Redbox Won't Cave To Warner Bros. Demands; Will Buy WB DVDs From Other Sources And Rent Them

from the good-for-redbox dept

With all the talk of movie studios trying to create a new window between DVD releases for sales, and DVD releases for rentals, it’s sometimes forgotten that Redbox tried to fight this fight a few years ago… and ended up in a big legal battle with the studios, before caving and agreeing to delay rentals. However, it appears that the company may be ready to fight back again. Rather than accept an increased 56 day window with other annoying restrictions, Redbox is apparently telling Warner Bros. to take its dumb idea and to shove it, because it’ll just buy the DVDs from alternative sources:

However, after lengthy talks between WB and Redbox this month, the companies couldn’t come to an agreement over the new demands from the studio.

Instead, Redbox has opted to turn to “alternate means” to purchase the films on DVD and Blu-ray it makes available to rent for as low as $1.20 a night through its more than 28,000 kiosks — and offer them the same day they hit store shelves to buy, according to Redbox senior VP of marketing Gary Cohen.

This could get interesting, because the last time they had this fight, the studios sought to block companies like Walmart from selling to Redbox, and Walmart put in place some restrictions to make it harder for Redbox to do this. I still think Redbox could potentially crowdsource these purchases, and get around any restrictions.

Either way, it’s stories like this that show why the First Sale doctrine is so important. Redbox should be able to buy from alternative sources and then be free to rent those movies. And that’s the case due to “first sale” rights — even if Warner Brothers wants to pretend they don’t exist.

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Companies: netflix, redbox, warner bros.

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Comments on “Redbox Won't Cave To Warner Bros. Demands; Will Buy WB DVDs From Other Sources And Rent Them”

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82 Comments
ASTROBOI says:

Re: Re: Hmmm

What is nuts here is that this is a 180 turn for WB. Back in the VHS days they supported insane prices for the first weeks of a release. They termed them “rental-priced” tapes and they were often $100 or more. And this was back in the 1980’s. The idea was to support rental over direct purchase. Now the same company decides that direct purchase is better than rental.

Incidently, back then Disney tried the same thing with expensive “rental only” tapes and consumer versions stamped clearly “Not for Rental”. They refused to sell these to video stores. So the store owners simply bought them as individuals and rented them all the same. The experiment was soon ended.

Adam V says:

Re: Re: Re: Hmmm

There’s a slight difference there – the “rental only” versions of the tapes were created to be much more robust, and handled a much higher number of viewings before it would break down.

Granted, if you get 1/10th the viewings out of the consumer-grade copy, and it’s less than 1/10th the price, it’s still a better deal (unless you factor in the upset customers who get the screwed-up consumer copy at the tail end of its shelf life).

My wife tells the story of her consumer-grade copy of “Little Mermaid”, where she and her sister watched one scene so often that the tape eventually got screwed up and would automatically start to rewind when that scene was over.

Skeptical Cynic (profile) says:

I remember the fight

I said then that I would never do anything with Blockbuster again because they caved and paid the ransom to save their business (not). And I have not. I will never rent, buy or support in anyway Blockbuster.

I thought then that Redbox and another kiosk style service should have fought harder. But I also think now that there should be some kind of lawsuit against the cabal.

My thought is simple provide us with what we want or go away. Please just die!

Anonymous Coward says:

Re: Re:

simple. they tell Walmart that either they do this or they will jack up the rates, or do this and they will give them a break. When you buy a million plus copies of something a nickle either way is a big difference. Now Walmart could refuse but they get a lot of people who come in on DVD Tuesday to buy the new film for cheap and other things they need.

Simple economics my young effendi.

hobo says:

Re: Re: Re:2 Re:

Perhaps, but here it is a virtual monopoly (Walmart) versus a limited monopoly (WB). If Walmart wants WB videos at the wholesale rate, then they must do what WB wants.

In most cases if company A wants to sell floor cleaner or birdseed at Walmart, they are at the beck and call of Walmart because if they decline Walmart’s terms, companies B-Z will sell other products. There are no other distributors of WB videos.

I’m a little surprised that Walmart doesn’t have more pull with WB though.

Both are abominations.

Anonymous Coward says:

Re: Re:

They are not. There are various US laws that are against this restriction of trade. However, there are several ways to get around it.

Companies like Nintendo and Apple dictate the MSRP for stores like Best Buy, which is/was technically against the law. (I think this sort of changed recently, but I can’t remember the details.) So what these companies do is provide money for Marketing if the store keeps the product at the MSRP. So while Best Buy is free to sell a Wii for 1/2 off, they will lose out on money Nintendo would pay them for “marketing purposes”.

Anonymous Coward says:

It’s impossible for the studies to prevent you from buying something, any redbox employee can walk in a wal – mart and buy a few copies. The Wal-Mart or whatever store they choose won’t know that’ it’s a redbox employee, how would they?

I can understand if someone went into a Wal-Mart and bought 20 of the same movie at once, but there are easy ways around doing that while still purchasing the needed number of copies.

Anonymous Coward says:

Re: Re: Re:

Together, we must…

– Burn the village!

– Burn the village!

– And…

– Rape the horses!

And we must…

– Ride off on the women!

– Ride off on the women!

And…

– we plunder!

– Plunder!

– And…

– Prune.

– Prune the…

– Hedges.

– Hedges.

– Of many small villages.

– Of many small villages.

Who the hell are you?

Skeptical Cynic (profile) says:

Re: Re: Re: Re:

“Who the hell are you?” Who the hell are you? You are nothing because your voice is nothing more than a strange voice randomly expressed in a world of voices. Screaming for attention. None meaning anything as they are not people since they forget that we read a lot but hear only those that are real.

Anonymous Coward says:

Re: Re: Re:2 Re:

“Who the hell are you?” Who the hell are you? You are nothing because your voice is nothing more than a strange voice randomly expressed in a world of voices. Screaming for attention. None meaning anything as they are not people since they forget that we read a lot but hear only those that are real.

tttttwat
you make as much sense as my bad joke

As always. AC’s turn to physical attacks. Bash meaning stop. Most ACs’ want us all to experience pain. Physical pain. No accounting for reality.

says the hypocrit,

What exactly are you saying here, that everyone good or bad deserves a say, or only a select few,

physcical attack?????

AC or Registered, you take the bad with good
i for one think its refreshing that this site does’nt ask you to register, just to write a bloody comment, like every other fucking site out there,

my bad for not making it clear that it was a joke from three amigos, and at the same time, piss of with your little hissy fit
get your almighty head out your almighty ass

Anonymous Coward says:

Re: Re:

Well, here is the rub though:

Every time an artist wins a ruling against a record label that sales of digital materials are a license and not a “sale”, it creates more support for the idea that it is only a license, which is not resalable. That is to say that any physical product could be resold, but the rights inherent in it are not.

It’s when you start to put their pieces together that you can understand that you cannot have it both ways. If digital sales are a license (yeah for the artist make more money screw the man!), then it makes it easier for those same labels to negate your first sale “rights”.

Which would you prefer?

Anonymous Coward says:

Re: Re: Re:

Every time an artist wins a ruling against a record label that sales of digital materials are a license and not a “sale”, it creates more support for the idea that it is only a license, which is not resalable.

Completely correct, but this is only a limited-time issue. i.e. there are no new artists who get more money for licenses vs retail sales (the labels have seen fit to nip that in the bud with new contracts), so these types of cases will dwindle as time goes on.

Hopefully there will be few enough of them that it won’t do any lasting damage to First Sale.

Gwiz (profile) says:

Re: Re: Re:

Which would you prefer?

I prefer the First Sale doctrine be maintained. At the very least for physical products like CD’s and DVD’s and software disks. I understand it gets a bit trickier when it’s a sole digital product like a MP3 download and I can understand to a degree why licensing is important there.

Secondary markets increase the value of the primary market. Think about it this way: Would you spend as much on a car if you knew that you couldn’t resell it, because all the software in it would stop working, making the car useless?

jedipunk (profile) says:

Find away for customers to buy the discs.

It would be interesting if Redbox could convince customers to buy the discs, watch them, then sell them to Redbox (at a discount) and receive redbox credit at any kiosk. Netflix could do the same thing.

I don’t know what the going rate is for buying from distributors is but I might be willing to do this. Netflix could just ask customers to include the disc in a mailer and Redbox could have mailers at the kiosk.

Anonymous Coward says:

Re: Find away for customers to buy the discs.

Interesting idea, but it doesn’t provide the DVDs for rental immediately when it’s released to the stores. Since many of these people will take it home, watch it a few times, THEN sell it to Redbox, there will still be the delay factor.

Additionally, Redbox would need to some sort of central processing system to accept discs, perform verification, etc. This couldn’t be done at a Redbox machine since it involves extra technology to read the disc, determine if it’s a legit copy, apply it’s bar code labeling, etc. Something none of them have. Either way, it’s a huge upfront investment.

DannyB (profile) says:

Re: Find away for customers to buy the discs.

Redbox / Netflix could set up a program to crowsource the DVD purchase.

Here’s one plan I can imagine:

1. Customer signs in to her Redbox account.
2. Click a button to register to buy 1 copy of movie X that will become available on a future date.
3. Redbox ships customer a DVD “return” plastic jewelbox that is barcoded to know what movie it is and that it is due to be “returned” by midnight of the day the DVD is first available for sale.
4. On date disk is available, customer buys a copy from local unsuspecting Walmart store.
5. Customer watches movie, which is due back that evening in the rental jewelbox obtained much earlier in step 3.
6. Customer returns movie in jewelbox obtained in step 3. Each day late it is returned, the customer is docked the per day rental amount just like any other movie, until customer ends up owning the movie and can non longer return it.
7. Redbox pays customer. Or customer could elect redbox credit. Any number of payment mechanisms available. Put it back on your debit card. Snail mail you a Visa gift card, check, etc.

Redbox may offer bonuses to “return” the newly purchased DVD to a specific machine at a specific location.

Who thinks Redbox would need WB’s permission to do this?

DannyB (profile) says:

Re: Re: Re: Find away for customers to buy the discs.

Note that I said Redbox ships you the empty container. In case, I wasn’t clear, think snail mail.

Now Redbox has your name and address. They can know better than to take you up on your efforts next time. Furthermore, they might put an upper limit on each crowdsource purchaser based on reputation.

DannyB (profile) says:

Re: Re: Find away for customers to buy the discs.

Let me improve upon my plan.

Redbox has an Android and iPhone app for crowdsource buyers.

Once you’re in the Walmart and have, say, six DVD’s in your hand, you can then use the app to register this fact with Redbox, who can instantly decide if they want six, or maybe only four. The app could instantly tell you how many Redbox would like you to buy. Once you check out, if Walmart had prevented you from buying more than quantity X, you could then register that fact on the app so that Redbox now has an up to the moment “inventory” of how many DVD’s it is about to own and what machines they will be returned to.

One of the replies to my earlier post suggested that the empty return boxes might be obtainable from the Redbox machine. Good idea — but only obtainable to someone who has the app and a certain level of “reputation” as a crowdsource purchaser with Redbox.

Anonymous Coward says:

Re: Re: Find away for customers to buy the discs.

Modifications to the plan.

Step 3 wouldn’t even need to include the jewel case since you can get empty jewel cases from the kiosk when you do the “return”.

Step 2: Redbox could set-up an affiliation through Amazon (or some such) where the customer could purchase the disk, Redbox would make money on the affiliation purchase, and the Redbox disk label could be sent with the disk. Heck a jewel case could even be included in the packaging in this step if needed (maybe a select-able add-on).

That Anonymous Coward (profile) says:

Re: Find away for customers to buy the discs.

Plus the added benefit of getting the full dvd experience, rather than the “special” rental version where we took out subtitles and other features so you would be so upset you’ll run out and buy a retail disc rather than call out studio a buncha asshats and make a note to avoid our films all together.

I-Blz says:

Re: Why make the effort?

Because, unfortunately, they make good movies, and people will continue to go see them. Hell, I can say I’m going se Dark Knight Rises right now! The same with games. I’m not buying BF3 because EA are dicks, but i cant stop my self from recommending it to others, because it’s simply the better shooter right now. I can also say I’ll be buying Dead Space 3, despite myself. I try, but sometimes the franchises are just too good to skip out on a certain company completely.

Tech42 (profile) says:

Re: Re: Why make the effort?

My fault – I wasn’t very clear.

I meant, why would Redbox not just ignore them? People will, of course, see films they like, but it seems to me that a business such as Redbox (or Netflix in another case) is just cutting its overall margin for the sake of promoting an antagonistic supplier’s material.

nasch (profile) says:

Re: Re: Re: Why make the effort?

I meant, why would Redbox not just ignore them? People will, of course, see films they like

That’s why Redbox won’t ignore them. Blockbuster and Netflix will continue to have WB movies, because people want them. Having a poorer selection of the things your customers want from you is not a good business strategy. Also I suspect most movie watchers don’t know what studio most movies come from (I know I don’t). They will just see that Redbox doesn’t have a third (or whatever) of the movies they want to see, and go somewhere else.

Anonymous Coward says:

Re: Re:

Netflix won’t pull this same stunt. They have a streaming business that could get lopped off at the legs if they push against the studios too hard. Redbox can thumb their collective nose at the studios because, at the end of the day, the studios can’t do squat to materially affect their business.

Adam J says:

Warner Brothers will probably come back and say that they are only “leasing” the rights to movie when you buy the dvd.

To be honest with you all, this is exactly why I bit torrent or red box movies instead of going to the theaters now. Movies in the past few years have been crappy and uninspired. Definitely not worth my money. The Footloose remake comes to mind. Really, Hollywood? You want me to pay for this crap? Good, quality, movies are hard to come by these days. Put out good content and stop being greedy, Hollywood, then maybe you might get some money out of more people.

Crashoverride (profile) says:

-News Flash-

WB just announced sales where at an all time high. They are now imposing a limit on the numbers of copies a person can buy. For fear that all those darn sales might result in a copy being rented.

Furthermore only the top one percent are allowed to view their movies. Those that can purchase not rent a movie.

Another worry is that a demand for toys and other promotional products might increase if you watch their movies.

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