It is just typical that the US film studios would agree an unpromising deal for distribution, then turn around when it has made the distributing company a profit, and try to change the rules. So it was with no surprise that we noticed that Redbox Automated Retail, the DVD kiosk specialist found that its delivery is being pushed back to 30 days after other retailers, and that it has reached for its lawyer friends to fight the deal.
This week it has filed suit in a Delaware Federal Court against 20th Century Fox in response to new distribution terms proposed which would mean taking a 30 day delay on release dates. You spend all that money developing a new route to market and when it is successful, all the ‘traditional’ routes to market complain so bitterly, the rules get changed.
“Redbox’s cornerstone principles include providing customers with a convenient way to rent new release DVDs at an affordable price,” said Mitch Lowe, president, redbox. “At the expense of consumers, 20th Century Fox is attempting to prohibit timely consumer access to its new release DVDs at redbox retail locations nationwide. Despite this attempt, redbox will continue to provide our consumers access to all major new releases including 20th Century Fox titles at our more than 15,000 redbox DVD rental locations.”
Redbox has just signed a distribution deal with Lionsgate expanding its deal to include new release titles and Redbox had already signed a similar deal with Sony Pictures Home Entertainment (SPHE) in July.
Redbox also received permission from a Federal US court this week to pursue an antitrust legal action against Universal Studios Home Entertainment when it denied the Universal motion to dismiss the case. “The Federal Court’s decision marks an important step forward in our effort to protect consumers’ right to convenient, affordable access to new release DVDs at Redbox locations nationwide,” said Lowe.
Redbox sued Universal after the company told distributors not to release DVDs to its kiosks until 45 days after their initial release.
Warner Brothers last week said it will also begin delaying distribution to Redbox to 28 days after commercial release so it is almost sure to get yet another legal action. Redbox operates a network of over 17,900 $1-per-night DVD rental kiosks.
Meanwhile in Ireland, Tesco the leading UK grocery chain, has begun a similar trial of DVD vending kiosks using technology supplied by The Movie Booth. It will just try out two kiosks to start to test the concept which if successful will see the kiosks deployed across Tesco stores in Ireland.