Disney to Charge Netflix, Redbox Full Wholesale Rates

The Los Angeles Times reports that Walt Disney (DIS) has quietly decided to raise its wholesale prices on new-release DVDs for Coinstar (CSTR), owners of the Redbox, and Netflix (NFLX). Disney will now charge Redbox and Netflix its full wholesale rate, which may be as high as $17.99 for DVDs, sources told the LA Times.

The move marks a subtle shift in Disney’s relationship with the Web’s top video-rental stores Netflix and Redbox, and one that stands in contrast with most of Hollywood’s dealings with the two rental giants. Disney’s logic here is that consumers will want to own the content for repeated viewing and therefore is not likely to be hurt by rentals.

Disney, based in Burbank, California, gained $0.21, or 0.58 percent, to $43.34 at 1:08 p.m. New York time in NYSE trading. Earlier, it rose as high as $43.43. NFLX, based in Los Gatos, fell $2.39 to $238.35 on the Nasdaq. Coinstar shed $1.16, or 2.66%, to $42.58 in recent action.

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About Ron Haruni 1069 Articles
Ron Haruni is the Co-Founder & Editor in Chief of Wall Street Pit.

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