Walt Disney (DIS) is increasing the wholesale prices it charges for DVDs to movies-by-mail leader Netflix (NFLX) and leading movie-rental kiosk operator Redbox, as it looks to benefit further from being the only major studio to sell DVDs to the two companies for rental as soon as they go on sale to the public, the Los Angeles Times reported, citing people familiar with the process.

Disney will charge as much as $17.99 per DVD during the first 28 days a video title is on the market. After 28 days -- the point at which the rest of the major studios start distributing their titles to Redbox and Netflix -- Disney will drop its price to $10.79 per DVD, the newspaper reported. Disney first boosted wholesale DVD prices with the Jan. 25 home-video release of Secretariat, the L.A. Times reported.

Netflix spokesman Steve Swasey declined to comment. Disney and Redbox representatives didn't immediately respond to requests for comment from DailyFinance.

Disney hopes to further benefit from the success of Netflix and Redbox, whose growth has hastened the demise of video chains such as Blockbuster and Movie Gallery. Disney said last week that operating profit for its studio entertainment operations for the quarter that ended Jan. 1 surged 54% from a year earlier largely on the success of home-entertainment titles such as Toy Story 3.

Netflix's fourth-quarter earnings surged 52% from a year earlier as the company's video-subscription service surpassed 20 million customers. Redbox parent Coinstar's (CSTR) fourth-quarter net income tripled as the company reported a 31% jump in sales and surpassed the 30,000-kiosk mark.


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psychofalcon2000

Who needs to get the disney movie right when it is released anyway? If I were redboxI would delay acquiring these movies until the wait time has expired to drop cost back inline to 10.79 per item like the rest. This is not a good business stance by disney. It was a good sense to bypass the delay and let redbox offer these movies previously with no penalty pricing, but now it remains to be seen if redbox will even want these titles at a 75% premium. Personally, I agree what has Disney put out that cant wait to be seen for a couple of weeks. Toy Story 3, yeah it was cute, but I did not see it until last week, with my kid. Just like the fact of going to the Movies now is 10.00 a ticket. I refuse to pay that riduculous price, when I can spend a dollar, and enjoy it in my own home.

February 18 2011 at 4:05 AM Report abuse -1 rate up rate down Reply
Sun

For the most part, I don't rely on Netflix for new movies. I use them for their vast library of British films and old and off the wall films. They are the only place to get Dr. Who, and many others. I use Hulu and IMDB for others as well. I can go to Family Video for most new rentals. Blockbuster's prices are way too high. It is unfortunate that Disney decided to wait until Netflix raised their prices.

February 16 2011 at 11:42 PM Report abuse +4 rate up rate down Reply
dannin

Now if they only made movies people actually want to see....

February 16 2011 at 5:47 PM Report abuse +5 rate up rate down Reply