Redbox Agrees to Delay in Renting New Warner Bros Movies

Coinstar Inc.’s Redbox unit, which rents movies for $1 a day from vending machines, reached an agreement with Warner Bros. that gives the studio 28 days to sell DVDs before they become available in the company’s kiosks.

The two-year accord ends a lawsuit Redbox filed against the Time Warner Inc. film studio in August to gain access to the latest movies, the companies said today in a statement. Financial terms weren’t disclosed.

Warner Bros. made a similar deal last month with Netflix Inc., the largest mail-order movie rental service. The sale-only window allows the studio more time to sell home videos through retailers and gives Redbox a lower price for DVDs it buys for its kiosks.

As a result of the agreement, Coinstar said it expects first-quarter revenue of $315 million to $335 million and fully diluted earnings of 8 cents to 14 cents a share.

Coinstar, based in Bellevue, Washington, rose $1.69 to $28.80 in extended trading after the announcement. The shares advanced 50 cents to $27.11 at 4 p.m. New York time in Nasdaq Stock Market trading.

The company also reaffirmed previous guidance for 2010, predicting revenue of $1.47 billion to $1.57 billion and earnings of $1.50 to $1.65 a share on a fully diluted basis.

New York-based Time Warner rose 82 cents to $28.70 in New York Stock Exchange composite trading and has increased 60 percent.

(Source: Business Week)


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