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Fox and Universal Pull Cheap DVD Rentals From Redbox

Posted on Wednesday, August 5th, 2009 by Peter Sciretta

Redbox

You’ve probably seen those DVD rental kiosks in your local Walmart, McDonald’s or supermarket. You might have even rented a movie for the very low price of $1 for one night from one of these machines. Easy quick and go rental seems like a very consumer friendly idea. So, of course, some of the major Hollywood studios are up in arms against it. Why are the studios so upset? The kiosks are apparently hurting their bottom line. The $1 rentals are supposedly hurting rental revenue and resales of used Redbox discs are hurting dvd sales.

Universal was the first to strike, ordering their wholesalers to stop supplying dvd titles to Redbox within 45 days of release. Redbox fired back with a lawsuit in October. Universal counter-sued, and a decision is expected any day from a federal judge. And now 20th Century Fox is joining the war against Redbox, ordering wholesalers to stop supplying discs to DVD rental kiosks within the first 30 days of release.

If the court ruling goes against Redbox, other studios are expected to follow. Has Hollywood not learned anything from the music industry? When Industry greed prevents consumers to access and pay for media in easier ways, and piracy becomes easier than legal purchase/rental, consumers will choose the latter. Fox issued the following statement to THR, which further proves my theory above:

We invest enormous money, creativity and effort to make entertaining, high-quality Fox movies available throughout the world…In the home entertainment business, Fox offers our movies through bricks-and-mortar retail outlets and online retailers, including both national and regional chains and small mom-and-pop stores, offering consumers a wide selection of new releases and catalog for both rental and purchase. … Our desire is to maintain for Fox movies a thriving network of distribution serving all types of consumer preferences, on reasonable business terms for Fox as well as our distribution partners.

On the other hand, Sony recently struck a deal with Redbox which would provide the kiosks with product directly in exchange for promising not to resell the used DVDs.

Comments

Landon Fletcher

So I guess it's back to downloading movies for FREE (illegally) and the studios will make even less. You really would think that they would learn from the music industry!

greycolumbus

I have to comment just because my mother loves the hell out of these boxes.

The whole concept seems sound but its not for me. I tend to hoard whatever I rent or borrow. I guess the boxes are working for a lot of people.

Anyway, sucks for them. I find it amusing that Fox sued only after Universal.

Max Ketchum

pirating is easy and free

freemachine

DAMN!!! I'm really gonna miss those quality Fox movies.

jrice73

I just got into redbox rentals about five months ago and I don't really rent that many. But that is totally stupid! Hell, Fox hasn't made a film in a long time I've rented though. Yeah, this gives more fodder for people who pirate. The movie studios are continually going backwards when it comes to selling/distributing their product, just like the RIAA. Idiots...

biscocholondo

I work for a "mom and pop" video store and we are feeling the effects of the Red Box. Because we have to cover things like, employees, utilities, and rent, we cant afford to rent out new releases for $1.00. People are going to Red Box and leaving us behind. I hope the studios do win because if we go under, where are people going to get the classics and hard to find movies? Oh wait. DAMN YOU TOO NETFLIX!!!! Serioulsy, Mom and Pops are dissapearing and who wants to choose between Hollywood and Blockbuster? Support your local mom and pop video store.

quintushalls

Sorry! Double Post, database connection error.

quintushalls

I'm sorry, but you need to adapt and innovate too. You need to offer a niche that sets you apart from the 'Red Box'. You need to provide extra services, special screenings, or something like movie-night packages that come with popcorn and stuff. If you expect people to pay 500% more, then you have to put all those costs for employees, utilities, and the like, to good use!

kip_mooney

Ridiculous. I thought movies were entertainment products.

tysonatthemovies

Greedy corporate ass holes can suck it!

John Rowe

"Sir! Redbox to the starboard!"

"Quick, Ensign! COUNTER-SUE!!!"

Bill N.

Breaking news, the music/movie industry hates its customers.

spindle789

that sucks, because I use these all the time. It's not like if they win I'll buy the movie instead, so it's a lose lose.

Travis Tidmore

This is ridiculous. I'm sorry that I don't want to spend $5 at Blockbuster for a video rental when I can get it for $1 at a redbox. And how come Redbox can't sell used DVDs but Blockbuster can?
I call Shenanigans!

cltmikey

Next person to say shenanigans gets pistol whipped...

Stark

I think that they are trying to cut down on the amount of used DVD's Blockbuster sales too. I think the idea is that a new DVD is 20 bucks and you can get 5 used one on a good sale day for the same price. These days DVD and Blu-Ray sales make almost as much as most domestic realizes. So to the studios, protecting DVD sales is as important as making sure a movie does not leak or bomb.

shenanigans....

Charles D

How funny, I've refused the rent from blockbastard for about 6 years now....Redbox was great cause netflix screws you over too if you rent too many movies(magically the more you rent from netflix the slower shipping time becomes, i went from a 48hr turnaround to 72 to 4 business days). I won't rent at all anymore

ocentertainment

Bad move. It's one thing to preemptively strike at online streaming or other distribution methods that have yet to gain much popularity in the mainstream. Mostly only movie geeks and computer nerds have their television set up to stream Hulu/Netflix. For most people, it's a chore.

These RedBoxes, though? They're in McDonald's, they're in Wal-Marts. They've gotten exposure to the least of the savvy users. And the folks who are gonna spend the most money on movies, the grunt-level employees who really shouldn't, but they have sucky lives, so why not? They're the ones you're gonna tick off if you take anymore options away from them.

It sounds like they're just giving them a limited run time in the Box, rather than just pulling them altogether, which is fine....ish. But don't go screwing up a good thing with greed.

The fact is distribution is getting way cheaper. Consumers expect their costs to go down. Yep, that means you don't have as much room for markup. Sorry. But it's either adapt or die. Your choice.

Ghost

Hey Peter, off topic but speaking of studios doing idiotic things I thought you'd like to hear from a projectionist that GI Joe is without a doubt the most heavily guarded print I've ever come across. I'm sure you know how all the big summer prints come in locked cans now, codes emailed to theatres the night before release day. Recently projectionists gather on IMDB, figure it out early & rejoice at seeing the film 12 hours early. All locked prints used to have the same 4 digit code nation wide. But now GI Joe has at the very least five different codes, along with a memo that Paramount is in fact, sending people out to check that the cans remain unopened. I realize and repect their rights but.... overkill much? Forget the fanboys. The studio doesnt even want this film out.

RainMan

Can they give the discs away to veterans or something? To compensate for the fact that people won't be able to Redbox "Couple's Retreat" the day it comes out?

Perry Ryan

“We invest enormous money, creativity and effort to make entertaining, high-quality Fox movies"

LMFAO
ROFL
LOLOLOLOLOL

AHAHAHAHAHAHA god that is gold.

Stark

I thought the same thing as i read it. Literally the creative, high-quality film that was Wolverine jumped into my head....

Perry Ryan

Agreed with all statements, William and Stark.

The future looks bright, creative, entertaining, and high-quality for Fox, what with the impending release of Alvin and the Chipmunks: The Squeakuel.

William_Wright

you took the words right out of my mouth.
now if that was a searchlight press release it would be different lol.

ndrage85

Are you there, God? It's me, ndrage85. Why are stupid people in charge of so many things in this world?

markthesewords

netflix used to sell their movies too, what happend to that? They get sued or threatened too?

plannine42

They did the same thing to Blockbuster stores because they refused to stop selling there old rentals so they wouldn't will orders for stores in hopes that customers would give up on Blockbuster because they never have the movies they want. Convenience for customers isn't profitable for the studios so they don't care about it.

dagreenman18

Well, i feel very conflicted about this. On the one hand, it's shitty for them to be doing this to the consumer. On the other, i work at a video store (not Blockbuster. Please put down the bricks) , so yeah, Redbox does kinda hurt me. At least with Netflix, when there is a big movie that Netflix runs out of copies of, they go to the video store.

quintushalls

At a video store, you offer a service, not just videos, and that is what you are really selling...or at least, you should be. When someone comes in to the store not knowing what to see, they should be able to tell you their situation or mood, and you can recommend the right movie for that, probably better than most sites' recommend-applications. So, probably for the next 5 years, you are still relevant! After that...I can't be certain.

ocentertainment

*puts down brick, calls off hounds, turns off laser, cancels assassin, makes a sandwich*

Where'd you say you work again?

Travis Prange

This is just asinine. As stated before, has the MPAA learned nothing from the RIAA? If anything, giving the consumer the MOST options is the best thing to do, and good PR. Period.

Greg

Well, great. Looks like I'm back to not renting $4.99+tax videos from Blockbuster again. Thank you, bittorrent!

urkel

This is the big misconception of the music/movie industry. If a person downloads or even rents a movie at a low price then it is taking away from actual dvd sales. But in reality then RedBox has allowed me to watch dozens of movies I would never watch for "full price", and many times had me interested enough to go out and buy the DVD.

Take away the cheap rentals from someone like me then I'll just ignore the movies I have little interest in and probably will end up buying less DVD's because of it. Good move.

eddymovies

Stop bitching. "I tried becoming a good citizen". You know, I hate people who complain about the recession, bad economy, overpriced products, etc. and then go home and download movies or music. You are the reason why all that's happening. People are trying to find a way to deal with you in order to get by.

There's no argument behind pirating. It's stealing, through and through. I mean there's Netflix, which is the cheapest method of watching movies. With them, there's seriously no excuse to download movies.

Konrad

Sir, if you think pirating is in any way related to our economic issues I invite you to please go back to middle school.

The disgustingly greedy practices of the MPAA and RIAA are responsible for something like 99% of the piracy that goes on. They take over half of the money you spend on every single DVD and CD and tape and record and give pittances to the people who are responsible for the creative processes, the people who are the entire reason why you are buying that media.

You want to blame someone? Blame the people who take a 90 year grandmother who doesn't own a computer and say she stole 10 songs. Not 10 albums, 10 SONGS. The amount she's sued for? Oh probably a cool $1,000,000. You know, something like 70,000x the amount a CD with 10 songs would cost.

That sounds reasonable, doesn't it?

And yes, this is an argument behind pirating. Give me something worth my money and give the artist more than $.05 when I spend $20 on a CD and I'll buy it.

GOOD DAY, sir.

eddymovies

You're talking albums, we're talking movies. But still, boo hoo hoo. The world is corrupt. Way to make it a better place by stealing music and movies.

And how does the MPAA screw over artists? Everybody signs a contract up front. Where do you get the idea that they take a chunk of that?

"Give me something worth my money", if you download a song or a movie, you're showing interest in their product. You wanted to see the end result. So, it's "worth your money" in that regard.

For somebody who promotes going back to middle school, you may be someone who would benefit from that.

ben

Um. He was pretty much talking about Redbox in his post.

And pirating movies and CDs is the reason why the economy is bad?? That's really what you are blaming this all on?

eddymovies

I commented on someone else's post, but it seems to have been deleted.

And no, pirating is not the (sole) reason behind the falling economy - people don't want to pay their dues. A lot of people think they deserve to have things for free. Asking people at work, here's the main reason I hear for justifying piracy:

"They make too much money, they don't deserve it, then they ask $10 from me? No way."

This is coming from the same crowd who tries to burn Obama's house because they swear the man is sweeping the world with socialism/communism. The funny thing is, people refuse to pay the price for a movie ticket, and as piracy increases, so do the ticket prices. That leaves honest customers like you and me to pay the bill.

quintushalls

Wow, you are misinformed. I hope you don't believe clean coal is clean.

This chart should really clear things up for you:
Music Sales over time http://imgur.com/tRKAu.gif
DVD Sales/Rentals over time http://imgur.com/VAO76.jpg

Is Piracy illegal? Yes. Is it morally wrong? Yes.
Is it hurting your ticket price or the economy? No.

eddymovies

In both charts, the latest year shown has a decline from the rest. The album chart has three years absent, when piracy has gotten larger and larger.

Read any box office analysis for any week, month, or year. $ numbers are always up, but attendance is always down.

john

censorship ftw!

Itri12

Yeah, god forbid the studios actually care about the consumers. I agree with what you said above Peter: the movie industry is going to be in some serious trouble like the music industry if they keep doing shit like this. Human greed prevents people from ever learning.

john

lol high quality .. yeah right! .... megan fox's ass is made of higher quality plastic than that!

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