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Redbox takes its case to public as it stays alive in court

August 18, 2009 | 11:35 am

SaveDVDs

The battle over $1 DVD rentals is staying alive in the courtroom -- and heating up in the court of public opinion.

In Delaware, U.S. District Judge Robert Kugler on Monday dismissed two of the three claims that fast-growing DVD kiosk company Redbox is making in its ongoing lawsuit against Universal Studios, but he declined to dismiss an antitrust claim.

The decision means that Redbox can continue in its effort to get a legal decision blocking Universal instructing its wholesale distributors to not give Redbox the studio's discs until 45 days after they are released. Redbox has filed a similar suit against 20th Century Fox, which recently imposed a 30-day window on its distributors, and the kiosk company is expected to do the same to Warner Bros. after that studio told distributors to wait 28 days.

This battle, however, is not confined to legal proceedings. Redbox has recently taken its case to the public, launching a website titled "Save Low Cost DVDs" with the headline "Don't let a few movie studios prevent you from seeing the latest DVDs for an affordable price." It features links to several news stories and television interviews about Redbox's battles and agreements with Hollywood studios, as well as a "Save Low Cost DVDs" Twitter account, which currently has only 26 followers.

The studios are worried that the $1-per-night DVD rentals are undercutting more lucrative rentals from other sources, as well as sales. Sony Pictures and Lions Gate Entertainment, meanwhile, have concluded that it's better to work with Redbox, and both have cut five-year deals with the company.

In his decision, Kugler said Redbox's claims of copyright misuse and tortuous interference against Universal were not legally valid, and he granted the studio's motion to dismiss them. But he ruled that Redbox may have a case on antitrust grounds -- that Universal may be engaging in illegal behavior that prevents the kiosk company from competing in the home-entertainment market.

Both sides tried to claim victory in public statements, though the real measure will come when the case goes to trial.

-- Ben Fritz

Related:

Blockbuster revenue plummets 22%, shares fall 16%

Redbox CEO: We have a negligible effect on DVD sales

Redbox sues 20th Century Fox over DVD releases

Lions Gate plays nice with Redbox for $158 million

Fox to Redbox: Hands off our movies for 30 days

Redbox revenue more than doubles, testing new pricing models

Hollywood hoping Redbox will be the DVD version of $1 movie theaters

Netflix revenue up 20% as rentals boom in the recession

Photo: Redbox's "Save Low Cost DVDs" website. Credit: Redbox.

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