, comedy, and suspense/thrillers, the company said.

Projects are being sourced now — directly and through a number of distribution partners and channels. New projects will be announced soon.

Content acquired by Redbox Entertainment will be available physically at Redbox kiosks and digitally via Redbox On Demand, as well as in downstream windows post-Redbox release.

Redbox reaches 50 million consumers across the United States at more than 41,000 kiosks and an expanding On Demand offering. The company’s loyalty program, Redbox Perks, has 34 million members.