In the biggest surprise of the year, Redbox has now filed suit against Warner in federal court. This makes the third big studio Redbox has taken on, after their recent suit against Fox and their suit against Universal last year.
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.
With this lawsuit, Redbox now is taking on studios responsible for 50% of movies made. While this response was clearly expected, this whole fiasco is clearly all about PR. Redbox has even recently put up a new website at www.savelowcostdvds.com to keep the public informed and garner more support.
I agree that the studios are being greedy here, and probably should rethink their strategy, but Redbox knows they have the public on their side. It makes sense for them to sue any studio that implements these types of policies. As long as they prevail against Universal, they automatically win all cases, but that may not even matter if they win the war of public opinion.
“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.”
Of course, we know that Sony and Lionsgate have recently signed 5-year agreements with Redbox, and we believe that Disney may be close to signing as well. These deals have all included compromises that Redbox would have rather not made, but these 3 companies make up about 25% of the market, so it is good for Redbox to have them on their side here.
The only “major” studio left is Viacom (Paramount), and I am sure we will hear where they stand very soon. And, as always, Inside Redbox will be here to keep you informed.
Time will tell whether the courts or public opinion will decide this issue. What do you think?