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


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


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

Comments () | Archives (5)

Renting a current movie while on a grocery shopping trip makes a lot of sense. How many people will return that movie the very next day, so will end up paying more than just $1 to watch it ? --- Very clever marketing, and of course the movie moguls hate anything other than pay-per-view at a local theater, with bad parking, smelly bathrooms and overpriced popcorn. --- Now that most everyone can have their own screening room at home, why fight it ? All of the big boys have a 35mm projector in a home studio, why not the rest of us ?

If people are so cheap that they will only rent a DVD for $1, then they aren't worth catering to. Without any noticeable income for the studios, distributors, delivery people, and all the B&M stores and rental chains, hey why even have market DVD's. Heck you will just have to watch movies as downloads for $$$, or watch pay for view via cable or satellite as the studios are not going to waste their time catering to people who are only willing to pay $1 for a DVD rental.

If it weren't for RedBox I would torrent a lot more movies.

A lot of these movie studios are assuming that people will purchase a brand new DVD before watching or renting the movie. If I haven't seen a movie in theaters, I typically rent it before I consider buying it. There were a couple times where I've paid $1 to Redbox and a few days later another $20 to purchase the DVD. For years I think Blockbuster (the Wal-Mart of movie renting) has been way too pricey and are just now catching up to other movie rental places. Kudos to Sony and Lions Gate for working with Redbox and not against them.

I think RedBox is doing all the right things. I wish I knew when they were going public. Looks to me they will be a very good investment.


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