(AP Photo/Damian Dovarganes)

By Julie Wernau | Redbox ended its fight with Hollywood Thursday, announcing it had struck deals with Twentieth Century Fox and Universal Studios Home Entertainment that will allow $1 per night video rentals and multi-million dollar movie budgets to coexist. As part of the agreements, Redbox agreed to wait 28 days after the movies are released to DVD before placing the discs in their rental kiosks.

Redbox has been embroiled in legal battles with the studios since October 2008, when it filed its first suit against Universal Studios Home Entertainment.

As part of the Universal Deal, Redbox said it received a better discount
on DVDs and in enough quantity to ensure that customers will be more
likely to find the movies they are looking for when visiting a Redbox.
The deal also extends Redbox’s access to Blu-ray titles, which are being
tested in certain markets.  The first release covered under the new
agreement is “It’s Complicated,” which Universal will directly supply to
Redbox 28 days after the film’s April 27 street date. The deal between
Redbox and Twentieth Century Fox is similar, and the first release
covered under that agreement will be for “Avatar.” Redbox also agreed to
destroy DVDs and Blu-ray discs rather than reselling them at the end of
their lifespan in the rental kiosks.

Because of the legal battles, Redbox had been using a workaround model
to stock kiosks with movies from certain studio, dispatching employees
armed with corporate credit cards to buy new DVDs at big box stores the
day they hit shelves. The move circumvented a long-standing distribution
hierarchy in the DVD-rental business that Hollywood studios said
threatened the industry’s revenue by making rentals available during a
time when consumer would otherwise only be able to purchase a DVD at
full-price.

Redbox and Warner Bros. Home Entertainment Group, which Redbox sued in
August 2009 over distribution terms it deemed unfair, struck a similar
deal that ended their legal battles this February.