Blockbuster Inc. (BBI) has announced that it has agreed to a four-year deal with the Weinstein Co. for exclusive U.S. rental rights.
The move for both the companies comes from the fierce competition from its rivals for market share. Blockbuster has found their in-store rentals dropping in their competition with Netflix (NFLX) Inc. This exclusive deal gives them a competitive edge on everybody, with nobody else 
being able to offer these specific movies.
The deal itself gives Blockbuster exclusive rental rights for Weinstein Co. theatrical releases and direct-to-video rights beginning January 1, 2007. Rental revenues will be shared between the two companies.
Harvey Weinstein (R) and John Antioco - Reuters
There is also a minimum guarantee by Blockbuster based upon performance for theatrical releases and costs for the direct-to-video movies.
Blockbuster has also agreed to provide specific store space for weinstein titles and an Internet display as well.
When asked about the deal limiting the Weintein Co.'s options to offer movies, Harvey Weinstein said: "Their concentration of stores and online footprint is too appealing not to be part of."
Comment Preview