Netflix and NCR reach DVD distribution deals

By Sue Zeidler

(Reuters) – Netflix Inc on Wednesday said it reached a deal to rent Sony movies 28 days after they go on sale, while NCR, which rents DVDs at nearly 7,000 Blockbuster kiosks, reached a similar deal with Universal Studios.

NCR said it reached a studio distribution deal with General Electric Co’s Universal, also agreeing to wait 28 days after the Universal movies go on sale.

A spokesman for NCR said it was working with many studios for further such deals as it ramps up the Blockbuster kiosks to compete with Coinstar Inc’s Redbox kiosks and Netflix.

Studios are seeking deals requiring Redbox and Netflix to wait 28 days after a DVD or Blu-ray disc is released because they fear these low-cost outlets will threaten sales.

Sources familiar with the matter said that News Corp’s Twentieth Century Fox and Sony were among the studios talking with NCR.

NCR and Universal said their deal also involved a test of a premium rental offer on select Universal titles at the kiosks the same day they are released for sale.

Universal said it will supply NCR with new-release DVD and Blu-ray titles effective immediately in select markets, beginning with “Robin Hood” and “Get Him to the Greek.”

“Our agreement to test premium day-and-date offers and new DVD sales will help us identify new outlets for our movies while giving our customers the flexibility and choice they want in their entertainment purchases,” said Craig Kornblau, president, Universal Studios Home Entertainment.

The NCR kiosk initiative represents part of video chain Blockbuster Inc’s turnaround efforts. Blockbuster filed for bankruptcy protection earlier this month, battered by online and mail-order services such as Netflix that have transformed how customers rent movies.

Blockbuster has said it plans to reinvent itself as a leaner competitor with more digital video offerings, including offerings on mobile devices and kiosks.

For Netflix, the Sony deal reflects a continuation of its expansion efforts. The video rental company has been focusing on its growing streaming business and has agreed in the past with studios to the 28-day delays in exchange for expanded licenses to studios’ streamed content.