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