Redbox

I’ve become fascinated by the war going on between movie studios like Universal and Fox, Redbox and Netflix. The DVD is such an important part of the studio finance equation that these companies are jumping through all sorts of hoops to control how discs are disseminated to the public. Fortunately for us, those hoops are on fire, and the result is a little digital media circus played out before our very eyes.

One of the most entertaining stories of late is that Redbox has circumvented studio litigation by sending employees out to buy large quantities of DVD at retail. Fox and Universal won’t currently sell discs to the company, but Wal Mart will sell DVDs to anyone, including Redbox employees. But now Wal Mart and Target will only sell five discs to any one person during a specified window. And they’re going to enforce this…how?

So, the recap: Warner Bros. got Netflix to agree to a 28-day window of retail exclusivity for new DVD releases, during which Netflix won’t be able to rent discs to customers. If you want a new WB movie when it is first available, you’ve got to buy it. Other studios are expected to follow suit.

Variety reports that Wal Mart and Target have now set purchasing limits for new DVDs. Both retailers will limit purchases to five copies of any given movie within different time frames. Wal Mart is setting the limit for 28 days after release; Target for one week. Wal Mart has thrown out some boilerplate PR-speak (“From time to time, we have placed purchase limits on products at stores so that they can be accessible and available to as many customers as possible”) but does anyone buy it? Seems like an obvious roadblock for Redbox, which has been amusingly able to think out of bounds to keep kiosks stocked with DVDs.

So, uh…maybe a stupid question, but how exactly will this be enforced? Obviously the idea is to stop one Redbox employee going into a store and buying twenty copies of a new film, but what if one person went to several stores multiple days in a row? Are Wal Mart and Target going to set up a national DVD ownership database? Will there be black market sales for cases of DVDs behind big-box stores? I really hope so.

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