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.

Filed Under: , , ,
Companies: redbox, target, wal-mart

Rate this comment as insightful
Rate this comment as funny
You have rated this comment as insightful
You have rated this comment as funny
Flag this comment as abusive/trolling/spam
You have flagged this comment
The first word has already been claimed
The last word has already been claimed
Insightful Lightbulb icon Funny Laughing icon Abusive/trolling/spam Flag icon Insightful badge Lightbulb icon Funny badge Laughing icon Comments icon

Comments on “Wal-Mart, Target Trying To Block Redbox From Purchasing DVDs?”

Subscribe: RSS Leave a comment
vastrightwing (profile) says:

Restraint of Trade

Restraint of trade. Sounds an awful lot like the scenario the book publishers are pulling on Amazon. In one case, book publishers want Amazon not to sell ebooks for a price they want to. It makes no difference that Amazon is paying the wholesaler’s full price. In this instance, Walmart is being asked not to sell movies at their normal retail price to people who buy too many. Next up, manufacturers will be scouting eBay and asking eBay to allow people to sell their products below a certain price. What kind of free market is are headed for? Unbelieveble!

DS78 says:

Re: Loss Leader

I disagree. Our Wal-Mart sells new releases just cheaper than the local video store (certainly not at a loss). They also place the new release DVD display near the domestic goods entrance at the front of the store near the registers. That’s not typical product placement if you’re trying to bait customers to spend money in your store.

SDDREW says:

Re: Re: Loss Leader

Um…yeah, that’s how you promote something, by placing it right up in front of people walking in the door, and selling it for less than competitors! Loss leaders work to ways:
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

Derek Bredensteiner (profile) says:

Re: Loss Leader

Let me make sure I understand this situation.

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.

Jeff (profile) says:

Redbox vs. Walmart/Target now?

Pretty sad how the whole industry has changed and went in the opposite of what they used to do. At one time you had to wait to purchase a DVD/VHS of a movie. It seemed the movies ran in theaters first, then for rent months later, then after a few more months they went on sale. Now they want it so that you can buy it before you can rent.
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!!!

Anonymous Coward says:

I’ll preface this with my source: I’ve been an Electronics Associate for 4 years (late high school to mid college, currently)

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 😉

robin (profile) says:

Re: Re:

Its not just Redbox, there are a TON of small rental businesses that come in and buy 10-20 copies at a time…

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……..

Anonymous Coward says:

Re: Re:

On release mornings, we generally lower the price from $20 to $15

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.

Mr Big Content says:

Redbox Are Playing A Dangerous Game

These guys don’t know what they’re getting into. All we have to do is put proximity fuses into those DVDs, uniquely keyed to each SKU. Customers normally only buy one of each title, so they won’t be affected. But put say, 5 or 10 copies of the same title together on a shelf, they reach critical mass, and—BOOM!

Mike Masnick (profile) says:

Re: Re:

I know this is a longshot, but is it possible (mind you…possible)that movies companies are not the idiots people here invariably characterize them as being. Maybe the companies know something some of the commenters here do not.

That price fixing and driving alternative distribution forms that they can’t control out of business is legal?

Do tell…

Add Your Comment

Your email address will not be published. Required fields are marked *

Have a Techdirt Account? Sign in now. Want one? Register here

Comment Options:

Make this the or (get credits or sign in to see balance) what's this?

What's this?

Techdirt community members with Techdirt Credits can spotlight a comment as either the "First Word" or "Last Word" on a particular comment thread. Credits can be purchased at the Techdirt Insider Shop »

Follow Techdirt

Techdirt Daily Newsletter

Techdirt Deals
Techdirt Insider Discord
The latest chatter on the Techdirt Insider Discord channel...