Hollywood Again Tries To Stop Innovation: Threatening Redbox DVD Rentals
from the felony-interference-with-a-business-model dept
I have to admit that when I first heard about the whole Redbox concept of renting DVDs from a kiosk I was skeptical, but that was mainly because previous experiments had all been quite expensive with very limited selection. However, in actually offering super cheap prices ($1 rentals), I’ve been hearing from many Techdirt readers who swear that Redbox is fantastic and, at such a cheap price, often easier than downloading the movie.
So, wouldn’t you know it? Hollywood is trying to block Redbox from doing business.
The company has filed a lawsuit against Universal Studios for trying to coerce the company into signing a ridiculous, business-destroying agreement — and threatening to try to stop others from supplying Redbox movies if the company didn’t agree. Specifically, Universal wanted Redbox to agree to:
- wait 45 days after a DVD’s release date before renting it;
- pay a royalty of 40% of gross rental revenues;
- promise that prices never dip below $0.99 per night; and
- destroy all previously rented DVDs rather than offering them for purchase for $7, as Redbox currently does.
In other words, Universal Studios is basically trying to kill off Redbox, a company that has innovated in its business model, and, in doing so, effectively trying to circumvent the first sale doctrine by controlling how a copyrighted product can be resold. Universal threatened that if Redbox did not agree to these business-destroying clauses, it would stop supplying movies to any distributor who supplies Redbox. Effectively, that would mean that those distributors would stop supplying Redbox, rather than lose Universal as a supplier. This is, quite clearly, a case of corporate bullying. It’s also yet another example of how the movie studios want to stop any innovation in the industry that doesn’t come directly from the studios.
Filed Under: business models, dvd rentals, dvds, hollywood, innovation
Companies: redbox, universal
Comments on “Hollywood Again Tries To Stop Innovation: Threatening Redbox DVD Rentals”
Isn't this a straightforward contract issue
You would think the distributor would be the one that would be in hot water with Universal for breaching whatever pricing contract they have in place. If the distributor is “allowed” to sell their products to Redbox for pricing that allows them to rent at the rates they are, then I’m not sure what gripe Universal would have.
It seems this is a contract issue – either with the distributor or between the distributor and Redbox.
Unless Redbox buys direct…still a contract issue.
Weird.
Re: Isn't this a straightforward contract issue
Redbox’s prices are not low because they buy the movies cheaper. They are low because they are per-night rates rather than per-week rates, and they have extremely low overhead. The cost of maintaining a machine is far cheaper than that of maintaining a brick-and-mortar store plus employees. The price per day is actually more than Blockbuster, but since I generally only rent a movie if I am going to watch it that night, the price is much lower per rental for me, and many others.
That's it!
I’m getting ALL my rentals from Redbox from now on.
Re: That's it!
Yeah? I’m downloading all mine from now on. Oh wait..
They don't get it....
The average person can rent a movie, use one of the many softwares out there to burn it to their portable hard drive and share it with who ever they want. If they keep making renting harder, and more expensive, this will become more and more popular.
ah, let em kill it off
If they kill it off, we’ll just go back to pirating. Let that be a lesson to Hollyturd: play nice, or get the hell out of the business.
In fact, they should embrace redbox, since it’s really the only company to compete with netflix right now.
Re: ah, let em kill it off
I pretty much agree with this. I don’t buy movies because I only watch them once, and am not a fan of Netflix because I’m very much an impulse watcher- watch one movie a month sometimes and watch a movie nightly some months. Redbox afford me the flexibility to watch movies on my terms at a reasonable price with a decent selection. I won’t be pirating, but without redbox, the movie industry also won’t be getting my money.
Use it and love it
I never thought that I’d use a kiosk machine either, but my grocery store has one strategically located right after the checkout. I end up using it fairly frequently as it’s an impulse decision. I rent movies I would never go to the to video store to rent.
I wonder what it would do to redbox’s bottom line/business model if they bought the movies at Wal-mart instead of buying them wholesale from a distributor. I also wonder in Universal would be stupid enough to cut their own throat by refusing to sell to Wal-mart to prevent Redbox from acquiring the movies.
Re: Re:
I just question the smarts of challenging a company that was funded with McDonald’s money and who still own nearly half of Redbox(according to Wikipedia). Pissing off McDonalds could bring the wrath of Ronald down on Universal.
Re: Re:
Actually, buying from Wal*Mart or CostCo really wouldn’t impact the Redbox bottom line – but price is NOT the major issue.
What’s really at issue is WHEN Redbox would get the DVDs so that they could get them out to their “stores” (ie kiosks) in the field.
It’s a completely ridiculous position taken by Uni, since a kiosk = store. If any retailer wants to rent a movie at a low price and lose money – that’s their business. Uni can’t stop that unless they can prove it’s causing them financial harm (which this is certainly NOT doing).
Going to a Redbox machine and rent a movie is a flawed business model anyway, Having movies delivered to a home via mail or internet is the best way. Redbox has no future in my opinion
Re: Erv Server
Erv Server – really?
I can drive up to the corner and pick up a movie a lot faster than waiting for home delivery or even Internet download.
Re: Re:
Often renting movies is an impulsive decision and Red Box is very very useful then.
Also very suitable for people who dont watch 10s of movies a month (to get full worth of money need to watch at least 20 movies/month)
Re: Re:
You completely underestimate the power of instant gratification.
Re: Erv Server
The two are not mutually exclusive. One can actually have a netflix account AND grab a dvd from redbox.
I know this is possible, because my parents do it all the time.
Re: Re:
It’s not flawed, it’s convenient. I pass 25 redboxes on the way home from work. I want to see a movie today, I reserve it online, stop by on my way home, watch it and return it to any one of 25 locations the next morning. I don’t have to wait 2-3 business days once the movie is available in my queue to see a film, and it’s faster than going to the video store.
And if I only rent 3 times per month, why would I pay $15 per month to get my movie when Netflix wants to send it to me?
I love using this for business trips. I can pick up a film on the way to the airport and drop it off when I land as most McDonalds have Redboxes and McDs are everywhere.
On a side note, video stores should replace their huge retail spaces with 10 kiosks and a CSR or two to help people check out movies. The one drawback to RB is not knowing which kiosk has my reserved movie when I go to a location with more than one.
Re: Re:
have you seen the lines for Redbox on any given night in a busy supermarket like Stop & Shop?
go take a look and come back here and let me know what you found.
Re: Re: Re:
It tells me that the Studios are losing a ton of sales due to Predatory Pricing.
Plus, do you think that the Studios are happy with all the freebies anyone can get for simply existing. You don’t have to earn these freebies.
Re: Redbox
Redbox now has Blu-ray films for $1/nite.
Comcast charges 6 bucks for the same movie. Actually, not even the same movie, because Comcast’s on-demand hi-def offerings are only 1080i, not 1080p. Comcast doesn’t have blu-ray quality films. God knows when they ever will. They’re a monopoly, after all.
Comcast can go to hell.
Q: are they hiring? ...where in NYC?
if not for the fuss, I might never have heard of REDBOX…
…thank you UNIVERSAL
Q: is REDBOX hiring?
Q: where is there a REDBOX kiosk in NYC?
Re: Q: are they hiring? ...where in NYC?
Can’t answer first one.
For second question check out redbox.com
Re: Re: Q: are they hiring? ...where in NYC?
They are hiring. I saw an ad yesterday on a coding site.They are based in Evanston, IL.
Original Article
“Yet for all of Hollywood’s famous elan for whipping up interest in its movies through hype and hoo-hah, the studios paradoxically have always exhibited a peculiar loathing of real consumer demand. Can anyone imagine GM or Ford telling Avis to stop buying their cars and renting them because too many people are renting them? “
Thats a great analogy, sorry, this car has been rented 3 times this month and thus we are out of cars.
http://www.contentagenda.com/blog/1500000150/post/970035097.html?nid=3041
Re: Original Article
i like that analogy. lol
Howard_NYC
Go to their website and you can search by your address. But it looks like your closest locations are all in Jersey or Long Island.
I live in the Houston area and we were part of the initial Redbox pilot, I gave up Netflix when they came to town. They have 5 kiosks in my little town (10 sq. miles). Their website is great too, pull up the movie you want and it will show you the nearest location that has it, and you can even reserve it online.
# promise that prices never dip below $0.99 per night;
Isn’t that considered ‘price fixing’?
What if Ford told BP they couldn’t drop gasoline under $3.00 a gallon when they release a 75 MPG car…? Wouldn’t that be a serious issue?
“Price fixing requires a conspiracy between two or more sellers; the purpose is to coordinate pricing for mutual benefit at the expense of buyers.”
There is always a line at my Redbox
Kind of funny
Right as I was reading this article, “Why Don’t You Get a Job” by Offspring was playing.
“I wont pay, I wont pay ya, no way hey hey hey
na na why don’t you get a job”
It was quite amusing.
dear universal
Dear Universal,
Really, 40% of our profits? Get bent.
Sincerely,
Redbox
–
but seriously… the point of having the distributor be walmart (assuming walmart could be a distributor, or even if the dvds were purchased retail) is very interesting, and might be just what’s needed.
Re: dear universal
It’s not even 40% of profits. It’s 40% of gross rental revenues – meaning before any expenses. So right off the top Universal wants 40% of the rental fees.
DL is the best!
Downloading is the future people. There is no more efficient or greener solution. You might have to wait a bit, but I usually get 5-10 movies/day. On a very good day (24hrs) 15+. You get movies that are not yet released in the US market, you get reviews, you get to know who has the better DLs.
The other advantage is that they are digital. You can now format you external hard drive into as many Fat32 partitions it will allow, and plug the drive into a dvd player that is Divx compliant with a USB media port, Philips is my choice for $57 @ Walmart, viola you have yourself a MoviePod (new word).
I have 3 external Moviepods loaded with avi files and have fast access to 500+ movies at a time. When I get tired of the selection I replace with new DLs.
Why would one limit themselves to a stupid piece of plastic, is beyond me. DVDs are going away. Hard drive players are going to be the future.
PS: I use Redbox to get a list of DLs I want, that’s about all it is good for.
Re: DL is the best!
Downloading is the future, eh?
For pay? Or TPB? 😉
How many thousands of $$ and jail time are you going to get if the MPAA comes after you? lol
BTW, DVD’s are digital too. It’s just a different medium.
Re: DL is the best!
500+ movies? When was the last time you saw the sun?
Re: Re: DL is the best!
“500+ movies? When was the last time you saw the sun?”
They DL themselves you moron, you don’t have to watch. 500 is nothing, were talking in the 1000’s.
500 is for beginners.
Re: DL is the best!
maybe you can explain that to a 40-something year old mother with two kids in tow who isn’t computer saavy?
Most people don’t want to go through the bother of learning bittorrents and DD’s (as easy as they are). They want to see the movie art work, a description and something tangible in their hands.
There’s a HUGE opportunity right now to do business with that kind of demographic.
They should just change distributors and have everyone sign a non-disclosure agreement which would include the fact that Redbox is a customer.
If universal couldn’t figure out how they were getting their DVD’s, they couldn’t do anything.
That would be amazing.
Re: Re:
If universal couldn’t figure out how they were getting their DVD’s, they couldn’t do anything.
Every dvd commercially pressed has a UID on its spine. All universal would have to do is rent a dvd from a redbox and lookup who they sold the disc to.
Re: Re: Re:
All that would tell them is who they sold the disc to. It could have changed hands several more times before Redbox got it.
I bet that, if you dug deeper, you’d see Netflix and Blockbuster involved, too… they lose sales to Redbox.
The Hollywood studios are run by money-grubbing morons.
I bet that, if you dug deeper, you’d see Netflix and Blockbuster involved, too… they lose sales to Redbox.
The Hollywood studios are run by money-grubbing morons.
Yeah, it seems to be a pretty clear violation of the Anti-Trust Act
Where I am from, Blockbuster gives you the option of renting movies and games for 99 cents a day or $5 for 10 days max. Given that they have a huge selection, that’s where I rent my flix from.
Re: Re:
I think the point is that they seem to be singling out Redbox for some reaxon… like pressure from Blockbuster. VERY illegal.
Racketeer Influenced and Corrupt Organizations Act
I can’t wait until the day when Universal outsources it’s legal operations to India so the business can properly leverage lower cost, less political, and higher quality business models that would ultimately come forth from said efforts.
Go ahead, commit a few more bribery crimes. It takes only 27 federal crimes and 8 state crimes—within a 10-year period to be charged with racketeering.
We’re watching you!
Hugs and Kisses,
The Internet
Re: Racketeer Influenced and Corrupt Organizations Act
Haha! My first thought was a Racketeering Achievement!
Re: Racketeer Influenced and Corrupt Organizations Act
Won’t happen. The legal industry in the US has laws protecting it from such global competition (unlike many other workers).
redbox is a good thing.
There’s plenty of demand for redbox. There’s always a line at my local grocery store which has two kiosks. I don’t watch enough movies to justify netflix. Downloads or streaming are great but not everyone can get broadband and/or have the equipment to stream to the tv.
Go Here and Voice your Disgust
Here is the website for posting comments to Universal:
http://www.universalstudios.com/contact_form.php?email_id=10
Flood their greedy inbox with messages voicing your disgust for their strongarm tactics!
Stop bashing businesses every chance you get
I realize you are trying to be popular and appeal to the masses. But, you seem to bash every business as being greedy and stupid.
Why do you say, “..another example of how the movie studios want to stop any innovation in the industry that doesn’t come directly from the studios.”? This is obviously flamebait because it’s an irrational statement. You know that the movie studios are not trying to stop innovation, they are trying to stop a competitor from SEVERLY undercutting their prices with their own merchandise.
I know you didn’t bring this up, but I will because I have seen enough articles on this site to know about your affinity to free downloads. I hope for my sake (and the majority of media consumers) that the day never comes that movies are legally available for free on the internet because when that day comes production values will go down the toilet and everything will start to look like YOUTUBE (unknown actors, crap special effects, low production quality) and sound like it was recorded on a cassette recorder.
Movie stuidos and record labels are BUSINESSES which hire creative types to create CONTENT from which the studio/label make MONEY for their INVESTORS. Lets make this simple: NO MONEY = NO INVESTORS = NO CONTENT.
You might be one of those liberals who watch independent films and listen to trance/techno/house, but the majority of us aren’t. I hate cheaply made movies, I like the blockbuster action films. I hate live recordings of concerts and “garage” tracks, I LIKE the production quality of studio recordings.
Re: Stop bashing businesses every chance you get
Don’t bother. They all drank the kool-aid.
Re: Stop bashing businesses every chance you get
Way to miss the points raised, chump. We’re talking about a legitimate, *non-free* business that pays plenty of money to the content producers (or at least the studios).
Here’s the deal: the content is created. Redbox offer an unusual but *legal* way to get content distributed that favours the customer. Universal don’t like that so try to impose unworkable restrictions that would kill Redbox’s business.
How is that a good move? Mike’s articles are not anti-business, they’re anti-dumb. Redbox is offering a valuable service that the studios apparently don’t understand, so they try to control it. These control attempts are actually harming the industry, as those people whose needs would be met by Redbox might decide to pirate or wait for the TV screening rather than use another way of paying for movies.
What you, and the studios, are missing is that people want movies in a convenient way, and that’s something that Redbox offers. it’s not for everyone, but fills a niche need that Netflix, Blockbuster, HBO, theaters, etc. do not. Please explain to me how offering a wider range of service is bad for the industry.
People like you remind me of Jack Valenti when he was convinced that home video was going to kill the movie industry. Once they stopped fighting it and worked out how to profit from it, the movie industry earned more than they did from the original theatrical business.
Please explain to me how your rant addresses the real world issues? You can start by explaining how “liberals” who watch independent movies are a bad thing (aren’t they also made by businesses and investors who need to make a profit?) and why a person’s musical choice can be a bad thing for business (ever heard of independent rock?).
Re: Re: Stop bashing businesses every chance you get
Another liberal activist comes to Mike’s defense. First, the petty points as they are easily argued. The musical genres mentioned in my post were not about taste but chosen because they generally feature a great deal of electronic synth and are therefor more digital in nature and less prone to mastering problems which typically require studio techinicians.
Secondly, I am not attacking Redbox. I think they are providing a decent service at an unbelievable price. I don’t think they can sustain that price level but I have no problem with their business. What I do have a problem with is the positions Mike continually takes. Mike’s articles always praise the people who give away their content for free like Radiohead, NIN, etc.., and he always attacks every defensive move by the business end of the industry. The most interesting thing about this post in particular was the fact that he admits that he was initially against Redbox. And now that Redbox has pissed off the studios he’s championing them, coincidence? I think not! That reflects Mike’s hatred of business interests and IP rights in general.
I would love to see articles from Mike griping about how TPB is taking money away from artists (and a real world dollar figure could be determined), but you don’t see them, do you?
I would love to see articles from Mike about how many artists aren’t able to get promotional deals with record companies because of the dwindling sales.
I would love to see articles from Mike about the losses incurred to the industry due to piracy. If you want to gripe about the numbers provided by the industry, do research and provide better numbers. Don’t just say that their numbers are gross exaggerations. Give me a number or don’t complain about the numbers at all.
Re: Re: Re: Stop bashing businesses every chance you get
Foreword: I am about as conservative as they come, yet I agree with almost everything Mike brings up. Am I now some ‘liberal activist,’ Anonymous?
…and he always attacks every defensive move by the business end of the industry.
This is simply because the defense of the business end is to undermine those that are helping to promote and or profit from the business. It is called competition, consumer choice, free trade, and many other terms. Letting the business end, as you call it, make all the decisions about how their product should be used and/or sold after the initial trade will only lead to astronomical prices and poor quality.
I would love to see articles from Mike griping about how TPB is taking money away from artists (and a real world dollar figure could be determined), but you don’t see them, do you?
You don’t see the dollar values for this simply because there is absolutely no concrete evidence to support the theory that any number of illegal downloads results in a lost sale. I have posted many times around here that I have downloaded and then purchased the product I downloaded. This completely negates any proposition that illegal downloading equates to lost sales.
A more truthful statement would be that the lack of competent leadership in a company equates to a loss of sales as the view of a consumer is depicted as ignorant of business practices.
Please do a little research before claiming people fit into these small boxes you have set aside such as ‘liberal activists.’ The issue is with Big Business trying to strong arm start-up competitors into playing by Big Business’s antiquated rules.
Re: Re: Re: Stop bashing businesses every chance you get
Hmmm…
“Another liberal activist comes to Mike’s defense.”
So pointing out that trying to extort a distributor is a pretty dumb business move is being a “liberal activist now”? Right….
“The musical genres mentioned in my post were not about taste but chosen because they generally feature a great deal of electronic synth and are therefor more digital in nature and less prone to mastering problems which typically require studio techinicians.”
…and this has what to do with a discussion on a DVD business model, exactly?
“Mike’s articles always praise the people who give away their content for free like Radiohead, NIN, etc.., and he always attacks every defensive move by the business end of the industry.”
Again, nothing to do with the issue at hand. Redbox has found a way to distribute content in a way that’s successful, and which involves a exchange of money – nothing to do with the music industry or “free” business model discussions.
For whatever reason, Universal have tried to force Redbox to agree to some very one-sided terms, which if accepted would kill their business model. The article is criticising Universal’s moves, and pointing out that it’s exactly this kind of move that’s stopping new business models from being explored. Models that can be very successful, even if the industry initially opposes it (such as home video). This is the kind of model that Universal should be supporting (it’s legal and encourages people not to pirate), but instead they’re trying to extort it into the ground (hence losing profits in the long run).
Do you either have a problem with my interpretation of the facts, or something to add to this discussion? Please, try using facts and/or genuine opinions related to this particular issue, not trashing of other articles here or the perceived musical tastes/political leaning of other posters.
“I would love to see articles from Mike griping about how TPB is taking money away from artists (and a real world dollar figure could be determined), but you don’t see them, do you?”
OK; I’ll bite on a few of the music questions since they needs to be debunked.
No, you don’t see them because he’s tending to think beyond that. I don’t agree with everything he says, but most of Mike’s articles in that area are saying this: “Piracy is here to stay, and every attempt by the labels to fight it has either failed or miserably backfired. However, there are other business models available that do not depend on selling CDs and are therefore not as vulnerable to losses through piracy.”
Again, do you have something to refute in that statement? Bear in mind that most articles on the subject are looking at real, largely successful business models that don’t necessarily remove the need for a record label and/or studio professionals, just the need for the current RIAA model (which if you think is artist friendly, I have a large bridge to sell you).
“do research and provide better numbers. Don’t just say that their numbers are gross exaggerations. Give me a number or don’t complain about the numbers at all.”
Well there’s the problem. It is absolutely impossible to obtain a real figure. Any figure needs to make assumptions about how many people would have bought a real copy if pirate copies weren’t available, the prices they would have sold for, how much additional merchandise would have been sold, how much merchandise and CDs are eventually bought by those who initially pirate but end up with legit copies, how many of those are bought new vs. second hand, etc…
It is utterly impossible to get accurate figures on those aspects, so any attempt to do so is flawed. That doesn’t mean that criticism of current claims are in any way invalid. It’s OK to point out that the industry is lying to us, even if we can’t prove the exact extent to which they’re doing so. Especially when said bogus figures are used to try to implement new laws, lawsuits and restrictions that can actually harm rather than help the industry.
(Sorry for the wall ‘o’ text, everyone)
Re: Re: Re:2 Stop bashing businesses every chance you get
(Sorry for the wall ‘o’ text, everyone)
You wrote a well formed lengthy post, not a wall o text. No need to apologize.
(Wall of Text = lengthy post rendered unreadable due to blatant disregard for even the most basic fundamentals of grammar. ie; not using line breaks, runon sentences and incoherent thoughts jumbled into one huge paragraph)
Re: Re: Re:3 Stop bashing businesses every chance you get
Hey, thanks. I always get a little worried when I preview a post and it fills the whole screen 🙂 Glad to see it was appreciated!
Re: Stop bashing businesses every chance you get
I hate live recordings of concerts and “garage” tracks, I LIKE the production quality of studio recordings.
Quite lost, please consider reading
http://techdirt.com/article.php?sid=20080228/175453383#c331
The problem is US Quality sucks.
Thank you.
Re: Stop bashing businesses every chance you get
Wow. You apparently haven’t seen enough articles on this site to have read the recurring mantra “‘Free’ and/or ‘Open-source’ are business models and can, and do, make money.”
If these types of business models weren’t effective, big consortia and corporations wouldn’t have anything to be threatened by, would they? I’ll say that again, just to make sure you understand the flaw in your main premise: if the quality of the alternative (free or cheap) is so atrocious, they aren’t anything to worry about.
(And it’s cute how you equate this all to “liberals” who are apparently in the vast minority.)
Re: Re: Stop bashing businesses every chance you get
Wow. You apparently haven’t seen enough articles on this site to have read the recurring mantra “‘Free’ and/or ‘Open-source’ are business models and can, and do, make money.”
Actually the mantra is “free (or open source) is not a business model, but they can be part of one.” He actually wrote a post with almost that exact title a few days ago.
(And it’s cute how you equate this all to “liberals” who are apparently in the vast minority.)
I’ve always wondered about this, what is a vast minority? 49.999999999%? (vast means huge) 😉
Re: Stop bashing businesses every chance you get
they are trying to stop a competitor from SEVERLY undercutting their prices with their own merchandise.
And since they obviously don’t want to change their own methods, they’re stomping on the innovation of another company.
when that day comes production values will go down the toilet and everything will start to look like YOUTUBE (unknown actors, crap special effects, low production quality) and sound like it was recorded on a cassette recorder.
Unsubstantiated conjecture, unless you have some way of backing this statement up beyond your flawed logic.
Lets make this simple: NO MONEY = NO INVESTORS = NO CONTENT
You apparently don’t bother to actually comprehend the articles you claim to have read. Otherwise, you would understand that your little equation doesn’t conflict with the articles on the site.
You seem to be unable to realize that there’s money to be made even if the content is given away.
You might be one of those liberals who watch independent films and listen to trance/techno/house, but the majority of us aren’t.
One of the key indicators that a person hasn’t put the necessary amount of time into forming their argument is when they start ranting about “liberals” and blaming all the problems in the world on them.
I hate cheaply made movies, I like the blockbuster action films.
Style over substance. Not a big surprise, given your post.
The fact of the matter is that the DVD boom is over, yet the movie studios are trying to maintain the same level of profits. One of the ways they’re attempting to do this is by trying to get a cut from anything that touches their business. In the case of Redbox, they can’t, so they’re trying to use their market position to blackmail the company. They’re attempting to stop an innovative company because they can’t get a cut of their profits legitimately.
Re: Stop bashing businesses every chance you get
>I realize you are trying to be popular and appeal to the
>masses. But, you seem to bash every business as being greedy >and stupid.
But Greedy and Stupid pretty much sum up their lawsuit.
>This is obviously flamebait because it’s an irrational
>statement. You know that the movie studios are not trying to
>stop innovation, they are trying to stop a competitor from
>SEVERLY undercutting their prices with their own merchandise.
And your post isn’t Flamebait?
Let me ask you this. At the core level, what is the difference between Blockbuster, Netflix and Redbox? Nothing! All three rent DVDs to customers — for roughly the same price in fact. Redbox just uses a different business model than the other two. In fact, as Redbox and DVDPlay grow, Blockbuster is pretty much toast.
> Lets make this simple: NO MONEY = NO INVESTORS = NO
> CONTENT.
Should Universal be suing Netflix, Blockbuster and other rental place? Flea markets? Ebay?
Do you not realize that REDBOX PAYS FOR THEIR DVDS AND THAT IS HOW THEY (Universal) MAKE MONEY??? Do you think Redbox is getting their DVDs for free? My god, some people are so eager to argue something they don’t even think it through.
>You might be one of those liberals who watch independent
>films and listen to trance/techno/house, but the majority >of us aren’t
And this just shows your post is flamebait. Being a liberal has nothing to do with what movies you like.
Re: Stop bashing businesses every chance you get
Your screen name (well, the last part of it) is appropriate… is it too much to ask even you to realize that nobody is saying that Universal is big bad business? If Redbox buys their DVDs just like Netflix and Blockbuster, Universal makes the SAME PROFIT… THE SAME PROFIT. So, why pick on Redbox? Universal doesn’t make, as far as I know. a percentage of Netflix’s or Blockbuster’s rental fees. So how can Universal dictate what Redbox can charge for rentals? It’s as ludicrous as the record labels telling Apple they wanted to charge more than 99 cents a track on iTunes. That’s what leads me to believe in the conspiratorial nature of this. Regardless of where Redbox gets their DVDs from, or when they start renting them, or what they charge for an overnight rental DOESN’T AFFECT UNIVERSAL’S PROFIT. Even if it did, it’s illegal to threaten to cut off your supply chain if you don’t agree to some draconian rules… it’s tantamount to blackmail.
Most of your posts defend the big businesses… you must be a Republican.
Re: Re: Stop bashing businesses every chance you get
As I said earlier, I was not attacking Redbox only pointing out that Mike’s posts are always “left-of-center” (i.e., liberal) you know take from the rich give to the poor. And his posts are predominately anti-business.
I only explained the actions of Universal I did not condone nor codemn them. My problem was not with the article but Mike’s continual choice of articles which are obiviously liberal and anti-business.
I am an independent, and vote on the issues not party affiliation. I think of myself as a centrist (moderate) who leans SLIGHTLY to the right. If your positions on issues are so far to the left that you think I am a Republican your perspective is obviously skewed.
Re: Re: Re: Stop bashing businesses every chance you get
As I said earlier, I was not attacking Redbox only pointing out that Mike’s posts are always “left-of-center” (i.e., liberal) you know take from the rich give to the poor. And his posts are predominately anti-business.
Could you please support a SINGLE statement here. How are my posts “left of center”? When have I EVER suggested that you “take from the rich and give to the poor”? When have I ever posted something that is anti-business.
Not a single one of those things is true.
I am an independent, and vote on the issues not party affiliation. I think of myself as a centrist (moderate) who leans SLIGHTLY to the right. If your positions on issues are so far to the left that you think I am a Republican your perspective is obviously skewed
I am neither a liberal nor a conservative. I consider myself an unaffiliated realist. I am only concerned with what makes the most sense for business to expand the overall economic pie.
How that’s considered anti-business, I have no idea. For you to claim that someone else’s views are skewed for considering you to be a Republican, then I have to say that your calibration meter is WAAAAAAAAAY off in calling me a liberal who is anti-business.
Re: Re: Re: Stop bashing businesses every chance you get
Like I said earlier they all have drunk the kool-aid. Don’t bother.
Re: Re: Re:2 Stop bashing businesses every chance you get
Like I said earlier they all have drunk the kool-aid. Don’t bother.
Funny. Drinking the Kool-Aid would suggest ideas based not on reason. I read above and I see numerous people laying out in a systematic and logical manner the fallacies suggested by the original comment.
If it’s a “kool-aid” issue, then why not prove us wrong?
Use logic. Your inability to do so and your writing all of the responses off as “kool-aid” drinkers merely confirms that you are UNABLE to respond in a logical manner.
I would suggest that’s more a sign of a kool aid drinker.
Re: Re: Re:3 Stop bashing businesses every chance you get
Mike,
“Drinking The Koolaid” was a comment used once by an ED I worked for.
Their use provided a few things-
1.) That we were in an informal environment.
2.) That was discussed during that meeting didn’t need to go beyond us.
3.) That we were on to something big.
4.) Let’s do it.
5.) How do we do it?
So maybe think about people’s use of Kool-Aid. Maybe they could be willing to sponsor a Floor64 case?
Re: Re: Re: Stop bashing businesses every chance you get
As I said earlier, I was not attacking Redbox only pointing out that Mike’s posts are always “left-of-center” (i.e., liberal) you know take from the rich give to the poor. And his posts are predominately anti-business.
I only explained the actions of Universal I did not condone nor codemn them. My problem was not with the article but Mike’s continual choice of articles which are obiviously liberal and anti-business.
I am an independent, and vote on the issues not party affiliation. I think of myself as a centrist (moderate) who leans SLIGHTLY to the right. If your positions on issues are so far to the left that you think I am a Republican your perspective is obviously skewed.
ALL ABOARD THE BACKPEDAL EXPRESS!
Like I said earlier they all have drunk the kool-aid. Don’t bother.
can you use a cliche that isn’t 10+ years old next time? It’ll have more impact.
Re: Stop bashing businesses every chance you get
I realize you are trying to be popular and appeal to the masses.
Actually, I’ve never tried to be popular or appeal to any masses. If I did that, I’d certainly take very different opinions. I state my mind and I back it up with evidence. It’s quite a good way to live.
But, you seem to bash every business as being greedy and stupid.
I have to say I’m confused as to how you can say this. I am not bashing businesses as being greedy at all. In fact, I’m a strong believer that businesses should try to make as much money as they can. I just think that, for a variety of reasons, they’re going about it the wrong way.
So I’m never bashing businesses for being greedy. I’m bashing them for using the wrong plan to maximize profits.
Why do you say, “..another example of how the movie studios want to stop any innovation in the industry that doesn’t come directly from the studios.”? This is obviously flamebait because it’s an irrational statement.
It’s not irrational at all if you look at their actions.
You know that the movie studios are not trying to stop innovation, they are trying to stop a competitor from SEVERLY undercutting their prices with their own merchandise.
Redbox and Universal do not compete, so no, this is not true. I’m sorry, but did you actually read what we wrote?
Universal isn’t trying to stop a competitor, they’re trying to exert control over the supply chain. That’s generally considered illegal. Plus, it’s actually bad for business if they really understood the market.
Again, that’s not bashing Universal for being greedy — it’s bashing them for taking a short-term view on profits over a long-term view.
I know you didn’t bring this up, but I will because I have seen enough articles on this site to know about your affinity to free downloads.
Really? I do not have “an affinity to free downloads.” I have simply pointed out why it’s a GOOD BUSINESS PRACTICE that can help someone MAKE MORE MONEY. I don’t see how that’s bashing someone for being greedy. I think it’s the opposite.
But as for “free downloads,” I think it’s one part of a reasonable business strategy that shows an understasnding of the marketplace. I have no emotional attachment either way to the concept, and I don’t, personally, download content for the most part.
I hope for my sake (and the majority of media consumers) that the day never comes that movies are legally available for free on the internet because when that day comes production values will go down the toilet and everything will start to look like YOUTUBE (unknown actors, crap special effects, low production quality) and sound like it was recorded on a cassette recorder.
That’s based on a rather weird assumption: that the studios would make less money that way. There’s no evidence to support that whatsoever.
Right now, most TV shows are available legally for free on a thing we call “television” and I see production values that are a lot better than amateur videos. That would seem to disprove your whole argument, which was already suspect to begin with.
Movie stuidos and record labels are BUSINESSES which hire creative types to create CONTENT from which the studio/label make MONEY for their INVESTORS.
Indeed. And if they were smart, they’d be looking for ways to make even more money. Which is what we’re helping point out.
I’m not sure where you get confused, but I’m guessing that your brain stops working at the “free” part. As we’ve pointed out, we’re not talking about just giving away stuff for free. We’re talking about making use of a business model where you give away things for free IN ORDER TO MAKE MORE MONEY.
Lets make this simple: NO MONEY = NO INVESTORS = NO CONTENT.
The logical flaw in your reasoning, again, is this idea that there’s no money. No one’s talking about n money.
You might be one of those liberals who watch independent films and listen to trance/techno/house
Huh? You’re wrong on pretty much all three accounts. I am not a liberal (nor am I a conservative for that matter). I’m just looking at what’s best for the market. And I’m curious what’s so “liberal” about suggesting that the free market be allowed to operate such that competition can create the best, most efficient market outcome.
I don’t mind indie films, but I like big budget films as well. And, frankly, I can’t stand trance/techno/house music.
So, not only do you read what I’ve written incorrectly, you’re pretty bad at your basic assumptions as well. You’re batting close to .000 here. Want to keep going?
I hate cheaply made movies
I don’t judge movies based on how much they cost to make. I judge them on quality.
I like the blockbuster action films
So do I. I’m not sure what that has to do with anything. Want to go see a movie this weekend? I’ll buy.
I hate live recordings of concerts and “garage” tracks, I LIKE the production quality of studio recordings.
Yeah, I’m with you on that as well. Again, not sure what that has to do with anything, other than highlighting how little you actually understand concerning what I’ve written.
To show such a drastic misunderstanding of what’s written, I’ll assume that the fault is mine in that I didn’t explain it clearly enough. I’ll try to explain it more clearly in the future, but in the meantime, I would suggest going back and actually reading what I’ve written, rather than jumping to ridiculously bad conclusions and making dreadfully wrong assumptions about my positions.
Re: Re: Stop bashing businesses every chance you get
Well put Mike… If you break things down, isn’t it better, even for Universal, if Redbox buys 45 copies of a popular new release for each of its 10,000+ machines than if each brick-and-mortar store buys 10 copies for the same number of stores? Again, being the conspiracy theorist, since Blockbuster has, evidently, entered into a revenue sharing agreement with several studios, which, obviously, reduces their profit, my guess is that they went to these studios and whined, possibly to the point of telling the studios they will buy fewer copies of their product if they don’t go after Redbox. Let’s face it… Redbox rents a VERY LIMITED selection of DVDs at $1 for one night vs. around $3+ for a video store. For that matter, Comcast charges $4,99 for that same On Demand movie for a 24 hour “rental” so maybe there, too, there is more than meets the eye (I had completely forgotten about how Comcast will go to any length to protect its cable profits). Comcast is limiting the amount of internet you can use each month (a “cap”) and has just announced that they will slow down the transfer rate for any heavy users (bandwidth throttling), so that pretty much limits how many movie downloads you can do or how much you can stream.
Nothing wrong with profit, but when you resort to shady, or possibly illegal, measures to bolster that profit, the people who suffer are the consumers.
Re: Stop bashing businesses every chance you get
These are the same businesses that fought the VCR. You know, the device that eventually created a multi-billion source of revenue for the movie companies.
Redbox is good for the impulse movies you want to watch, but when I’m looking for older movies, they just don’t carry them & it’s off to NetFlix
Netflix vs. Redbox
I actually use both… (Can’t keep the movies coming quickly enough at my household, apparently!)
And I have to just echo the sentiments of so many others on this thread already: if they (Redbox) shut down, we just wouldn’t rent. Mind you, I’m not saying that we wouldn’t watch movies — I’d just have a much larger private, digital, collection.
I hope they win their lawsuit.
Reading the PDF it’s over already 😀
They are Demanding A Jury Trial 😀
RedBox rules, before redbox I never rented movies but now its much more easy to use redbox than to even pirate movies which anyone can do but is it worth the time when you can pay $1, think about it.
Re: Re:
Exactly, Rog. Exactly. Which is what makes this such a boneheaded move by Universal. And (thanks, Iron Chef!), I told them so, too.
Re: Re: Re:
Oh geez. I’m blushing. Thanks for the kind words, Nate.
You know, there are multiple levels to Universal, and I have to admit I’ve gone on here saying Jeff Zucker is a sucker, and you know I wish I could redact those statements, but Techdirt has a no-delete policy.
I’m not mad, but have taken it in stride and so someday, maybe NBC will see someone is helping Kieth Olbermann get better ratings.. Not only here, but elsewhere.
Thanks!
The Legal Documents
Just finished reading the Redbox filing against Universal Studios Home Entertainment (USHE) plus the so-called “revenue sharing” agreement that USHE gave them all of 24 hours to sign. What a joke.
You see, back in 1997, Blockbuster negotiated with studios to get new releases on a revenue sharing basis:
http://findarticles.com/p/articles/mi_hb5057/is_199711/ai_n18412890
That, evidently, is how Blockbuster can get certain titles only available through them. Now, I think it’s OK when a rental company OFFERS to share its revenue in exchange for preferential treatment… but when a studio DEMANDS not only revenue sharing, but also an arrangement that puts one rental source, one which is inexpensive, at a distinct disadvantage to other rental sources, it smacks of conspiracy. USHE wants to, among other things, block Redbox from renting new releases for 45 days after release, provide USHE wih 40% of the rental cost, and destroy all pre-viewed movies so they cannot be resold. It’s ludicrous, and puts Redbox at a serious disadvantage.
Not only that, to threaten Redbox’s two distributors, Ingram and VPD, with, basically, the drying up of the supply of USHE titles is illegal interference in a business contract. It violates laws on both the state and federal level. If hat behavior was allowed, there would be pandemonium in the marketplace.
I still think that there is more to this than just USHE’s greed… the traditional brick-and-mortar video stores lose sales to Redbox, especially because they are all over the place (in the Chicago area, which is near Redbox’s HQ, you can usually find 5 or 6 machines in a 5 mile radius… in comparison, there is only one Blockbuster nearby).
Sounds like Universal is consulting with the RIAA
Hey folks, Michael here from Inside Redbox (if you haven’t been to the site, it’s at insideredbox dot com)…
These crazy media companies are always out to screw the consumers. They are well aware that their business models are failing and are just trying to figure out ways to keep the money flowing without changing their operations.
There is no way Universal can win this, they are just hoping for some kind of settlement. I truly hope Redbox doesn’t cave at all and offers them nothing.
If you want more details and commentary on the case (and others), check out the Inside Redbox blog.
The smalltown phenomenon
I live in a small Arkansas town. The one video rental store here is across town (10-15 minutes). Yet there are 3 Red Box locations, one of them just a few small town blocks away. Add to that our video store is packed full of incompetent teens working the counter. You can clearly see why ALL of my movies come from the Red Box. Go to redbox.com and rent online, then swing by and pick it up at your leisure.
Universal making special rules just for Redbox
That’s wrong. That’s just plain wrong.
Universal, don’t be evil. Live with the new idea and grow.
Revenue Sharing = Lease Who is the bad guy?
Say you want to lease a car. If you don’t like the lease, you buy it. The consumer does not have the ability to make up their own terms on the lease.
Same here.
The studios have every right to make up whatever deal they want when it comes to rev sharing. This same rev sharing deal is offered to all; BB, Netflix, Grocery and Mom and Pops. If you don’t like the terms, you buy them outright with all the protection of the First Sale Doctrine.
Seems as Netflix has signed a deal Studio Wide similar to the one Redbox said no to and sued. You can no longer buy Previously Viewed from Netflix.
I’m beginning to think that there will be a compromise and Redbox will sign something similar to Netflix’s Deal.
Ingram and Walmart can sell to Redbox outright. Universal couldn’t do anything about it.
Thus, no need for a lawsuit. I guarantee a lot of Video outlets wouldn’t sign any rev-sharing. Rev-sharing is like leasing and most of the time the lease is not in your favor.
So quit trying to throw Universal under the bus. ALL the Studios are waiting to see how this turns out. Universal wins and all the studios will follow suit.
Then Redbox could just Buy Outright and quit wasting court time.
All the comments about Poor Poor Redbox are laughable.
Redbox and it’s Umbrella are Bigger than Universal.
To the Pirates, If you think that the studios are going to keep making movies if they are all pirated; you are sadly mistaken. You will be watching all the dumb stuff on youtube.
To those that think that Movies parallel the Music Business; you are only partially correct.
Itunes and $0.99 downloads are no where near offsetting piracy. The music industry is a mess and losses millions/week. Movies cost exponentially more to produce than music. Musicians can go on tour to make up for lost profits are the Actors going to go on tour via plays to make up for lost revenues; I think not.
Movies cost exponentially more to produce than movies so it should be a very easy figure out that the price you pay for Itunes will not cut it with movies.
Innovation
This innovation term is being used a little too much.
Is this innovation?
Redbox has priced themselves 1/3 to 1/5 of their competition.
Redbox loses million of dollar a month to gain market share. In doing so millions have left traditional rental places with larger inventories. Netflix has even lost some subscribers. 1000’s of Video have been gone out of business because they cannot match the price for they would go bankrupt in under a year. In order to drive away even more stores Redbox tag teams with Walmart. Now Walmart wants in to these machines. Walmart is the Studios Biggest supplier by a long shot. Kind of conflict of interest for the biggest supplier to join the rental business.
Question. Do you still think what Redbox is doing as innovative? Sounds like they are playing the McDonald’s Monopoly game to me. Or at the very least Predatory Pricing.
Here is what got Redbox in trouble. They got in bed with the Studios biggest supplier and the Studios have every right to not be happy with that.
Want to blame someone. Blame Walmart.
To those that still want to blame Universal, blame all studios, they all feel the same way and will follow suit if Universal wins the lawsuit.
Ended up here after trying to reserve Mamma Mia online.
Was going to rent it, then see if my daughter liked it and then buy it
for her for Christmas.
I do this a lot, it is worth a buck to see if my kids like a movie enough
to purchase. Now I will NOT be buying it as it irks me that
Universal has removed my ability to “preview” before purchase.
Amazing
I think Redbox is wonderful I use it tons more than going into a movie rental place(which I dont do anymore). Once again greedy corporations stike. I will continue to rent at Redbox and if Universal does shut them down I and tons other will boycot Universal. Universal is just angry they didnt come up with the idea first!!