Blog Post

Redbox v. Universal Will Move Forward

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

RedboxLogoThough two of its three claims were dismissed by a U.S. District Court judge yesterday, Redbox’s lawsuit against Universal Studios Home Entertainment (s GE) will proceed. In his opinion, Judge Robert Kugler wrote:

“The court is convinced that plantiff [sic] sufficiently pleaded that Universal has induced or otherwise convinced others to boycott Redbox in distribution of Universal DVDs, producing anti-competitive effects, specifically Redbox’s inability to compete in the DVD rental and sales markets of Universal DVDs.”

Redbox brought the lawsuit against Universal last October over the studio’s attempt to prevent the kiosk DVD rental company from obtaining and renting out new release titles. At issue for Universal is the value of home entertainment, as it objects to Redbox’s $1-per-night-rental policy. Hollywood is taking sides, with 20th Century Fox (s NWS) and Warner Home Entertainment (s TWX) each creating their own release windows that prohibit Redbox from obtaining certain titles for a month after their release. Meanwhile, both Sony (s sne) and Lions Gate (s lgf) have signed distribution deals with the company.

Both Redbox and Universal claimed victory following the court’s decision yesterday, issuing dueling statements. But it’s likely a bigger relief for Redbox, which has a similar lawsuit pending against Fox and most likely a third one against Warner on the way. Of course, we’ve only just begun, as the actual Universal suit now must be heard.

Claims the judge threw out yesterday included misuse of copyright and contract interference between Redbox and its DVD wholesalers.

7 Responses to “Redbox v. Universal Will Move Forward”

  1. Maybe all of the Redbox users should create a class action suit against the movie studios for not allowing us to view their movies. Since I started using Redbox I have purchased more movies for my personal collection and have a long list of BR movies I want to buy once they are available. Movie studios go out of their way to create great trailers to entice you to buy their product. How many times have you watched a trailer that is better than the actual movie. I applaud Redbox for offering movies for $1. This gives the movie more publicity and if the movie is worth a damn a lot of people will purchase the movie for their collection thus increasing revenue for the studios. Oh, and about those trailers, when I buy or rent a movie I have to watch more trailers. Renting from Redbox is like giving free advertisement to the movie studios. I doubt the studios will ever find a more cost effective avenue of advertising their product to the masses. That said, when I purchase movies for my collection I don’t appreciate having to watch trailers for other movies. If I am paying for a movie I should not have to pay for trailers! I can watch trailers on the internet for free so why am I forced to watch them before the movie I purchased. It seems like some movie studios want their cake and eat it too as long as it pads their pockets.

  2. mullingitover

    leeuniverse: let me introduce you to something called ‘right of first sale.’

    This means that if you buy a book, or a CD, or a DVD, you own it. As owner, you are free to sell on craigslist, loan it to your friend, or rent it out.

    Redbox has the same right of first sale that you have. They are not making illegal copies of the movies, which is what copyright law covers. They have a legal right to do with their property as they please. They buy the movies at retail just like you do. They could actually sue you for libel for writing that they are somehow stealing or otherwise profiting from an illegal enterprise, because you are damaging their reputation by implying this. But that’s beside the point: they are 100% legit in their business. The studios are 100% in the wrong, and Redbox should take them to the cleaners for the monopolistic, anticompetitive tactics they’re taking.

    • the doctrine of first sale is about the permanent transfer of ownership. what Redbox is doing it not buying and reselling. they get the disks back (without a refund of the fees). which is NOT covered by First Sale.

  3. What?

    so by what you are saying is that redbox is doing the same thing and pirates?

    if so, then BLOCKBUSTER is doing the same thing

    first off they buy the dvd at a higher cost than you and I. the movie studios are making enough money off of the rental business.

  4. leeuniverse

    While I love Rebox, I’m actually surprised they didn’t have a revenue sharing agreement from the get go. I mean, all dvd’s at the very beginning of the video all say you can’t be doing what they are doing. I mean, couldn’t they set up that they like give back 5% of all rentals or something? I’m sure there is a # they can afford. I don’t see how what redbox is doing is any different from software/movie pirates, which we all know is wrong. Though in that I think it’s the software/movie makers fault such exists because they won’t offer their titles at a more affordable rate in the country’s that they must. After all, if the pirates can do it, why can’t they???

    Sadly, it’s likely going to be us consumers that loose in this. I hope Redbox wins, but I think they should also do the right thing and share the earnings, because it is after all not their intellectual property.

    Understand, I share warez, so I’m all for free sharing, but Redbox is a commercial enterprise, they should be giving something to those who’s work such belongs too because Redbox is profiting from it.

    What they should start doing is find a percent that they can afford to give back, and just start sending the money to those who have the movie rights. Then they are protected, and they can show that they are acting in good faith, and they and us will definitely win in the end. I worry though that Redbox greed will ruin it for everyone. Anyway…. :)