From a report: Indeed, Eric Handler, analyst with MKM Partners in Washington, D.C., questioned how Redbox will be able to handle the financial commitments...
“Potentially they could have well north of a $1 billion worth of commitments over the next five years,” Handler said. “That’s a lot of money for guarantees despite their growth.”
Lionsgate’s deal, as did Redbox’s with Sony, does not include Blu-ray Disc.
So they are guaranteeing to pay a huge amount to the studios for regular DVDs that are fast becoming obsolete! And they also lose the revenue source of being able to re-sell these DVDs as they have to destroy them. Looks like Redbox has no leverage and is forced to sign these uneconomical deals while at the same time spending a huge amount of money to set up kiosks that will be of no use in a few years.