Fox fires legal volley back at DVD kiosk vendor Rebbox
By Sean P. Aune
20th Century Fox Home Entertainment has fired back at DVD kiosk vendor Redbox in their current legal battle over when the retailer can purchase films from the studio for rental.
As we reported the other day, Redbox has filed lawsuits against 20th Century Fox Home Entertainment, Lionsgate, Sony Pictures Home Entertainment and Universal Studios Home Video over the studios wishing to withhold new DVD releases from the vendor until 28 to 30 days after their initial release. The reasoning behind this is that the studios believe the kiosk vendor renting new releases for $1 a night has cut into sales of those releases.
Redbox filed the lawsuits against the studios saying that these decisions violate antitrust laws.
According to Video Business, 20th Century Fox Home Entertainment has now moved to have the lawsuit dismissed as being meritless. The company claims that the suit was born out of negotiations over pricing not going the way that Rebbox wanted them to, and that instead of opting to pay industry standard pricing, the vendor instead decided to file a lawsuit against them. Fox said that under these conditions they could have ordered wholesalers to stop supplying the kiosk company, but instead it is allowing them to continue to purchase DVDs, but only 30 days after the initial street date.
The legal filing by 20th Century Fox certainly doesn’t pull any punches in its wording:
Antitrust law does not require a seller to provide its product through the distribution channel that the buyer demands, on the date that the buyer demands, or at the price that the buyer demands. To the contrary, sellers have considerable freedom under the law to sell [or not sell] to whomever they want, how they want and when they want. To this end, a seller’s distribution policies do not violate [antitrust law] unless the plaintiff proves a contract, combination or conspiracy that injures competition. Redbox cannot meet any of these elements.
According to a recent survey by Rentrak, video rentals grew by 8.3 percent in the first half of the year, with the majority of that growth being credited to kiosks. During the same time period, video sales fell by 15 percent. If the two things are directly related is unclear, but it sure seems like more than just a coincidence.
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October 3rd, 2009
Of course Fox is correct in their assertion of their obligation as a seller. BUT they miss the forest for the trees. Their sales business is dying because they provide no compelling reason for a consumer to WANT to buy versus rent their product. Clearly studios would rather sell than rent.