Legal news for Illinois entertainment attorneys. Hollywood movie studios sued for denying Redbox new release DVD’s.
Illinois entertainment lawyer alert-20th Century Fox and Universal sued by Redbox over new movie releases.
Chicago, IL—Redbox, the highly popular $1-per-night DVD kiosk rental company, is embroiled in fight with Hollywood movie studios who supply the movie rental company with wholesale movie discs. Redbox filed a lawsuit against 20th Century Fox, alleging the company is keeping their new movie releases from reaching the Redbox vending machines for a month after they were released for retail sale. The Fox lawsuit is in connection with a similar lawsuit involving General Electric’s Universal Pictures, who is also withholding their new releases from Redbox kiosks, as reported by The Washington Post.
On Wednesday, August 12, 2009, Fox stopped it’s wholesale distributors from providing Redbox with their new release DVD’s until 30 days after the movies have been released in retail outlets. Fox announced the new policy would take effect on October 27, 2009. Redbox also recently sued Universal, when the movie company tried to implement a similar delayed release to Redbox for 45 days past the retail release date. Redbox slammed Universal with an antitrust lawsuit, as a response to Universal’s new policy. A federal judge in Delaware is expected to rule on Universal’s lawsuit soon. Not all Hollywood movie production companies have rallied against Redbox; Sony’s movie division recently signed a five-year contract to supply Redbox with movies. Conditions of the contract state Redbox will receive DVD’s at a cheaper cost, but will be required to destroy them when their rental life is up, instead of reselling them for a “previously viewed” price point.
Redbox claims when the studios don’t supply the movie vending company with wholesale DVD’s, Redbox has to buy the movies from regular retail stores, thus driving up costs and cutting profits. The main concerns of the movie studios are the overall movie sales, and movie production executives fear the cheap rental rate provided by Redbox could diminish the higher-priced DVD retail sales. The studios depend on the sale of the DVD’s as a source of their income.
Legal News Reporter: Nicole Howley-Legal news for Illinois entertainment lawyer.