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Film Studios May Block DVD Rentals For One Month 545

Posted by kdawson
from the some-dare-call-it-collusion dept.
Ponca City, We love you writes "The LA Times reports that in an effort to push consumers toward buying more movies, some major film studios are considering a new policy that would block DVDs from being offered for rental until several weeks after going on sale. Under the plan, new DVD releases would be available on a purchase-only basis for a few weeks, after which time companies such as Blockbuster and Netflix would be allowed to rent the DVDs to their customers. 'The studios are wrestling with declines in DVD sales while the DVD rental market has been modestly growing,' says Reed Hastings the CEO of Netflix. 'If we can agree on low-enough pricing, delayed rental could potentially increase profits for everyone.' Three studios have already tried to impose a no-rental period of about a month on Redbox, the operator of kiosks that rent movies for $1 per night, believing that Redbox's steeply discounted price undercuts DVD sales. Redbox has responded by suing the studios, seeking to force them to sell it DVDs simultaneously with competitors. Meanwhile, the company is stocking its kiosks with DVDs it can't otherwise obtain by buying them from retailers."
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Film Studios May Block DVD Rentals For One Month

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  • Redbox buying DVDs (Score:5, Informative)

    by The_Wilschon (782534) on Tuesday October 27, 2009 @05:18PM (#29889353) Homepage
    My brother in law works for redbox, and sure enough, every time a new major film is released to DVD, he goes to every walmart in his area (and we're not talking just one county here) and purchases anywhere from several hundred to a couple thousand copies, starting at midnight. He then takes them home and one by one puts them into non studio-branded cases, then goes out and stocks the redbox machines he manages.
  • by wizardforce (1005805) on Tuesday October 27, 2009 @05:28PM (#29889499) Journal

    Then don't buy their products. They can not profit from you at that point without some type of socialism.

  • by Anonymous Coward on Tuesday October 27, 2009 @05:43PM (#29889765)
    That's why I always pay with a credit card. If someone tries to screw me, I have the option of doing a chargeback. I had an Amazon seller try to screw me once. I laughed when he told me that my request for a refund was "denied."
  • by Absolut187 (816431) on Tuesday October 27, 2009 @05:51PM (#29889905) Homepage

    There are actually three Redbox lawsuits in Delaware District Court.
    From PACER, the cases are:

    (1) Case number: 1:08-cv-00766-RBK-JS
    Redbox Automated Retail LLC v. Universal Studios Home Entertainment LLC et al

    (2) Case number: 1:09-cv-00613-RBK
    Redbox Automated Retail LLC v. Warner Home Video

    (3) 1:09-cv-00592-RBK
    Redbox Automated Retail LLC v. Twentieth Century Fox Home Entertainment LLC

    Redbox is asking the court to find "copyright misuse" [] which is an antitrust doctrine that courts use when a company tries to abuse the rights granted under copyright. Redbox is seeking an injunction basically requiring Universal/Warner/Fox to sell it DVDs.

    Factually, the complaint basically alleges that the studios are "shaking down" Redbox for more money. E.g., Universal wants Redbox to sign a "revenue sharing agreement" or Universal will stop supplying DVDs. The agreement states that Redbox will not rent DVDs until 45 days after the "DVD sell-through street date established by [Universal]." It also limits each Redbox kiosk to 8 copies of any movie. It also requires Redbox to destroy all the DVDs when it is done renting them.

    The big case on copyright misuse is BMI v. CBS, 441 U.S. 1. (summary [])

    Sadly for redbox fans, the legal answer, based on BMI, is most likely that the studios can require whatever the fuck they want in their contracts. We shall see.


  • Re:DVD vs. BluRay (Score:4, Informative)

    by IceFox (18179) on Tuesday October 27, 2009 @05:52PM (#29889919) Homepage
    While advertising makes it look like BluRay has won last I checked it had a big 8% market share. It isn't exactly hot. I personally never plan on owning one and am going to skip over it.
  • Re:hey, it beats (Score:3, Informative)

    by MBGMorden (803437) on Tuesday October 27, 2009 @06:12PM (#29890193)

    Yeah, cut your nose off to spite your face. That's a good plan. It'll really show them who's boss!

    My bet: you talk big, but you won't actually modify your behavior (iow: either you already don't buy movies, or you'll keep buying at the same rate).

    No need for nose cutting. Torrenting is already efficient and easy enough that in reality most people who actually buy movies are just making a token gesture to play by the rules.

    It's a simple issue: the industry has ZERO negotiating power with most consumers these days. Disney's "Vault" used to have some power. Stupid tactics like this USED to have some influence on people. These days though? Piss us off and we'll torrent what we want. They've did enough to damage their reputation already. For the people still content to be paying for stuff like these they shouldn't work too hard towards hindering the arrangement that is working.

  • by paulmac84 (682014) on Tuesday October 27, 2009 @06:38PM (#29890571) Homepage

    I though the only place to get new movies was through The Pirate Bay.

  • by Henry Pate (523798) on Tuesday October 27, 2009 @06:40PM (#29890591) Homepage Journal

    Couldn't they just make bulk orders through a distributor such as Ingram Micro? Or is Ingram Micro being prohibited from selling to Redbox?

    That's exactly what they did.

    But... what happened now is that these studios (Fox, Universal and Warner Bros.) told not just the distributors (Ingram and Video Product Distribution) but also retailers like Best Buy and Wal-Mart to not sell to Redbox. That's restraint of trade. The studios have every right not to sell videos to whomever they want -- but those distributors and retailers can then sell to whomever they want. The studios should have no say in the downstream sales of the videos once they've been sold to the distributor, wholesaler or retailer. That's where the antitrust issue is. The studios are successfully controlling downstream sales.

    Source - TechDirt []

  • by sootman (158191) on Tuesday October 27, 2009 @07:38PM (#29891253) Homepage Journal

    Surprisingly, Disney is rather decent in this area. []

    If you accidentally damage or break one of your Disney DVDs, you can get a replacement disc for a nominal charge of $6.95.

  • by canajin56 (660655) on Tuesday October 27, 2009 @07:39PM (#29891267)

    rental is a subset of performance.

    Interesting legal theory. Let us consult 17 U.S.C., Section 106. (That's the Copyright Act)

    (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
    (4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

    I'm no lawyer, but that looks to be included in right #3, the right to distribute the work, the same right that's limited by the Doctrine of First Sale, and NOT under right #4, the right to publicly perform the work.

  • Re:hey, it beats (Score:3, Informative)

    by znerk (1162519) on Tuesday October 27, 2009 @07:42PM (#29891293)

    You keep forgetting that most of the populace are NOT geeks and wouldn't know a BitTorrent from a nasty rain.

    This may be true... but substitute "limewire" for "torrent", and see how many of them suddenly have the light come on. Speaking as a computer tech, the number one piece of software I can expect to find on some "computer stupid" user's virus-infested machine is LimeWire. "Oh, is that where the porn ad popups and fake antivirus programs come from? Who knew?" ... Oh, and it's never them, it's always "the kids" - but when you glance through their "My Music" folder, there's 150 "oldie-but-goodies", along with something from 50-cent, and 2 Britney Spears songs.

    Torrenting is alive and well, and obviously much more prevalent than you think.

  • by mabhatter654 (561290) on Tuesday October 27, 2009 @08:21PM (#29891687)

    But the point is RedBox DOESN'T HAVE a contract and doesn't need one. They buy their rental licensed DVDs from distributors the same way any other video store does for fairly set prices by the studios. The studios singled them out and interfered with the free sales of the distributors by telling distributors to withhold shipments from RedBox unilaterally. Now to get their scheduled purchases, the studios want RedBox to sign special agreements... when lots of other little video stores from the same distributors don't have to.

  • by SuperKendall (25149) on Tuesday October 27, 2009 @08:29PM (#29891769)

    Or it implies that people are changing their habits. Netflix means not just renting movies, but being able to get it on ... well, not a moment's notice, but a few days' notice.

    If people are just shifting from buying to renting, you would see a matching increase in rentals to the decline in purchases - but the purchasing decline is much greater. That's why I say the data agrees with his thought that people are simply not liking the movies being produced as much.

    Not that I totally disagree about people changing habits... there's so much other media to watch perhaps people are a little burnt out on movies.

  • by Valdrax (32670) on Tuesday October 27, 2009 @08:37PM (#29891847)

    I lost faith in antitrust law when they failed to do anything significant to Microsoft. Or to Rambus. Or when AT&T recombined (which I want to go ahead and say was mostly symbolic to me and not an actual antitrust threat). Or how the FTC, DOJ, and other agencies have repeatedly declined to get involved hundreds of major mergers beyond a cursory investigation in the past few decades. Or how the Obama administration appointed dozens of RIAA & MPAA friendly attorneys to the DOJ. Or when I found out that there's an exemption in antitrust law for health insurance companies under the 1945 McCarran-Ferguson Act. (So why not record labels given bipartisan love for them?)

    I vaguely remembered the MPAA & RIAA seeking an exemption a few years ago. It was part of the EnFORCE Act of 2003, but it apparently never passed. (I find myself cynically surprised.) I've always been struck by how flagrantly the RIAA & MPAA look like cartels and have long assumed that the reason they haven't been successfully sued was some kind of special legal loophole for them. Seems that there are a few long-running suits by sued file-sharing companies against the industries for antitrust violations that haven't been resolved (instead of simply losing and going away like I assumed).

    Anyway, it seems to me like Redbox may have shot at this. I hope they win, but precedent that someone posted later in the discussion suggests that they may not. I find myself lacking much in the way of hope there.

  • Re:The other push (Score:3, Informative)

    by Cramer (69040) on Tuesday October 27, 2009 @09:37PM (#29892227) Homepage

    CD/DVD's cost pennies to make and are pressed by the thousands per hour. VHS tapes take a lot longer and cost a lot more. Rental chains got the "first runs" at insanely higher prices ($100 and $150 PER TAPE were common) before there were quantities available for retail purchase. As such, rentals were a massing source of income. That market is gone, now. They'd rather get $19.95 for a DVD that cost $0.10 to make.

  • by Anonymous Coward on Wednesday October 28, 2009 @08:49AM (#29895685)

    I don't know what store you shop at, but every store I've ever bought DVDs/CDs/Games gives the one exception that if the item is actually damaged they will exchange it for another copy of the same thing. Just to name a few Walmart, Target, even Gamestop. If your store isn't doing that, then you need to pick another store.

I don't want to achieve immortality through my work. I want to achieve immortality through not dying. -- Woody Allen