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Redbox Plays the Customer Card

7 Aug, 2009 By: Thomas K. Arnold

All right, I'm back. In case you were wondering where I was and aren't following me on Twitter or Facebook, I spent the last week backpacking in Yosemite National Park, making do without running water, bathrooms and electricity. Am I glad to be back? HECK YES!!!

 I spent last night catching up on emails and industry news and saw that another salvo has landed in the stare-off between the studios and Redbox: 20th Century Fox is calling for a 30-day delay in new release DVD movies becoming available in buck-a-night rental kiosks (for the original story, click here). 

That's in sync with the perception by some studios that rental kiosks are the home entertainment industry's equivalent of dollar movie houses and, like their theatrical brethren, should not get first-run movies. 

Our story prompted this official rebuke from Redbox, which appeared in my email box early this morning: 

Oakbrook Terrace, Ill. – Despite 20th Century Fox’s effort to delay consumer access to new release DVDs by 30 days at rental kiosks, redbox reaffirms its commitment to providing consumers new release DVDs.  Redbox will protect consumers’ rights to access new release DVDs at their preferred retail channel at the price the consumer deems reasonable.  Redbox will continue to carry all major new releases, including 20th Century Fox titles, at the more than 17,000 redbox locations nationwide. The first priority at redbox is the customer.  

Smart move by Redbox to play the customer card--although the studios could rightly argue that if the customer is always in the driver's seat, new release movies routinely could be downloaded for free over the Internet. The customer, you see, is not always right, particularly in this new era of entitlement when nobody feels they should have to pay for anything. But by the same token, Redbox is complying with the law, specifically the First Sale Doctrine--and it does have a point, saying it is merely following the business. 

The real issue, of course, comes down to dollars. Redbox is making a mint by renting studio movies and not sharing any of the proceeds with Hollywood. And at the same time, the kiosks are undercutting not just regular rental dealers, but also the sellthrough business, which in the studios' eyes is far more important. 

I don't think this matter will be resolved anytime soon, if ever--hence, the differing approaches the studios have taken in dealing with Redbox, from Universal Studios' lawsuit to Sony Pictures' five-year deal to lease its titles to the kiosk company. 

Stay tuned for what happens next.


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