So here is some more info for you.

In regards to the distributors: When Redbox was smaller and the flow of used DVDs was lower, the deal made sense. As Redbox grew, the flow became bigger and the distributors were having a tougher and tougher time getting rid of all that used product. Now they had a deal in place with Redbox and they were having trouble getting out of that deal. Plus some of the studios were getting annoyed at the Redbox pricing and the flood of used DVDs. So even the distributors were happy when the studios stepped in and shut down the buyback deal.

In regards to the studios and distributors: The distributors buy product on terms, not cash up front. The distributors were having trouble making payments. The product remains the property of the studios until it is paid for. The studios had every right to step in and make sure they were going to get paid for their product. There is no rule saying you have to sell something to someone on credit if you know they won’t be able to pay you.

You can go through the Coinstar numbers and see what they say Michael. The company just barely manages to squeak a profit out of their machines. And that was with the deal in place. Add an additional 10% to the COGs (that’s less than $1.00 per unit) and the machines are losing money.

They will be reporting their numbers in a couple of weeks. It will be interesting to see where they are at before the real delays kick in.

As for Redbox disappearing? I have mentioned before that I am not affected by Redbox in the least. My reason for posting here is that Redbox has numbers that do not support their business model. They are making claims against the studios that are untrue. I dislike the company because it appears like they are a bottom feeder and are lying to their investors.

If Redbox raised their prices to $2.00 a rental, I would likely be a Redbox supporter. I think they would be profitable at those levels. I think the studio problems would go away. I think people would still use their machines at that price.

I think that they will end up raising their prices and likely within the next 12 motnhs. Time will tell.

I certainly “know” no such thing about a guaranteed buyback. I know only what a Redbox rep told me regarding the possibility of my site selling off some old inventory – a discussion I had one time and have heard nothing about since. If the buyback was “guaranteed”, why would there even be any discussion at all about this? They certainly wouldn’t need me – or anyone else – to resell the old inventory if this was the case.

Regardless, the figure that I heard was nowhere near what many esteemed detractors such as yourself have claimed on numerous occasions.

I certainly do not “know” that the studios are within their rights to tell an external company how to do business. What are they, the government now? The mafia? Would a distributor really make a deal that would not be profitable for them, anyway?

For all I have heard regarding Redbox margins, they don’t seem all that narrow, especially if they can buy at retail and not take a major hit on their profits. Like I said before, what I read was that buying at retail redbox is paying about the same as they were at wholesale, but with additional man hours to make the purchases. Take a look back at some posts over the past few weeks and you will find this information.

I don’t waste my time telling lies, John, I leave that to the shills. Personally, if redbox disappeared tomorrow, it wouldn’t affect me too much. Can you (honestly) say the same?

You also know that the net result of this guaranteed buy back was to reduce the COG to well below that of what Wal-Mart and Blockbuster pay for their product.

You also know that the studios are well within their rights to place demands upon their distributors to make sure that they stay solvent and are able to pay their bills.

You also know what narrow margins that Redbox is operating on and what effect an increase in COGs will have upon the company.

I know that you make money off of promoting Redbox. That is fine. But there is no need to lie to your people about the facts in the Redbox vs. the Studios case.

Please provide proof of your claims that Redbox wants better pricing than what Best Buy and Wal-mart get from the distributors. Provide proof that they are indeed the ones who are trying to make the playing field unlevel.

It is my understanding that redbox buys DVDs from wholesalers such as Ingram and VPD at similar prices that others are paying. If indeed they are paying a lower price than others, it speaks well to their bargaining skills with Ingram/VPD. However, this has nothing to do with the studios, and is between Redbox and the wholesalers.

It seems to me that there was no problem until Universal (and now others) demanded that Ingram/VPD stop selling to Redbox – at any price. As far as I can read, the studios didn’t say they can buy from Ingram/VPD at a higher price, not that the studios have any right to dictate price to the wholesalers, anyway.

What evidence do you have that is contrary to what I have stated?

Ball is in your court.

That is what I am doing.

Redbox customers like to jump up and down and say “Movies are only worth $1.00 because Redbox rents them for $1.00!”

I like to point out that Redbox cannot make any money renting movies for $1.00 if they have to play in an even playing field.

I have the facts on my side of the argument. You guys just have emotion and cheapness. I’m not too worried which side will win.

I can’t wait to hear you guys moan and wail when Redbox raises their price to $2.00 a rental. The betrayal is nearer than you think.

Even the studios are willing to let Redbox charge $1.00 for a rental is they wait long enough.

I’m glad you are in agreement with the studios.

So there’s no reason to pay more. If someone is offering it to you convenient and cheap, how many people would rather pay more just because they’d pay more if they absolutely had to? I see all the VBG guys raising their hands, but noone else.