arstechnica.com — Universal Studios is facing a lawsuit from DVD rental kiosk company Redbox over a predatory revenue sharing agreement. Universal has threatened to cut off Redbox's suppliers if the rental company refuses to stop selling used movies and give the film company 40 percent of its revenue.
Oct 29, 2008 View in Crawl 4
phosphor112Oct 29, 2008
I blame Universal Studios GREED to the fall of this economy!!!!el oh el.On a serious note...if blockbuster and other video rentals dont have to do it, why redbox?
johanrocksOct 29, 2008
@captainanndorIt's actually 40% of revenue (at least according to the article description), which, depending on the profit margins, may even be 100% of profit and then some.
bushoutOct 29, 2008
"most pawn shops sell Blu-Ray for $10."WHAT, are you crazy? Oh, sorry 'pawn'...
ihatediggcomOct 29, 2008
What Universal not making enough money?I thought they were a good movie making company.
4zero1Oct 30, 2008
I use Redbox on average 2-3 times a week. These companies need to be regulated.
notadiggtardOct 30, 2008
Never used redbox,but Universal is the king Dick.Hope they get their ass handed to them.
Closed AccountOct 30, 2008
I'm actually turning 22 on the 20th of Nov. And first of all I think there is PLENTY of room for debate on this.. I'm not aware of any (accurate) studies that point either way but I think even if it was easy for the average user to do, most people would still go the legal route. I NEVER thought I'd start paying for the majority of my music, I even got it from the Russians for a while, but low and behold I haven't acquired a single song outside of the ITMS for I don't know how long. Even though downloading from the Russians is ALMOST as easy, buying it just seems.. I dunno - right.
radman123Nov 12, 2008
There are always to sides to the story. Check out what others might think of this.REDBOX SUES UNIVERSAL OVER 45-DAY DELAY FOR NEW RELEASESVideo Buyers Group has not given out our prestigious AT-A-BOY award for quite some time, but we truly believe Universal is deserving so AT-A-BOY Universal!Here is how Uni earned this award. Universal's new Redbox revenue sharing agreement limits the number of units of new releases per kiosk to 8 units for the first 45 days from street date. Also all units now must be destroyed instead of being sold to consumers used. Universal is saying, "Take it or leave it."To further drive home the "take it or leave it" revenue sharing agreement being offered to Red Box, both VPD and Ingram Entertainment will be terminated if they continue to supply Redbox with Universal DVDs.The lawsuit filed Oct. 10th by Redbox in U.S. District Court in Delaware claims Universal's new terms for vending machines would eliminate the low-cost rental alternative for consumers by prohibiting Redbox from renting or selling Universal DVDs until 45 days after they first street, limiting the number of Universal DVDs the Kiosk operator can stock, and requiring Redbox to destroy Universal's DVDs after they leave the kiosk, instead of being sold as used to consumers. Redbox is seeking an injunction that would prohibit Universal from limiting the number of its DVDs in Redbox kiosks. Fiscal damages, declarations of copyright misuse, and that the revenue-sharing agreement violates antitrust laws.So what is the real issue? Lost sales, lost rentals and lost revenue. Where are we seeing the majority of Redbox kiosks and vending machines being placed? They are showing up at locations that traditionally are best noted and suited for sell-thru to include Walmart, drug store chains such as Walgreens, and grocery stores. Picture a mom in a Walmart store with a couple of kids in the cart and a limited budget. There are a couple of new release family titles they want to watch over the weekend. They stroll through the video department and find both titles for sale for $15.99. Now mom knows these titles are most likely also available by the front door for rent in the Redbox for $1.00 each. What decision do you think mom will make? Most would bet on the Redbox getting Mom's dollars for these two titles. Similarly if this mom is going for dinner at McDonalds and wants a movie for the evening, is she going to make an extra stop at the video store to rent a movie for $3.50 or will she goinside the McDonalds and rent the video for $1.00? Obviously the issues are pretty much the same for the sell-thru side of the business as they are for the rental side. Previously viewed units are beginning to show up in vending machines at extremely low price points, again having an affect on both sides of the business.Vending machines with price points we have seen to date are causing real cash flow issues for the entire industry, which will only get worse if something isn't done. If Redbox and other vending machines companies want to lose millions of dollars, if not hundreds of millions, it's up to them. To destroy an industry while they're doing it is not what makes our economy work. If there are legal grounds for an anti-trust lawsuit, there should also be legal grounds for unfair business practices to the point of predatory pricing, which is illegal in many states.Again, At-A-Boy Universal. We do expect other studios to offer similar terms and conditions in the future, depending upon the outcome of the lawsuit. To all other studios, this is the right thing to do for our industry.
radman123Nov 13, 2008
It is real simple people. This direct negotiation of Revenue Sharing by Universal is offered to all rental outlets. Redbox is the only one crying foul.Redbox can bypass the studios and buy from Walmart or where ever they want. There is nothing illegal about it. They could put out the product, day and date with street date and sell all the used discs they want.This will leave a level playing field by all who rent and sell movies who do not want to follow a so called bad deal.So the real question is; Why the Fuss Redbox? You don't like the terms, fine, move on, get your movies elsewhere.The answer is. They will not be able to eliminate competition!!! At the current amount of Revenue Redbox is making versus the cost, they are losing millions of dollars and would lose even more if they had to buy from Walmart.
radman123Nov 13, 2008
Actually the majority of all these so called Tyrant Studios are millions of dollars in debt. Universal will probably be bought out soon.Small trivia.Warner has more debt than 1/3 of all countries have assets.
stomper622Nov 26, 2008
This made me LOL. Good job, sir.
andrewmbAug 13, 2009
Redbox is to PirateBay as Methadone is methamphetamine.
Closed AccountAug 20, 2009
The Redbox VS. Warner Brothers case is now online at the AllRise court - <a class="user" href="http://bit.ly/421q8d" rel="nofollow">http://bit.ly/421q8d</a>