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Wal-Mart, Target Trying To Block Redbox From Purchasing DVDs?
from the how-nice-of-them dept
We've described how some film studios are in a huge legal fight with Redbox over DVD rentals. While some studios have come to their senses and are happy to work with Redbox, others have been trying to pressure the company into giving it a cut of rental revenue and/or delaying when it rents newly-released movies. Those studios convinced the big distribution wholesalers to stop selling to Redbox (which seems like a pretty clear restraint of trade or antitrust issue), and in at least one case had convinced retailers not to sell to Redbox. Of course, there are ways around that as well, and we even suggested that Redbox could crowdsource its movie purchasing.
In fact, to get around the studio blocks, Redbox was apparently already purchasing 40% of its DVDs at retail locations like Target and Wal-Mart. But both retailers are now making that more difficult. They've put in place limits directly targeted at Redbox, saying they won't sell more than five DVDs at any one time to any buyer. Yes, here we have a customer willing to buy an awful lot of product -- at full retail price -- and these retailers won't let them? While they claim it's to make sure movies are available for other customers, given the earlier reports of studios specifically asking retailers to block Redbox from buying, it makes you wonder. What sort of company would tell willing customers they can't buy a product that is available and in stock?
Still, in the end I doubt those limits will be very effective. Redbox still could go with that crowdsourced concept, and get its subscribers to purchase five DVDs at a time in exchange for free rentals. Eventually, the industry is going to have to realize that fighting Redbox is a mistake.
In fact, to get around the studio blocks, Redbox was apparently already purchasing 40% of its DVDs at retail locations like Target and Wal-Mart. But both retailers are now making that more difficult. They've put in place limits directly targeted at Redbox, saying they won't sell more than five DVDs at any one time to any buyer. Yes, here we have a customer willing to buy an awful lot of product -- at full retail price -- and these retailers won't let them? While they claim it's to make sure movies are available for other customers, given the earlier reports of studios specifically asking retailers to block Redbox from buying, it makes you wonder. What sort of company would tell willing customers they can't buy a product that is available and in stock?
Still, in the end I doubt those limits will be very effective. Redbox still could go with that crowdsourced concept, and get its subscribers to purchase five DVDs at a time in exchange for free rentals. Eventually, the industry is going to have to realize that fighting Redbox is a mistake.
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Restraint of Trade
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Glee
The thought of this mindlessly greedy industry - who has had things its own way for so long - waging a doomed battle against technological progress, fills me with joy.
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Loss Leader
Doesn't justify them litigating, but it does explain the action.
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there is a Redbox in Wal-Mart and Target! WTF?
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Really?
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Redbox vs. Walmart/Target now?
I guess the reason is that the other rental outfits like Blockbuster, Hollywood and such must be giving them a percentage of the rental charges, and that is why you end up paying $4,5,6, to 10 if blueray to rent the movies there.
So along comes redbox renting them at a dollar and whoa, we gotta start selling them now first before rentals to these guys. The reason, is because now we can't price fix the rentals and get a huge cut of the money, so we make it so that they can't rent them because now people will buy them leaving redbox out of the loop.
Just another show of corporate greed! Screw the customer, and make it so they have to take it or else! If anyone tries to offer anything reasonable, we gotta find a way to put them out of business and keep our huge profit margins running!!!
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Re: Loss Leader
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HAHAHA
Walk in. Buy 5 copies. Leave store.
Send wife in. She buys 5 copies. Leave store.
Repeat.
???
Profit!
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Re: Loss Leader
Wal-Mart and Target sell plastic discs that cost pennies to make for 25 bucks a piece at a loss. And now someone wants to pay them full retail prices and buy more of these plastic discs, so the obvious choice is to just not sell it to them.
Redbox has shown that there is a larger market for entertainment that can be met with increased convenience. So MPAA members, rather than taking any steps to realistically compete with that or taking any steps to embrace that and make money from it, let's just try and kill it. Brilliant.
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Re: HAHAHA
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Re: Re: HAHAHA
And if they track it to a credit card? Use cash.
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Re:
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Walmart pays roughly $13 per DVD (surprising yet true). On release mornings, we generally lower the price from $20 to $15 (thanks, Mike for doing your research by the way). Its not just Redbox, there are a TON of small rental businesses that come in and buy 10-20 copies at a time. When a store only gets 100-150 copies, and we get 3-4 people buying 20 DVDs at 8AM release morning, we only have a few dozen to sell to customers. I changed my availability to no longer include Tuesday just so I don't have to deal with the headache of customers complaining about us not having the new movies in stock.
Not necessarily defending Walmart, they do have shitty practices, just clearing up some "facts" from the article ;)
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Re: Loss Leader
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Re: Re: Re: HAHAHA
"at any one time to any buyer"
Once you complete the transaction, you have completed your customer experience. You don't even need to leave the store, just turn around, walk back, grab 5 more, and walk back to the register.
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Re: Re: Re: Re: HAHAHA
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uh, who still buys dvd's *BESIDES* redbox?
in time, the only customers left buying plastic disks will be the companies that rent them, this really isn't the time to be making enemies out of your primary buyers.
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Re:
A permanent sale limit smells of ulterior motives.
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i'm certain walmart knows this full well even at the corporate level. it's called market intelligence, and walmart lives and breathes such information.
very curious why they collapsed vs. the studios instead of turning to these idiots and saying "well, just give us more discs. we'll sell 'em all for you!"
after all, fighting market intelligence is the studios forte, not that of a successful retailer........
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That's Walmart's choice. No one's forcing them to do that.
When a store only gets 100-150 copies, and we get 3-4 people buying 20 DVDs at 8AM release morning, we only have a few dozen to sell to customers.
First, I would like to point out that those early morning shoppers are customers, too.
Second, if the stores aren't stocking enough to satisfy demand, maybe they should consider stocking more instead of limiting sales.
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Redbox Are Playing A Dangerous Game
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Spoken like a movie company idiot. ;)-
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Re:
That price fixing and driving alternative distribution forms that they can't control out of business is legal?
Do tell...
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Redbox Rocks!
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Re: Re: Loss Leader
1 A Customer knows that the cheapest place to get a DVD is at Wal-Mart, so they go there, and heck, they just fought traffic and parking to get there, mine as well pick up some toilet paper and a 5 gal jug of pickels!
2 A Customer walks in, see's the latest release far cheaper than they thought possible, and wonder what other great prices on DVD's they'd actually like to buy, they had back to the movie section and buy other movies that aren't as deeply discounted
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Restraint of trade.
Oh wait ... the people that work for the US DOJ are all ex RIAA members ... never mind
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This is a good read
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Re: Redbox Rocks!
"YES, MATT LAUER CAN SUCK IT"
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Re: Re: Loss Leader
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Indeed; they may just get inventive and take even more business from these shady outfits.
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