Mark Talmadge
Senior HTF Member
- Joined
- Jul 21, 2005
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I don't know if anyone has been following this but Redbox is embroiled in a lawsuit that it has filed against movie studios over its $1 DVD rental kiosks that have been seen in retails such as Walmarts:
There's a major battle being waged in the courts over Redbox, which operates DVD Rental Kiosks at national retailers throughout North America. The complaint stems from the fact that Universal and 20th Century Fox have ordered their distributors to stop selling their DVD's to Redbox.
Redbox fired back and filed separate lawsuits against Universal Home Video and Fox Home Video for refusing to sell them DVD's for their kiosks. IN their lawsuit, they claim that Universal and Fox are in violation of the Sherman Antitrust Act which prevent companies from maintaining a monopoly in an area of the market (there's more to Sherman Act, check out Wikipedia for details).
The problem is that Redfox is using a broad interpretation of the act by stating that they are entitled to the "Fair Use" provision of copyright law that allows Redbox to use the DVD's as they see fit. Redbox has stated that if they are forced to, they will purchase DVD's from the retail market. However, Redbox may be in violation with copyright laws because each DVD comes with an FBI warning that informs the consumer about piracy laws, copyright laws and what the consumer can use that DVD for.
Video rental stores such as Blockbuster, Family Video, Hollywood Video and many others sign agreements with movie studios where the video rental stores share revenue with the movie studios for each movie that is rented out. Redbox claims that they will not share any revenue with these studios and they also claim that movie studios are sticking consumers for higher rpices on video rentals. However, movie studios argue that Redbox is undercutting the video rental stores as well as retail stores because who would want to buy a DVD for $10 or $15 when you can rent one for $1. Redbox seeks to disrupt the DVD market by undercutting traditional rental stores and retailers and this could cause movie studios millions upon millions of dollars in lost revenue.
Many think that Universal will prevail because wheat Redbox is attempting to pull is basically price fixing by undercutting the retail industry which is against Federal law. There are protections in place for consumers that prevent retails for offering certain merchandise far below fair market value and the concern is that Redbox is threatening that business model.
Hopefully, Universal will prevail because if they don't, then, the retail DVD market and video rental stores will be doomed and millions of dollars in lost revenue will threaten the home video industry. What I think is strange is that Sony hasn't allied themselves with these movie studios because this would also affect blu ray sales, handing the High Def format a major defeat.
Many websites are reporting on this but I first heard about this issue over at Techdirt.com
There's a major battle being waged in the courts over Redbox, which operates DVD Rental Kiosks at national retailers throughout North America. The complaint stems from the fact that Universal and 20th Century Fox have ordered their distributors to stop selling their DVD's to Redbox.
Redbox fired back and filed separate lawsuits against Universal Home Video and Fox Home Video for refusing to sell them DVD's for their kiosks. IN their lawsuit, they claim that Universal and Fox are in violation of the Sherman Antitrust Act which prevent companies from maintaining a monopoly in an area of the market (there's more to Sherman Act, check out Wikipedia for details).
The problem is that Redfox is using a broad interpretation of the act by stating that they are entitled to the "Fair Use" provision of copyright law that allows Redbox to use the DVD's as they see fit. Redbox has stated that if they are forced to, they will purchase DVD's from the retail market. However, Redbox may be in violation with copyright laws because each DVD comes with an FBI warning that informs the consumer about piracy laws, copyright laws and what the consumer can use that DVD for.
Video rental stores such as Blockbuster, Family Video, Hollywood Video and many others sign agreements with movie studios where the video rental stores share revenue with the movie studios for each movie that is rented out. Redbox claims that they will not share any revenue with these studios and they also claim that movie studios are sticking consumers for higher rpices on video rentals. However, movie studios argue that Redbox is undercutting the video rental stores as well as retail stores because who would want to buy a DVD for $10 or $15 when you can rent one for $1. Redbox seeks to disrupt the DVD market by undercutting traditional rental stores and retailers and this could cause movie studios millions upon millions of dollars in lost revenue.
Many think that Universal will prevail because wheat Redbox is attempting to pull is basically price fixing by undercutting the retail industry which is against Federal law. There are protections in place for consumers that prevent retails for offering certain merchandise far below fair market value and the concern is that Redbox is threatening that business model.
Hopefully, Universal will prevail because if they don't, then, the retail DVD market and video rental stores will be doomed and millions of dollars in lost revenue will threaten the home video industry. What I think is strange is that Sony hasn't allied themselves with these movie studios because this would also affect blu ray sales, handing the High Def format a major defeat.
Many websites are reporting on this but I first heard about this issue over at Techdirt.com