Current Events in Business Research

Topics: Redbox, Research, Paramount Pictures Pages: 5 (1103 words) Published: September 28, 2014

Current Events in Business Research
Michael Njus
September 15, 2014
James Bankston
Current Events in Business Research

There are six basic stages to the research process. Stage 1 is clarifying the research question. This would be the process in identifying the problem that is prompting the research. Stage 2 is proposing research, which would be the act of identifying the resources necessary to do the research. The third stage is designing the research project, or deciding which method to use to gather the information. Stage 4 involves data collection and preparation, which is gathering the data and making it ready to be evaluated. Stage 5 would be the data analysis and interpretation stage. Stage 5 is defining what the data is saying about the problem. The final stage, stage 6 is reporting the results. This is breaking down the interpretation into a presentation that shows the meaning of the data collected. (Cooper & Schindler, 2014) This is the process used by Paramount Pictures recently when it was in contract negotiations with the DVD rental company, Redbox.


As the major Hollywood studios took sides for and against Redbox, Paramount Pictures was staying neutral. The studio had signed a first-of-its-kind trial deal guaranteeing that its titles will be available from the fast-growing $1-a-night DVD rental company through the end of the year. During that time, Paramount would study the effect of Redbox rentals on its total home-entertainment revenue, examining whether there is any decrease in the sales of its DVDs at stores that house Redbox kiosks. Under the terms of the agreement, Paramount would have the option at the end of the year to trigger a five-year deal with Redbox similar to ones recently struck with competitors Sony Pictures and Lionsgate. The estimated value of the agreement was $575 million. Redbox President Mitch Lowe agreed because Paramount movies performed better at the box office that year. A Paramount agreement would give the studio a share of rental revenue, meaning it could earn more than $575 million if its movies prove popular. Sony and Lionsgate are selling their discs wholesale to Redbox. Though it doesn't have a formal deal with the company, Walt Disney Studios allows its wholesalers to sell discs to Redbox as well. (Fritz, 2009) "There has been a lot of debate in the industry about the impact Redbox is having and will have, and we felt the best way to make a decision is by getting the information," said Paramount Vice Chairman Rob Moore. "Then we can make an informed decision based on what we will have learned over the next four months." Guaranteed access to Paramount’s movies was important for Redbox. The studio released two of that summer's biggest movies, "Transformers: Revenge of the Fallen" and "Star Trek."(Fritz, 2009) A movie that plays well in the theaters tends to do well when it is available to rent. Rental revenue could also provide a much-needed boost to the bottom line of Paramount. Lowe said he was confident that providing detailed data to Paramount would help resolve the heated disputes in Hollywood about his company's effect on the entertainment business. Lowe has previously said his company's research found that DVD sales dropped less than 1% in stores that installed a Redbox kiosk. "Many studios do their own analysis that we know is not as reliable and is aimed at coming to the answer they want to hear," he said. "We find that when we can form a relationship with a studio and share real data, it results in a positive step forward." Moore said he hadn't reached any "definitive conclusions" as to what steps he would take if the data showed that Redbox rentals do in fact reduce overall revenue. So, the dilemma that Paramount has is whether or not partnering with Redbox will reduce its sales income more than it will increase its rental revenue.

Paramount and Redbox did the research to determine whether or...
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