Redbox in Jeapordy?
First allow me to say that the MYM forums have been cleaned out and that spam that leaked through has been dealt with. Feel free to venture in there…
One of our faithful readers sent us an article regarding the issue of RedBox coming under fire from the Hollywood super powers. Apparantly they don’t like the fact that RedBox is such a good deal and they are not getting a cut. They say that in order for RedBox to continue the benefits of distribution (read: stay in business) they must agree to a revenue sharing program under the following guidelines:
- Wait 45 days after a DVD’s release date before renting it;
- Pay a royalty of 40% of gross rental revenues;
- Promise that prices never dip below $0.99 per night; and
- Destroy all previously rented DVDs rather than offering them for purchase for $7, as Redbox currently does.
What if Redbox refuses? Universal Studios allegedly threatened to cut off the distributors (Ingram and VPD) who sell Universal DVDs to Redbox. I’m guessing this threat is meant to get Redbox cut off by its distributors — obviously, Ingram and VPD aren’t going to be thrilled to lose all of their other customers over the Redbox account.
This is a breathtaking attack on the first sale doctrine, which makes it crystal clear that once you’ve bought a DVD, you can rent and resell it at any price and on any terms you like. Universal Studios apparently would prefer a world where millions of DVDs are shredded and put in landfills to one where consumers can rent a DVD for $1. (Although this is an improvement over its former corporate sibling, Universal Music Group, which believes that throwing promo CDs away is illegal.)
Hat tip to Paul Sweeting at ContentAgenda, who brought this story to light.
-From EFF, legal analysis by Fred von Lohmann
CC licensed photo by Eddie Does Japan
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Comments
This kind of stuff makes me mad. This is exactly why Mr Chiot’s and I don’t rent or watch movies much anymore. It seems like everyone thinks the big oil companies are such bad guys, but perhaps they’ve never read about the movie/music industry. Anything when you buy it you can rent it out, sell it, whatever you want, but not movies & music. They just want to make the price closer to what it costs to buy in hopes that people will just buy the movie instead because they make the most money that way.
Can you imagine if all companies that rented things had to follow guidelines like this?
Agreed – this kind of stuff is a shame. The convenience of RedBox made it an extremely nice addition to supermarkets and the like. Another example of a conglomerate industry standing in the way of a form of progress.
Definitely disappointed to hear this. I hope this tactic fails and at least that they don’t get to all the $1 box rentals companies that have popped up.