Redbox sues 20th Century Fox over DVD releases

DVD rental company Redbox Automated Retail has sued 20th Century Fox Home Entertainment over its attempts to keep newly released titles from appearing in the $1-a-night vending kiosks for 30 days.

The lawsuit, filed Tuesday in Delaware federal court, alleges that Fox is seeking to eliminate competition in the market for newly released DVDs. The civil suit accuses Fox of using its power to "unlawfully coerce" wholesalers, Video Products Distributors Inc. and Ingram Entertainment Inc., as well as other distributors, not to sell newly released DVDs to Redbox after Oct. 27.

The suit charges that such actions constitute an abuse of Fox's copyright and "naked restraint of trade."

“Redbox’s cornerstone principles include providing customers with a convenient way to rent new release DVDs at an affordable price,” said Redbox President Mitch Lowe in a statement. “At the expense of consumers, 20th Century Fox is attempting to prohibit timely consumer access to its new release DVDs at Redbox retail locations nationwide."

A spokesperson for Fox could not be reached for comment.

Battle lines over Redbox are being drawn throughout Hollywood, as the independent studio Lionsgate Entertainment joined Sony Pictures in agreeing to provide movies to the kiosk operator, which has a network of more than 17,000 refrigerator-sized vending machines in grocery and convenience stores and major retailers, such as Wal-Mart. 

Universal Studios Home Entertainment was the first to instruct wholesalers to stop selling newly released DVDs to Redbox, resulting in a similar suit filed last year. Warner Bros. has yet to make a decision, however, Jeff Bewkes, chief executive of corporate parent Time Warner, said Redbox should have a waiting period before getting access to the company's discs.

Update (11:45 AM): Fox issued the following response to the lawsuit:

Fox spent several weeks trying to negotiate a deal with Redbox that offered Redbox varying terms that gave Redbox the option of purchasing DVDs either on the initial DVD release date or with a 30 day window. Unfortunately, Fox and Redbox could not reach an agreement. Redbox has now filed a lawsuit challenging Fox's ability to make business decisions that Fox believes are in its best interest as well those of consumers.  This lawsuit aims to limit Fox's ability to make legitimate business decisions, and Fox believes it will prevail in defeating Redbox's meritless claims.

-- Dawn C. Chmielewski

Credit: Elaine Thompson / Associated Press

Comments

[Consumer]

Whoa! In the best interests of its consumers??? I'd love an explanation of how barring consumers from renting movies for $1/night upon release is in the consumer's best interest? Shameless.

[Rob]

Gotta side with Universal here.

They can decide where and whom sells their product.
Just like pepsi and coke can do the same, so can a movie studio.

[geri]

Good for Red Box! I hope you win. Did you ever try to take 3 kids to a movie? After you buy tickets and treats it costs you a minimum of $70. I couldn't afford to take my kids to the movies anymore. At least with Red Box they get to see the movie much earlier then waiting for it to come on TV. Hollywood makes enough money on consumers with their ridiculous salaries so what's wrong with throwing a few crumbs to the consumers. Good luck Red Box.