Redbox Accuses Fox, Warner of Retailer Interference

1 Dec, 2009 By: Chris Tribbey

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Wal-Mart, Best Buy and Target all have told Redbox representatives they can’t buy more than three copies of any new-release DVD, according to new court filings in the kiosk operator’s ongoing lawsuits with Warner Home Video and 20th Century Fox Home Entertainment.

In amended complaints filed Nov. 30, Redbox accuses the two studios of ordering the retailers to not sell large quantities of new-release DVDs to the kiosk operator, keeping Redbox from stocking new-release titles on street date.

Redbox is suing the two studios, as well as Universal Studios Home Entertainment, after the studios sought to keep new-release DVDs out of kiosks for 28 to 45 days after street date, and ordered wholesalers Ingram Entertainment and Video Product Distributors to stop selling to Redbox.

“Warner representatives contacted not only VPD and Ingram, but also numerous other distributors and retailers of DVDs, seeking confirmation that they would agree not to sell new-release DVDs to Redbox during the 28-day blackout period,” the amended complaint against Warner reads. “ … Warner continues to seek agreement with, and cooperation from, major wholesalers and retailers to prevent sales of new-release DVDs to Redbox.” The amended complaint against Fox reads similarly.

The amended complaints add allegations of interference with prospective business opportunities and unfair competition.

“Defendant obstructed Redbox’s only remaining channels for the supply of DVDs for its kiosks, resulting in the loss of economic profits it would have received in renting and selling Warner DVDs in its kiosks,” the suit reads.

Warner Bros. responded to the amended complaint saying Redbox was hoping to “gain leverage at the bargaining table.”

“Warner Bros. filed a motion to dismiss Redbox’s improper and baseless complaint.  Now, instead of responding to Warner’s motion on the merits, Redbox has changed its complaint. We will review the amended complaint and take the appropriate action,” the studio said.

The amended complaints read similarly to the one Redbox filed against Universal, claiming that studio coerced Wal-Mart and Best Buy into limiting the number of new-release DVD sales to five for Redbox employees. Universal strongly denied the allegation Aug. 31, saying it never “implemented a ‘boycott’ or engaged in ‘interference’ or exerted ‘unlawful pressure.’ … Universal denies that it ‘has demanded that Best Buy and Wal-Mart retail stores cease or severely limit their sales of Universal DVDs to Redbox.’”

In other news regarding the suits, Fox is seeking to move its case with Redbox to the Central District of California, since most of the witnesses who would be called in the case reside in Los Angeles, and a lighter docket at that court could expedite the case.

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