Fox The Latest Studio To Declare War On Redbox

from the not-a-good-idea dept

It was just a few days ago that Mark Cuban was singing the praises of Redbox as the perfect model for movie distribution, claiming that the movie studios loved it, because they pay the studios a minimum guarantee with no returns. Cuban claims that this is a no-risk deal for studios who get pure incremental revenue. That didn't read right to me, because it was just a few months ago that it seemed like Universal Studios was doing everything it possibly could to kill Redbox. And, now, Mark alerts us to the news that 20th Century Fox is also demanding wholesellers not sell to Redbox. In fact, the article notes that Redbox only has a deal with Sony. It purchases all the movies from other studios through wholesale middlemen -- which seems to contradict Cuban's claims. Either way, this is a story of the movie studios letting their own greed interfere with innovation. These movies are being legally purchased. It's difficult to see how the studios have any leg to stand on in preventing Redbox from using their movies in its service. Isn't there a First Sale right somewhere?


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    ChurchHatesTucker (profile), Aug 7th, 2009 @ 10:53am

    This is disturbing

    They were happy to license it to the wholesaler, so what's the problem?

     

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  2.  
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    Anonymous Coward, Aug 7th, 2009 @ 10:57am

    Is it Boycott Teim yet?

    Looks like Rupert Murdoch has genuintely fallen off his rocker. Let's drain his net worth faster than his last divorce!

    Boycott Time!

     

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  3.  
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    Jrosen (profile), Aug 7th, 2009 @ 11:35am

    Gotta wonder

    If they ever test the higher-ups in these corporations for drugs. Seems like most of them would have to be continually high to come up with the shit they do, and actually believe it

     

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  4.  
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    ac, Aug 7th, 2009 @ 11:38am

    just created a redbox account

    I'd seen the machines before, but wasn't really interested. Now though, i think i'll have to try it out once.

     

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  5.  
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    Yakko Warner, Aug 7th, 2009 @ 11:55am

    First Sale right

    I'm sure they'll just take a page out of Netflix's book.

    Specifically, the bottom of page 11 of Netflix's 10-K annual report filed Feb '07. ;)

     

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  6.  
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    Chucklebutte (profile), Aug 7th, 2009 @ 11:55am

    Ive always been under the assumption that if you purchase something its yours to do with as you wish, and if that means that you wish to resell it at any price it is legal...

     

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  7.  
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    Freedom, Aug 7th, 2009 @ 11:59am

    Waste of time...

    >> Our desire is to maintain for Fox movies a thriving network of distribution serving all types of consumer preferences, on reasonable business terms for Fox as well as our distribution partners.

    Sure sounds like these guys (Redbox) are just making the market more efficient and since it hurts Fox, etc., they don't like it and are fighting back.

    As they say, just follow the money!

    At the end of the day, no one wants their well of money to dry up, but it would be nice if someone would look at this as an opportunity instead. The fact that Sony signed up truly amazes me consider how control freakish they've been in the past. This along with their "open" eReader product and maybe just maybe they are becoming a bit enlighten ???

    Freedom

     

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  8.  
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    Another AC, Aug 7th, 2009 @ 12:05pm

    Why must they

    Repeatedly try to make it so difficult for people to consume their products. I just don't get it.

     

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  9.  
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    yozoo, Aug 7th, 2009 @ 12:09pm

    I dunno

    Im not sure I see a "vending machine" as terribly innovative? If anything thier innovation is in getting content suppliers to allow content to be sold in a vending mchine and this doesnt appear to be going that well?

     

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  10.  
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    aston techno, Aug 7th, 2009 @ 12:10pm

    redbox

    does the phrase "straight to video" ring a bell?

    most of these movies have had no box office

    the consumer should be the best educated on movie trash

    unless you're into trash redbox is a joke

     

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  11.  
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    Pitabred, Aug 7th, 2009 @ 12:10pm

    Sure there's a first sale right

    But nobody requires that you sell anything to anybody. If the movie studios want to cut off their distributors that work with Redbox, that's their own problem. It's a horribly stupid, anti-consumer, ill-will generating move, and it will severely limit the popularity of their product, but hey, that's their problem. Nothing illegal about it. Note how the studios aren't suing anyone, or doing anything other than saying "We won't share our toys with you unless you play the way we want you to". You're welcome to not share their toys.

     

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  12.  
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    iNtrigued, Aug 7th, 2009 @ 12:27pm

    Re: Gotta wonder

    It seems you may have stumbled on to something there! Maybe there is some correlation between the higher-ups in the corp. & them being high??

    The high altitudes, low oxygen level, not enough oxygen to the brain, etc.?

    Fascinating!

     

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  13.  
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    mjb5406 (profile), Aug 7th, 2009 @ 12:35pm

    Murdoch?

    Isn't 20th Century Fox also a Murdoch property, or is it just the Fox television networks? If he has a hand in it, it's a pretty good explanation. Guy is a megalomaniac.

     

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  14.  
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    Travis (profile), Aug 7th, 2009 @ 1:06pm

    Why do people break

    up a sentence between the subject and the body like this?

     

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  15.  
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    Travis (profile), Aug 7th, 2009 @ 1:08pm

    Re: Sure there's a first sale right

    Are they purchasing anything though? I was under the impression that everything you buy relating to music and movies was only a license. Sure...you own the physical disc but you don't own the movie itself...and you don't have the right to distribute it as you see fit.

     

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  16.  
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    Bob V (profile), Aug 7th, 2009 @ 1:42pm

    I'm not sure I actually understand what the problem is. I was under the impression that these were movie rental vending machines. I could understand blockbuster or the local mom and pop video rental store being upset but how can a company whos purpose it is to make and distribute movies be upset that someone is buying their product. What am i missing?

     

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  17.  
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    Alan Gerow (profile), Aug 7th, 2009 @ 2:08pm

    Re:

    They want a cut of the rental fees, not the first-sale. They simply want MORE money. They're getting paid once for the product, they want to keep getting paid for the same product.

    The problem is this (where we = "movie studies that don't get it"):

    We make money.
    Someone else is making money off our product, after we make our money off of them.
    We want the money that person is making, too, without doing the work they're doing.

    Essentially RedBox is ADDING VALUE to their product, and they want to be paid more for the added value that they didn't add.

     

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  18.  
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    hegemon13, Aug 7th, 2009 @ 2:50pm

    Re: I dunno

    It's not the vending machine itself that is innovative. It is the amazing, stable networking they have set up to make the machines truly convenient. Being able to search and reserve online makes for a truly great experience, rather than driving from one video store to another looking for the latest, greatest release. Plus, they have really good customer service to boot. A couple weeks ago, a Redbox had an error when trying to dispense my DVD, but it still invalidated my coupon code. I was mad, but the next morning, I received an email that said they had detected an error when I tried to rent, and sent me a free coupon code to compensate. I did not even email them about it. They automatically detected and fixed it. A nationwide network of vending machines capable of that level of service is innovative.

    "If anything thier innovation is in getting content suppliers to allow content to be sold in a vending mchine and this doesnt appear to be going that well?"

    They don't need the content suppliers to allow it. It's called "right of first sale." All they have to do is purchase the DVDs, and they have the right to rent or resell them as they see fit.

     

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  19.  
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    hegemon13, Aug 7th, 2009 @ 2:51pm

    Re: redbox

    Huh? They have all the theatrical movies, with a few D2V movies thrown into the mix, just like any video store in the nation.

     

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  20.  
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    hegemon13, Aug 7th, 2009 @ 2:56pm

    Re: Sure there's a first sale right

    Wrong. They don't have to sell it, but IF they sell it, they lose the right to control it. They have no legal basis to stop their wholesalers from reselling the movie to whomever they choose. What are they going to do, stop distributing the movie at all?

    It's also quite questionable to offer a product on the market, but target certain customers to whom they refuse sales. That's pure antitrust in my book. Hopefully, the courts recognize it as such. To clarify, they're not just refusing to sell direct to Redbox. They're putting other companies on notice that selling to Redbox could have negative consequences. That type of meddling with a third-party contract is generally considered anticompetitive and illegal.

     

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  21.  
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    Anonymous Coward, Aug 7th, 2009 @ 3:45pm

    Re: Re: I dunno

    Great Points but in addition to their cutting edge network they have the added benefit of prime location. They basically become an impulse item after checkout at major hubs. Plus their pricing model is phenomenal.

     

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  22.  
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    Peter, Aug 7th, 2009 @ 4:49pm

    Why does anyone pay any attention to what farts Mark Cuban emits between his lips?

     

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  23.  
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    Anonymous Coward, Aug 7th, 2009 @ 4:59pm

    Re: Re: I dunno

    "They don't need the content suppliers to allow it. It's called "right of first sale." All they have to do is purchase the DVDs, and they have the right to rent or resell them as they see fit."

    Wait though... there is no right to wholesale prices. So Fox limits the distributors to sell only to approved retailers, and away you go. Redbox can buy all the copies they want at Bestbuy and resell them, good luck on making a profit at that level.

    There is also potential that they would get in trouble if they didn't identify the merchandise as "used", as it was bought retail.

     

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  24.  
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    Secretary Bird, Aug 8th, 2009 @ 1:32am

    Re: Sure there's a first sale right

    You own that particular copy of the movie or music. It is yours to do with as you please (within the bounds of copyright law). If this was not so, there would be no used movie/music/video game market.

    The B.S. about only purchasing a license to access the content on the disk is a load of crappe. That would imply that the producer could come and confiscate your disk at any time if they feel like revoking this so-called license.

    They can bitch and moan all they want about it being a license and not a product all they want. Just because they claim such, does not make it true.

     

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  25.  
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    EDGAR R BRISTOL, Aug 9th, 2009 @ 6:58pm

    my machine

    my daughter and I had taken a refrigerator box in 1998 and we built a machine called the easy dvd for her school project ..the idea came from my stupid hours as a bartender never getting to the rental house in time, let alone returning them,,,,I was wondering how to find out the origin of red box, curious if it was from a school teacher in louisiana.....

     

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