Redbox 2010 Annual Report Download - page 80

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Lionsgate Agreement
On August 10, 2009, our Redbox subsidiary entered into a Home Video Lease Output Agreement (the “Lionsgate
Agreement”) with Lions Gate. Redbox estimates that it will pay Lionsgate approximately $102.4 million beyond
December 31, 2010.
Under the Lionsgate Agreement, Redbox agrees to license minimum quantities of theatrical and direct-to-video
DVDs for rental in each location that has a Redbox DVD kiosk in the U.S. Under the Lionsgate Agreement,
Redbox should receive delivery of the DVDs by the “street date,” defined in the Lionsgate Agreement as the
initial date on which the movies are distributed on a rental basis to the general public for the purpose of
non-commercial home entertainment viewing.
Sony Agreement
On July 17, 2009, Our Redbox subsidiary entered into a copy depth license agreement (the “Sony Agreement”)
with Sony, a subsidiary of Sony Pictures Home Entertainment Inc. Redbox estimates that it will pay Sony
approximately $626.5 million beyond December 31, 2010. Coinstar has guaranteed up to $25.0 million of
Redbox’s liability under the Sony Agreement. In addition, Coinstar has granted Sony 193,348 shares of restricted
stock. For addition information see Note 11: Share-Based Payments.
Under the Sony Agreement, Redbox agrees to license minimum quantities of theatrical and direct-to-video DVDs
for rental in its DVD kiosks in the U.S. Under the Sony Agreement, Redbox should receive delivery of the DVDs
by the “street date,” defined in the Sony Agreement as the initial date on which the movies are distributed on a
rental basis to the general public for the purpose of non-commercial home entertainment viewing.
Summary of Studio Agreement for DVD Purchase Commitments
A summary of the estimated commitment to be paid pursuant to the above agreements as of December 31, 2010
was as follows (in thousands):
Year Ended December 31,
Total 2011 2012 2013 2014 2015
Paramount ......................... $ 288,648 $ 70,851 $ 72,599 $ 72,599 $ 72,599 $ 0
Universal Studios ................... 76,814 58,568 18,246 0 0 0
20th Century Fox ................... 243,505 54,318 55,444 55,444 55,444 22,855
Lionsgate ......................... 102,406 27,337 28,234 28,234 18,601 0
Sony ............................. 626,510 167,419 168,177 168,177 122,737 0
Warner ........................... 66,215 54,422 11,793 0 0 0
Others ............................ 42,068 21,115 20,953 0 0 0
$1,446,166 $454,030 $375,446 $324,454 $269,381 $22,855
Revenue Share Commitments
Certain of our Retailer agreements include minimum revenue share commitments through the term of the
arrangement. Our minimum commitments under these agreements are presented in the following table (in
thousands):
Year Ended December 31,
Total 2011 2012 2013 2014 2015
DVD Services ............................... $ 63,416 $25,200 $18,283 $12,235 $7,698 $0
Coin Services ................................ 61,667 20,000 20,000 20,000 1,667 0
$125,083 $45,200 $38,283 $32,235 $9,365 $0
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