Redbox to pay Sony $460 million for DVDs

Coinstar Inc.'s Redbox division said it will pay Sony Pictures an estimated $460 million over five years to carry the studio’s DVDs in video-rental kiosks.

Oak Brook-based Redbox agreed to license a minimum number of Sony Corp. DVD's for its 17,000 U.S. rental kiosks, parent Coinstar, based in Bellevue, Washington, said today in a regulatory filling. Sony, based in Tokyo, may terminate the agreement on Sept. 30, 2011, according to the filing.

Sony videos are expected to account for 20 percent of all the DVDs Redbox licenses or buys in 2009, Coinstar said. Redbox should get delivery the same day movies are distributed on a rental basis for home viewing, according to the filing. Walt Disney Co. and Lions Gate Entertainment Corp. also have agreed to allow Redbox to sell their DVDs, the Wall Street Journal reported yesterday, citing people familiar with the matter.

Redbox operates kiosks that offer self-service DVD rentals for $1 each in grocery stores and fast-food outlets. Its locations include McDonald's restaurants and Wal-Mart stores, Sony said in the statement.

Coinstar rose $1.86, or 6.5 percent, to $30.32 at 4 p.m. New York time in Nasdaq Stock Market composite trading. The company, which obtained full ownership of Redbox in February by purchasing a stake held by a McDonald’s Corp. unit, has gained 55 percent this year.

Sony's U.S. traded shares gained 1 cent to $24.64 in New York Stock Exchange composite trading and have grown 13 percent this year.