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More details are coming out today about the deal Redbox has made with Sony.

According to Sony, the deal is worth $460 million over 5 years, but can be ended early at Sony’s discretion. Also, as part of the agreement, Redbox can no longer sell Sony’s movies in their kiosks. Redbox often sells their used DVDs for just $7 in many of their kiosks, giving Redbox users a great bargain on movies they want to buy as early as 2 weeks after their release.

This destruction of movies was one of the things Universal asked for in its proposed agreement to Redbox last year. This is a slap in the face of the First Sale Doctrine, and with Redbox now agreeing to it with Sony, they likely will be forced into the same deal with other studios. Is this the beginning of Redbox selling out to the studios? If so, consumers are the one that are going to lose in the long run.

What do you think? Should Redbox have made this deal with Sony (and possibly Disney and Lionsgate)? Do you ever buy the “$7 Keepers”? Let us know your thoughts in the comments.

[via Reuters]

58 Responses to “With New Deal, Redbox Can’t Sell Used Sony Movies”

  1. Visitor [Join Now]
    Tim [visitor]

    While I’ve never used the $7 Keepers, it would have been nice to have the option. But if this means that we get to keep the $1/day and have access to a lot of movies, I’ll take that trade. There are plenty of other places to buy used & new DVDs.

  2. Visitor [Join Now]
    Chris Dillingham [visitor]

    I agree with Tim. For the new prices that the studios are asking for DVDs, ($15ish) I’ll just rent it five times from Redbox while it’s a new release and pocket the $10 difference. I’ll be bored with it after that. Sony wouldn’t get my business from new sales anyway.

    Still, this precedent is disturbing. Redbox buys them legitimately, and should be able to sell at their own terms.

  3. Visitor [Join Now]
    bedman [visitor]

    Never bought a DVD from redbox but rent all the time. $7 for a used dvd with no artwork and a redbox case just isn’t worth it to me. I am a bit of a dvd collector though. This doesn’t really bother me at all as long as redbox continues to offer $1 rentals, free codes, and broadens their selections.

  4. Visitor [Join Now]
    rb [visitor]

    Is my understanding of “the first sale doctrine” correct–that basically once Redbox, or BB, etc. BUY a dvd they OWN it and can/should, therefore, be able to do with the dvd as they please (rent or sell it to the PUBLIC to make a profit)? If my understanding of ‘first sale doctrine’ is correct, then can anyone explain why if as a private citizen you BUY a new dvd, you’re the first owner of that tangible dvd, you now legally OWN that dvd, BUT it’s still illegal to make copies of it for sale or profit, or even copies for your family/self or to use the copy for public showwing– per that warning at the beginning of every dvd movie.

    • Visitor [Join Now]
      The Happy Wife [visitor]

      It boils down to the fact that you have purchased the DVD, not the copyrights to the movie. It is the same when you have pictures taken at a portrait studio. You own the actual pictures, but unless you also purchased (or were given) the copyright to the pictures, you can not legally make copies of the pictures, as the photographer owns the copyright.

      • Visitor [Join Now]
        BK Broiler [visitor]

        Great answer!

      • Visitor [Join Now]
        rb [visitor]

        Hmmmn..thinking… Good analogy, but why then is it okay/not illegal when a person who has purchased the actual portrait (first sale) from the photographer can then go to Kinkos, or on their computer, etc. and make unlimited copies, or turn that purchased portrait (of say their family, or dog/cat, or kids) into a calendar, xmas cards, deck of cards, etc for family, friends,whomever? The purchaser doesn’t own the copyright of the portrait, but there’s no restrictions on the purchaser making copies and doing as they please with the copies (for private or public viewing) unless it’s illegal in the sense that it’s pornography, etc.

        • Member [Join Now]
          Mark [rb123456789]

          Many portrait studios will sell you the copyright for an additional fee so you can get copies done elsewhere as you please. Sears charges $24.99 for this, for example.

          There are legal restrictions on making copies of portraits, just as there are legal restrictions on copying DVDs you rent from Redbox. Both are ignored much of the time, and unless someone is generating profit for themselves in a big way it makes no fiscal sense for either portrait studions or movie studios to try to enforce the copyright.

        • Visitor [Join Now]
          Chris [visitor]

          “why then is it okay/not illegal”
          It is not ok. It is in fact illegal unless you also purchased the copyright. Don’t confuse the ability to do it with the legality of doing so. I see this form of copyright infringement as being akin to speeding. Thousands, if not millions of people do it with only a small percentage getting caught/prosecuted.
          I hope this helps :)

          • Visitor [Join Now]
            rb [visitor]

            Why then doesn’t say, Kinkos, request proof that you have the copyright of the portrait BEFORE they agree to make you copies of your portrait onto a calendar, etc. If it is so illegal, wouldn’t Kinkos be required to see copyright proof first–sort of like how a bartendar needs to see your id/proof of age before serving you beer, etc. or the bar is setting itself up for a lawsuit for underage drinking. Think we’re getting off base here… So, where’s the list of new releases? Michael must be on vacation!

  5. Visitor [Join Now]
    Jason [visitor]

    I agree. I don’t care about the used dvds. But will that force Redbox to raise prices if they can’t unload the used dvds they have??

  6. Visitor [Join Now]
    carla [visitor]

    if the movie is worth buying i’ll pay full price brand new with the nice cover at W-mart. but like the others, i agree i will get bored quick. plus some of those movies are really scratched you dont know if you will get a crappy one for keeps

  7. Visitor [Join Now]
    Crystal Morton [visitor]

    I have bought the $7 used DVDs frin Redbox. To me, it’s worth it. I can get two movies for less than what it would cost to buy it at the store, and it’s easy enough to download the cover art online and out it into my own DVD case.

    • Visitor [Join Now]
      Sean [visitor]

      If you have a good printer and quality glossy paper that’s fine. But with the cost of the new case added in to all of that it’s more like $8.00. Still not bad if you have all the supplies to do so. But what about the movies that were released as a two disc set? Redbox only gives you the first disc with the feature itself. THAT is a ripoff.

  8. Visitor [Join Now]
    FalconFour [visitor]

    I cannot fathom how the studios don’t realize the extent to which they’re shooting themselves in the foot over this. Do they realize that if people can’t get $7 keepers, they’ll get $1 keepers? DVDs are ridiculously easy to copy, and if people can’t “keep” their ad-riddled, poorly manufactured legitimate DVDs, they’ll find other ways.

    So, good on you, brain-damaged studios. Instead of selling copies to people willing to buy, you’ve effectively locked yourselves out of THAT revenue stream, as well as given people an extraordinary reason to dive into the world of DVD copying. Who’s to stop them? “Oh, that’s illLEEEgal”? I’m sorry, does anyone give a damn in the comfort of their own home? No. They’re not selling copies of their DVDs… and guess what? Now the studios aren’t, either.

    • Visitor [Join Now]
      chaering [visitor]

      $1 keepers are probably the REASON why $7 keepers don’t sell. It’s a small number of people that don’t want the DVD packaging, don’t mind a scratched disk and don’t know how to copy a DVD they really want.

      So why hold on to a product that isn’t selling? Just because the margins are near 100%.

      • Visitor [Join Now]
        FalconFour [visitor]

        Except that $1 keepers are typically used by only a small number of people, whereas now, if Sony refuses to sell DVDs (…?? Where’s the logic here?!), then people will have no other choice even if they want $7 keepers. I can’t believe Sony can’t see this…

  9. Visitor [Join Now]
    Amy [visitor]

    Let’s re-cap for a moment:

    The studios make the film, then distribute it to the
    movie screen theaters, who charge high prices to see the film ($7-$10)
    a person…
    then it comes out in DVD usually 3 months after selling for ($20)
    and then after that

    sold again to “RedBox”, BlockBuster, Netflix w/rental rights…

    what a major scam!!!
    And they want MORE!!!
    Screw them all…
    much easier to copy the DVD from a $1 rental from Redbox
    (the copies now are really good!)
    and let the others haggle over their price and rental wars.
    But, did you ever think if everyone was to make a copy (for private use only)
    there would not be enough jails anywhere to house all the people doing it?
    they know this…
    and the hoax is of course the biggest scare tactic ever used!!!!

    • Visitor [Join Now]
      Hagus [visitor]

      Jail space? No it wouldn’t be a problem at all to house those DVD pirates. They just release the murderers, rapists, and pedophiles from prison and then they have plenty of room to house the pirates, because everyone knows what vile creatures DVD pirates are compared to Murderers, rapists and pedophiles.

  10. Visitor [Join Now]
    PinkRhombus [visitor]

    I’ve bought the $7 dvd’s before. Mainly kid ones. Perfectly fine…and they’re never in the case at home anyway.

  11. Member [Join Now]

    I have never bought a $7 DVD out of a Redbox. Strange thing is that only the McDonald’s kiosks sell the $7 DVDs. None of the other locations(Speedway, Walmart, Meijer) have this feature.

  12. Visitor [Join Now]
    chaering [visitor]

    Redbox’s primary goal *has* to be to offer the largest selection of $1/night rentals. Otherwise they will get killed by the competition. $1 rentals is their core product and they need to make whatever concessions necessary to protect and grow that product offering in the future – including discontinuing the $7 used offering.

    It’s sad, however that the studios can’t find a better way of structuring the deal. Forbidding the sale seems egregiously short sighted. You would think that splitting the revenue from those used DVDs would bring Sony more money.

    It’s also sad that the studios are so hung up on their power trip that they can’t get the right product to their customers at the right time. It’s time to put constraining contracts aside and let the media stream effortlessly to the users – in HD.

  13. Visitor [Join Now]
    Chris [visitor]

    “This is a slap in the face of the First Sale Doctrine, ”
    I would bet that the specifics of the agreement avoid the term “sale”. Sony is probably now *leasing* the discs to Redbox (or a simlar term) and thus retains a way to demand their discs back instead of letting Redbox re-sell them.

  14. Visitor [Join Now]
    Alfred [visitor]

    I just see $1 rentals and $7 used sales, I don’t know how much Sony get from one or the other. Sony sell the discs to Redbox or they are leasing them?

    I know studios want us to see the movie at the theater, several time if possible, then buy the DVD, then the special edition DVD and the anniversary DVD. But if I saw the movie at the theater and want to see it again I will check the $1 rental before anything else.

    If they get something for the $7 sell, I guess is better than no sell for $15-$20. I can’t think of many films that I want to see more than 7 times (not counting kids movies, but I don’t see them either).

    I think redbox needs to do whatever they can to keep the $1 rental model. Is a really money saver for me.

  15. Visitor [Join Now]
    The Happy Wife [visitor]

    I have never seen the $7 purchase option on the machines I have used, but probably would not use it anyway. We do not typically purchase movies unless we REALLY like them and then we buy them when they are first released.

    I am looking at this from a different angle and seeing that it is a poor business decision on Sony’s part and potentially will affect the availability of new releases within the RedBox system. Part of RedBox’s budget comes from the resale of the $7 DVDs. If they are unable to re-sell the DVDs and recoup some of the money they spent, that is less money they can spend on the next new release, resulting in fewer copies purchased and therefore fewer copies they need to throw away after. Businesses try to limit the amount of waste they have and with SONY insisting on RedBox destroying the movies after, that creates a large amount of waste for RedBox.

  16. Visitor [Join Now]
    just me [visitor]

    I’ve bought used DVDs from NetFlix in the past but they came in the original case. I have notT bought any since the extras have been disappearing on “rental” discs. I am much more likely to buy a movie when I know what I’m going to get on the disc. So now, if I buy a disc, it’s most likely one I have seen but I buy the regular retail version so I get everything.

  17. Member [Join Now]

    This is just another attempt by Sony to show their corporate greed. They are disqusting!!
    First off, they put viruses on everyone’s computers who tried to download their movies to their own computer (this is legal BTW) for their personal viewing. They were found GUILTY in a court of law and were made to pay for the damages. Now this??? No wonder so many
    people make their own copies. I say-too bad for Sony. Everytime they try to come out with a new and creative way for you not to be able to copy their movies- there is a
    fix. A friend of mine copies movies all the time for his personal pleasure and had a hard time at first with “Haunting In Connecticut” then with the click of a few keys-There it was a by-pass to Sony’s “supposed” copyright protections. They are a joke. A greedy disqusting
    joke. I will NEVER pay full price for ANY of their movies!!!

  18. Member [Join Now]

    P.S. BTW: Who now thinks that the prices will stay at $1.00 for a rental at Redbox??
    If you do- then your’re outta your minds!!!
    If Redbox can no longer sell the movies that they legally purchased from Sony they will lose a a signifigant portion of their profits. And since costs ALWAYS get passed along to the consumer (you and I) we’ll see how long it takes for the price to go up at the Redbox kiosk.

    • Visitor [Join Now]
      Sean [visitor]

      If they so much as raise the price to $1.50 I will stop renting from them altogether and go back to the hassle of mail order services such as Netflix and Blockbuster. I once figured I could rent 16 movies a month for $16.00 from Redbox… about the same I was getting from Blockbusters 2 at a time program, but I would not have to wait so long for new movies if they got rented out (like I so often did with Blockbuster) and I would not have to deal with the mail delays. If I have to pay $24.00 now, that will take away all advantages that Redbox has. They CAN NOT raise the price, they will go out of business. Mark my words.

  19. Visitor [Join Now]
    Jim [visitor]

    Redbox buys their movies from wholesale distributors VPD & Ingram, at a greatly reduced cost. Part of their agreement with these companies is that they ( VPD & Ingram ) will repurchase the DVD’s after a period of time. VPD & Ingram then tries to resale the used DVD’s. ( I know this because I am a customer of one of these companies, and they offer these used products for sale on their customer accesible web site.) VPD currently has hundreds of thousands copies for on their website. ( apparently having a hard time selling them, as some titles shown as having over 15,000 copies)

    VPD & Ingram also prepares the DVD rental cases & labels for the product for Redbox, keeping the original cases & DVD artwork for resale when the product is returned.

    As far as the lawsuit with Universal Studios, Universal had threatened VPD & Ingram that if they continued to provide DVD’s to Redbox, that they would no longer be allowed to distibute the Universal products.

  20. Visitor [Join Now]
    Pootroot [visitor]

    If it is only Sony then no sweat! I do buy the (NOT 7$ dvds but $6 dvds) in my state from Price Chopper. and McDonalds.

  21. Visitor [Join Now]
    Mary [visitor]


    • Member [Join Now]

      If it’s a one time use code please don’t post these codes as they don’t do anyone any good! So if you got the code from customer service due to a problem it won’t help anyone else.

  22. Member [Join Now]

    you people are sooooo crazy why would you come on this site and Sony that you will rent the movie for $1 then make a copy of it!!! come on people think b4 you post on here

    • Member [Join Now]

      Yeah and you should proofread your posts before you post them! That way they would at least make sense and you wouldn’t look like a total MORON!

  23. Member [Join Now]

    I bet Redbox is not going to lose any revenue. They will be able to sell bulk of movies to a distributer, who in turn will repackage and sell.

  24. Member [Join Now]

    why are the new releasses for 7/27 not posted yet?!

  25. Member [Join Now]
    Bikemiles [bikemiles]

    For a bit or irony the adds here show a link to a seller of used recent DVD’s for $6 or less. I’ve always thought that they studio executives were “alleged” crack heads who dream up these restrictions to try to increase profits (to pay for their alleged drugs). In an “alleged” drug induced state the fiction Sony executive figures “Oh my gosh! If Redbox sells $7 keepers people might figure out that DVD’s can be bought used!!!!! Sony really, really needs mandatory drug testing for their executives if they think that the consumers are that stupid and clueless. Hello.

    If Redbox gets a discount with a mandatory return (with some provision for non returns charged $25 then go for it. If it’s just a “cease and desist” with no discount there should be a fight showing the pattern of renters like Blockbuster selling used DVD’s. For the smart and savvy consumer, no change except for an increase in online purchases of used DVD’s and a public spread of the knowledge on how to do this.

  26. Member [Join Now]
    Bikemiles [bikemiles]

    Use covers “non-commercial use”. I can’t charge admission for people to watch a DVD I own but pretty much it is mine like a book I have read.
    the “alleged” crack head “executives” in the entertainment industry can’t fathom this.

  27. Member [Join Now]
    AmethystStar [amethyststar]

    Sorry I didn’t know how to start a new blog. But just to let anyone know that is looking for the new Fast and Furious don’t waste your time looking for it at the redboxes.

  28. Member [Join Now]
    Mark [rb123456789]

    It’s funny to see everyone going on about this. Netflix did the same thing, they ended their used DVD sales last year. With used DVD prices dropping endlessly the studios want to limit and control the supply.

    Remember that the actual DVD and packaging is a relatively small part of the cost of a DVD. If the used DVDs from Redbox just go into a landfill plenty of money has already been made from them, and the studios can make more by manufacturing new ones and selling them as new at close to full price.

    • Member [Join Now]

      “If the used DVDs from Redbox just go into a landfill plenty of money has already been made from them, and the studios can make more by manufacturing new ones and selling them as new at close to full price”

      you can not put dvd in garbage it is illegal in my city. if caught , you have to pay

      a huge fine . fyi i live in california usa . fyi ca is totally financially broke .

    • Member [Join Now]

      You are so right. I’m glad someone pointed this out. But consider that the margins are razor thin. How long is a title in redbox? Think of the life cycle of a single DVD. Purchased from a distributor at (guess) $5 (if buying say 25 DVDs for 15,000 kiosk locations would be 375,000 disks for $5 each would be $1.875 million dollars.) Lets also assume this DVD title is a hit movie like Fast & Furious. A singular disk only needs to be rented for 5 days to break even on product cost and probably another 3 days to break even on fixed and SGA costs. So in essence a popular title needs to be rented for at least 8 days before net income can be achieved. How long do titles stay up. As popularity fades, disks have to be removed for new titles.

  29. Member [Join Now]

    Why does Redbox insist on adding Universal movies such as “Fast and Furious” to their website if we all know they are not going to have them because of the lawsuit? It’s almost as if they want the public to waste their time trying to track down that elusive copy of the movie only to discover it doesn’t exist in their machines?!!? Come on now Redbox….include only movies you know for sure you are going to be able to rent. Stop wasting our time!

  30. Visitor [Join Now]
    reneemardis [visitor]

    A lot of people I know copy the movie then return it…why buy it for 7.00? If youre gonna say its illegal well so is all this antitrust crap coming out of universal and sony…

  31. Visitor [Join Now]
    Movietime [visitor]

    It’s a good thing simply because redbox customers have a choice of seeing the movie before purchasing and yes I’m a redbox buyer. It will be Sony’s lost because we still have a choice of purchasing other movies. However, once Sony see how their sales have dropped maybe they will think twice. Redbox must continue on with business. Movietime saying “business is business” and the show must go on. One thing for certain Redbox is about business and one thing has nothing to do with the other, it’s just business. Movietime saying “movietime is on”. Later!

  32. Visitor [Join Now]
    cooldru [visitor]

    Just a question. Y can blockbuster sell movies for 3.99?

    • Member [Join Now]
      Mark [rb123456789]

      Blockbuster waits a long time, often months, to sell cut rate DVDs, and by that time the studios have sold a lot of new DVDs of that title. Redbox however has limited storage space in each machine and therefore starts selling used DVDs in as little as two weeks after release, directly affecting new DVD sales.

  33. Visitor [Join Now]
    Bethany [visitor]

    every single used dvd i have boughten from the kiosks have been scratched to the point of crappy play time. i have a new blu ray player, so you can’t say i don’t have progressive scan. obviously i do.

    but, i have to say their customer service is awesome and the returns were simple and i was paid back almost immediately.

    i will never rent a movie or buy a movie from a rental place again… portable kiosks are the way to go. f*ck blockbuster/hollywood video/movie gallery (<-owns hollywood)… for they have sh*tty prices.

  34. Member [Join Now]
    Bikemiles [bikemiles]

    I rented “Fast and the furious” from Redbox this weekend. It opens with a “train” of four gas tanker trailers in the Dominican Republic. This has a “directors commentary” which is increasingly rare with studios pushing Blue-Ray.

    As far as the no “keepers” arrangement, if Redbox gets a significant discount by forfeiting resale rights that is fine with me. I can get used movies online. If the studios try to make this a condition of buying movies that are used for rental without a special discount that could easily be an anti-trust violation.