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DVD Kiosks Challenged in Indiana County

Redbox kiosks are among those targeted

By : Chris Tribbey | Posted: 03 Mar 2010

The ongoing feud between brick-and-mortar video store owners and the DVD kiosk industry is heating up in one Indiana county, where retailers with Redbox and MovieCube kiosks have been told to remove all DVDs rated above 'G' or face prosecution under state law.

Paul Black, an Evansville, Ind. attorney representing the owner of several area video stores, convinced the Vanderburgh County prosecuting attorney to send letters to roughly a dozen retailers with DVD kiosks earlier this year, telling them to stop providing access to videos, movies, games, etc. that contain an ‘R’ or ‘PG’ rating or are unrated.

The letter goes on to warn that the county sheriff’s office will follow up to see that “your kiosks no longer contain these videos which are prohibited to be disseminated to minors.” The letters site Indiana state law, which calls for class D felony charges against “a person who knowingly or intentionally disseminates matter to minors that is harmful to minors.”

“We asked the local prosecuting attorney to look into whether these kiosks could possibly violate state law,” Black said. “We’re not on a particular crusade, but you can just walk up to any of these kiosks and rent adult material. There’s a danger in availability. We card people in liquor stores, minors don’t have access to cigarette machines. This is a level playing field issue.”

Black wouldn’t say who his client was, but noted that the Video Buyers Group (VBG), which represents more than 1,700 independent rentailers nationwide, was working with the client. Repeated calls to the office of Stanley Levco, Vanderburgh County’s prosecuting attorney, were not returned.

VBG president Ted Engen said this is the first time the issue of kiosk DVD ratings and minors has reached the county level. Previous objections to minors’ access to kiosk DVDs were raised first in the city of Union City, Ind., in 2007, and again in 2008 in Anthony, Kan. Engen predicted the state of Indiana would take up the issue should the retailers, Redbox and NCR decline to remove the DVDs.

“Video stores are held to one standard, and these kiosks are held to a different standard,” he said. “It’s wrong.”

Neither Redbox nor MovieCube operator NCR Corp. said how they would react to the demands, though both have attorneys responding to Levco’s office.

“First, overall, we have clear processes in place to restrict the rental of DVDs to the appropriate age of consumer, and we believe our kiosks are being operated in full compliance with the law,” said NCR spokesman Jeff Dudash. “The kiosks are operated consistent with the industrywide practices for DVD vending kiosks all over the United States.”

He said NCR operates four MovieCube kiosks in the county.

Gary Cohen, SVP of marketing and customer experience for Redbox, noted that parental supervision is important when it comes to DVDs, and that most DVD players have built-in parental controls to block offensive content from children.

“Confirmation of age is a requirement of Redbox,” he said. “When renting a movie from Redbox, customers must confirm they are 18 years of age or older with a valid debit or credit card.

“In the event a customer selects an ‘R’-rated title, the customer must confirm they are 18 years of age to proceed with their rental. Whether renting movies online, from a kiosk, from a store or purchasing content from the Web, parental supervision is the most important factor in entertainment access and selection.”

Cohen also noted that the courts have “uniformly ruled” that attempts to restrict rentals based on Motion Picture Association of America (MPAA) ratings violate the First Amendment.

Ironically, one of those rulings, 1992’s VSDA v. Webster in the 8th U.S. Circuit Court of Appeals, was brought about by two video retailers, in addition to the MPAA and Video Software Dealers Association. They successfully challenged a Missouri statute that aimed to restrict minors’ access to violent videos.

Engen said that doesn’t matter.

“Yes, the ratings system isn’t legal, but these state codes determine what’s considered inappropriate materials,” he said. “These DVDs don’t belong in the hands of minors. And the state of Indiana agrees with us.”

Eric Wold, an analyst with Merriman Curhan Ford in New York, said the VBG is pushing the issue “because Redbox is killing their business,” and noted that Redbox machines are in public, while a minor can go online and use a credit card to buy anything with no one watching.

But Engen said the issue isn’t about competition between the VBG and kiosks. Warner Home Video’s recent agreement with Redbox to delay availability of new release DVDs for 28 days after street date began to change that misperception, he said.

“This is an industry issue, not a competition issue,” he said. “Once we get a state to look at this, we know they’ll say, ‘That’s wrong.’

“If it takes new laws, we’ll pass new laws.”


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