As expected, Redbox is suing Warner Home Video over its demand for a 28-day window before it makes available low-cost DVDs to the kiosks. But what really warms my heart is the way Redbox President Mitch Lowe is using not just anti-trust law but also a PR offensive to fight back against the power, influence, and unlimited resources of the Hollywood studios and the cartel they’ve formed. (Hey, Hollywood guilds, you could learn a thing or two from these Redbox guys…) Redbox has now set up savelowcostdvds.com to explain its populist message aimed at the 150 million consumers who shop where the Redbox kiosks are located, “Don’t Let a few movie studios prevent you from seeing the latest DVDs at an affordable price”.
Here’s the latest Redbox lawsuit:
Oakbrook Terrace, Ill. – Redbox Automated Retail, LLC, filed suit in Delaware Federal Court against Warner Home Video on Tuesday, August 18, 2009, to protect consumers’ rights to access new release DVDs. Redbox filed the action in response to new distribution terms imposed by Warner Home Video that would prohibit redbox from providing consumers access to Warner Home Video titles until at least 28 days after public release.
“Warner Home Video’s actions come at the expense of consumers,” said Mitch Lowe, president, redbox. “Redbox remains committed to providing our customers the new release DVDs they want, where they want and at the low price they want. Standing behind our commitment, redbox will continue to offer our consumers access to all major new releases including Warner Home Video at our more than 15,000 locations nationwide.”
A number of studios also have shown support for redbox. Last week, redbox signed a multi-year distribution agreement with Lionsgate. A similar distribution agreement with Sony Pictures Home Entertainment (SPHE) was reached in July. “Redbox continues to forge winning relationships with a number of studios that increase studio exposure, ensure redbox customers receive access to more titles and support redbox’s commitment to providing consumers timely, convenient and affordable access to new release DVDs,” said Lowe.
Since when do consumers have the “right” to low-cost DVDs? What is this, Social Security? Seriously. Movies/DVDs are a business and studios can utilize market forces to determine when and how much to charge for DVDs. Consumers have the right to buy or not buy. If they charge too much, they’ll lose business. The market will determine the best price.
Not to mention the fact that Redbox puts real human beings out of work. Blockbuster’s recent closings put around 7000 people out of work, with more to come from other large chains. What are you going to do when machines steal your job, or your husband’s job, or your parents’ jobs? Redbox is just another corporation who is out to make a fast buck. Don’t be a fool! Spend your money at the businesses who employ human beings and help put food on some kid’s table tonight! Isn’t it time we start protecting ourselves and our jobs from greedy corporations like Redbox. No machine is stealing someone’s job on my watch. I spend my money at real brick and mortar stores and interact with real breathing human beings. Want to have some fun with Redbox? Grab a prepaid VISA, rent all the movies you want, then don’t return them! If you want to preserve our economy and keep real people working, rent from real human beings!
You make it sound like no human beings work for redbox. I’ve met some people who work on their machines and they seem like hard working people who are greatful to have jobs too! Remember, this is about the studios who make tons of money making mostly weak product for the consumer because they can get away with it. Why pay more for lousy product at a higher rate? This is not about putting people out of work. It’s about greedy hollywood getting greedier!!
Yes, places like Blockbuster are closing up shop but their arrogance kept them from changing with the times and technology.They should apologize to their employees for not changing the way they do business.
when are we going to get to a point where the “put real people out of work” argument goes away? Computers, innovation, technology and advancement are he to stay… fighting them is useless. The market and everyone else (studios, blockbuster, hollywood) need to change their business model and adapt right along with market advancements. Who’s making those DVD kiosks… people. Who runs RedBox… people? Who services the machine… people? Progress shouldn’t stop just so johnny the high-schooler has a part time job at the local video store… that’s just absurd. the industry needs to adapt to these changes.
When a corporation refuses to sell products to another corporation in an attempt to fix prices (i.e. $5 blockbuster rentals in this case) they are playing with fire. In the 1990s the music industry tried this by telling music stores they has to sell CDs to consumers at specified prices or the labels would not sell any product to the record stores at wholesale prices. In New York (and other states) the attorney general sued RIAA and won costing them about $100M.
Yeah they’re doing a great job at bringing low cost rentals to the masses, but lowering the revenue from DVD rentals is going to eventually lower the budgets on the films. Might as well sue the studios to lower the cost of movie tickets or force the studios to release the titles on free network TV at the same time they’re released in theaters. Frankly, I prefer FX-laden big budget movies and comic book adaptations over contemporary low budget indies and froo-froo romcoms. Harry Potter was better than The Ugly Truth, and it cost 8 times as much to make. Never thought I’d say this, but I hope the studio cartel wins on this one. Save the big budget schlockfest!
Redbox is a part of Coinstar (NASDAQ: CSTR) and is responsible for Coinstar’s recent growth.
http://www.bloggingstocks.com/2009/08/05/coinstar-red-hot-with-redbox/
Actually…these studios should thank their lucky stars for Redbox. “Paying” for media is an outdated concept…even my elderly mother understands how torrents work. Instead of fussing around with their computers and wasting time/bandwith trying to download a decent copy,some folks MIGHT be willing to pay a buck and get the DVD from Redbox instead…not me though!
Yeah, what a winner! Now nobody makes any money. It’s no wonder our economy is tanking with all you thieves on the loose, stealing anything you want and patting yourself on the back for figuring out how a torrent works. “Huh huh huh, me smart. Me steal movie off internet.” How about supporting the economy by working, paying for your entertainment, and quit stealing things, lowlife? Any idiot can steal. A smart person understands that pirating has a negative effect on the local economy as well as the talented people who work very hard to produce this entertainment. Moron.
Give the studios a gun and every time they’ll shoot themselves in the foot. The real problem with film these days isn’t cheap DVDs. That’s the problem on the horizon. The problem for today is expensive, crappy movies in the theaters where studios agressively squeeze out competition and continue to alienate everyone over the age of 22.
Seriously?
If RedBox is denied the right to do their own pricing and it is dictated solely by the studios. I think the general public will either be a) reacquaint themselves with BitTorrents or b) become acquainted with BitTorrents.
Seriously?
If RedBox wants to take the early hit on studio retail pricing and make-up on volume that is their prerogative. Just because the distribution is not digital doesn’t mean the studios are not facing a Napster highwater mark as the music industry.
Seriously!
The quality and volume of the film industry is terrible. Television has taken the innovative lead. Personally, I rather spend time playing video games with the kids then “zone out” and watch recycled trash…either on the big or small screen.
StudioShill–
Great point! The market determines the price! Go get ’em!
What you fail to realize, possibly because your price-gouging hat is a little too tight, is that Redbox is moving to undermine your greed by influencing market price through a PR campaign.
Luckily your way of thinking– F the consumer– supports THEIR cause. If you were to step out from behind your Daffy Duck University Degree in the “Mine, Mine, all Mine Department” you might figure out one can make a profit without gouging and alienating what will soon be former buyers.
But the best point is made by Ms. Finke. “Hey, Hollywood guilds, you could learn a thing or two from these Redbox guys…”
True that.
Everybody wants to be RIGHT in Hollywood, but no one, including the guilds, can figure out or even cares what the consumer thinks, what the buyer thinks, what the public thinks. And it’s that arrogance that will collapse all the guilds and studios if we all don’t wake up.
In short, it’s not about us, it’s about them.
In general, I agree that the studios are evil. But why is it that they should be forced to sell their product at such a bargain price? Since when was the $3 or $4 other rental places such an exorbitant price to pay?
I support Redbox because I believe the idea of kiosks everywhere is a good idea. But their prices are unsustainable.
Why should studios be forced to cut their own throats?
Gee, if redbox pays the same as all other businesses to distribute product to consumers, what are the studios losing? They still make the sale of their movies. Maybe Walmart, Target and other retailers should be told that they can’t buy from the studios as well. It makes no sense!!
They aren’t being sold to redbox for $1.00. If redbox can make a profit by renting a dvd for $1.00 a day, more power to them and to the consumer!!
Remember, it’s the studios who are the bad guy here. They are the ones violating anti-trust law.
“Frankly, I prefer FX-laden big budget movies and comic book adaptations over contemporary low budget indies and froo-froo romcoms. ”
Yeah, okay, “Jared”.
I don’t understand the vitriol against the studios for setting prices that will sustain their company, fat and bloated as they might be. Clearly making a killing in profit isn’t illegal in this country.
The anti trust laws that prevent studios from owing theaters are outdated. Virtually every other business that sells a product, from pharmaceuticals to crest toothpaste is allowed to dictate the cost of the product to the retailer. I think the best solution is to allow the studios full control of their ticket and dvd sale/ rental prices. That’s true free market economics. Then they can chose to charge 20$ to see GI JOE and 5$ to see THE COVE. Same goes for the price of DVDs. If a product is in higher demand, they should charge more, and if they charge too much, then they’ll flop.
the idea that theaters owned by studios will close out films owned by other studios is out dated. Look at the quid pro quo in television – HOUSE being a stand-out example. A universal theater hosting a fox film will probably charge more than a fox theater to see it. People can choose to make the extra drive or not.
Same applies to DVD rentals. Let the studios set up their own red-boxes, side by side! Quit handing out their product to Netflix and Redbox. Then when they charge 10$ a rental, and no one rents, they’ll lower the price and find a more workable cost.
I’m not a fan of the studios by any means. But they still support hundreds of thousands of jobs – from the PA who just moved to LA to the PR guy in Bangladesh. Companies like redbox seem to undermine those jobs. As to the whiney shit-heads who want to pay less for a DVD rental than the cost of a theater ticket in 1960. It’s absurd that those of you who want to pay rock bottom prices dare to call the purveyors of the product greedy.
Lower cost DVD rentals have nothing to do with Hollywood budgets. Video sales and rentals were going to destroy Hollywood because no one would go to movies, they’d just wait for it to come out on video. Instead it did just the opposite. Cheaper rentals appeal to people who might not otherwise rent and or buy but think a $1 a night is worth. If you pay $8.99 a month for unlimited rentals through NetFlix then how can a lower priced daily rental affect budgets. It won’t. If Warner videos is attempting to fix prices then I applaud RedBox for standing up for it’s customers.
Forget DVDs. That studio cartel should eliminate the delay in time for digital downloads. When they do, the DVD will become extinct.
No it won’t. Some people realize there is a difference between buying a physical object and paying to watch a licensed digital version of it. If I buy a video game or DVD, I have something of value. I can trade it to someone, resell it, it has value. Digital downloads have no value. You are paying something for nothing. The PSX version of Final Fantasy 7 sitting on my shelf is worth $50. My DVD of Streets of Laredo has a value of $40 if I needed to sell it on Amazon.com. If you lost your job and needed $20 for gas money, you can’t take your digital library to the pawn shop and sell them. LOL! The only thing becoming extinct is IQs in our country.
The studios are going to run their own internet delivery system. Soon. And it will probably stink for consumers.
Even if it is a stupid idea Warner can do what they want with their product. Redbox can also put together a PR blitz to make Warner look bad. That is all free market, but the lawsuit is stupid.
this is a losing battle for the studios
you can’t dictate set price/availability like that
free markets aren’t fun when the sharp end is pointing at you
Duh. Yes, you can. How would you like it if I came in your house and said, “Sell me that TV for $20?” The studios have every right to set a price for the product they sell. Since when did $4 become to pricey for everyone to pay for a movie rental? You all need to find better jobs… oh wait, I forgot. Everyone is losing their jobs to machines, like Redbox. Hmm, makes you wonder…
Why are there people so worried about the movie industry on here? Do you work for one? Fearing people that if we somehow lower DVD rental fee’s, will relate to poor quality movies is ridiculous… just like banks too big to fail is a joke… poor movie studios won’t be able to make movies for $200 million? Cry me a river.
The studio’s are just doing their best to keep profit margins up (their job), and RedBox is following the leader. The nerve of ANYONE who will defend a mega corporations is beyond reality.
This is just straight up price fixing. The studios have a right to charge whatever they want for their product, but should not have any say in what other people charge for their product. Redbox is paying them the same money as Blockbuster, they have just figured out a way of getting the product to the consumer in a less expensive way. I haven’t used Redbox, but I might start now!
The studios had the same hysterical approach at the beginning of cable television and it has increased their profits, not destroyed them. As long as we make movies people want to see, we are in good shape! Overcharging is just a way of compensating for movies that bomb. Didn’t anybody pay attention to what went down in the record business? Adapt to technology or perish.
If you’re really interested in this, Marc Cuban explains it all (except why Warners is suing).
http://blogmaverick.com/2009/08/05/the-ultimate-movie-paradox-redbox-vs-downloads/
While Coinstar / Redbox CEO Mitch Lowe talks about how he is “saving” consumers money with below value DVD rentals, why does he not talk about how many jobs his business model costs for those who work in the home entertainment business? I USED to work in home entertainment consumer packaged goods sales for one of the studios, however, ever since Redbox started to grow, studios have laid off thousands of employees (including me), video stores close, Blockbuster is closing stores. Independent retailers are struggling all because he devalues the product and can afford to give it away for $1 per night because a machine has “low overhead”. His new business model has resulted in lower fees and advances for independent films as well because charging 78% less than the average movie rental, with no revenue sharing opportunities for the studios.
HERE’S A THOUGHT: Anticompetitive below-cost pricing is already illegal under current federal antitrust laws. Predatory pricing claims are brought under Section 2 of the Sherman Act, 15 U.S.C. § 2. There are also anticompetitive predation laws under the Robinson-Patman Act, 15 U.S.C. § 13(a)
Watch what happens to $1 per night when all of the other video stores are going out of business. Once the competition is eliminated, it won’t be $1 anymore.
Thank you, Mitch. I’m unemployed. Good thing I can take some of my unemployment check and rent a movie for a buck, because at this point, that’s all I can afford.
Why limit redbox & netflix without limiting others. Yes the price point is lower but when you break it down per day redbox is cheaper. I myself sometimes keep redbox movies longer than 1 day so I pay more, some times more than I would pay at Blockbuster or other store type renter, while keeping the movie for less than they would have given me. It is not always cost affective. However, the convienience of redbox is what attracts me. All in all, I think that redbox was a great idea. Just because the the hollywood cartels didn’t think of it first, they have a problem with it. They seem to be jealous of a company that has figured out a way to increase profits in a slumpping economy when theirs aren’t.
Studios can charge whatever, but this stream is based on the very low price. From the consumer POV, redbox is a deal because it undercuts OnDemand (which is killing Blockbuster). If the DVDs were $3-5.00 a night (plus late fees…at a dollar a night its ok to forget it a few days), people would not rent them like they are, they would get OnDemand and not worry about returning them.
@ D.Nice:
“Do you work for one?” I would wager my savings that most people on this site work or have worked in the movie industry.
Why’s everyone crying because the studios want to decide what to do with their products? If they don’t like what Redbox does, they don’t sell to them. It’s their prerogative, and it’s their loss or gain. So you can’t rent a movie for a $1 anymore. Big deal. You’re not entitled to it, so stop whining and pay the extra $2 from Blockbuster.
I refuse to pay $4 -$5 to rent a movie. I only rent maybe twice a month so I’ll waste money with the monthly “rates” of $19.99. Redbox is the only way I rent. If I have to pay more, I won’t and I’ll just wait for someone to pirate a copy to me for free. Now the studios make even less. BRILLIANT!!!!!
Yeah! You so cheap! Good join ruining the economy. Redbox puts humans out of work. When machines get your job, all you will have left is pirating. But then, who can afford high speed internet without a job? Why not give your money to humans, who will then spend their income to support your job? Moron.
to me the problem with DVDs is studios blatantly double and triple dipping with varoius special editions of practically every noteable title…makes no sense to buy any but the must-have titles anymore
personally I don’t see the tragedy in paying $2 for a blockbuster rental vs. $1 for a redbox rental or how it is a victory for the people to pay a lower rental fee (or how a slightly higher fee justifies theft), but maybe that’s just me
I really don’t see why the studios go to the biggest retailer in DVD’s in the US, Wal Mart and offer them an exclusive for 30 days, then release it to everyone else. Problem solved. Isn’t that what Apple has been doing for years, with the Iphone, I don’t see anyone suing Apple because they sell the Iphone just to AT&T. They need to see how many DVD’s Wal Mart can push out the door in 30 days.