Media Money with Julia Boorstin

Redbox, Universal, 20th Century Fox End Lawsuits in DVD Deal


Big news ending an ongoing legal battle between movie studios and Redbox, the $1-per-day rental kiosk company. 20th Century Fox and Universal Studios have struck a distribution deal with Redbox, agreeing to wait 28 days before offering new DVD releases for rental from Redbox kiosks.

This should protect studios' high-margin business of selling new releases on DVD. With this new plan, consumers eager to watch a new release on DVD won't have the option of renting them for a buck a day until a month after they go on sale in stores.

This ends ongoing and expensive lawsuits between the companies. Redbox sued 20th Century Fox last August, because the studio insisted on imposing a 30-day delay before making its DVD releases available to the rental company. Universal was sued by Redbox the prior year for waiting 45 days after a DVD's release to give discs to Redbox to rent.

The three companies are presenting this as a win-win-win, saying that by agreeing to the delay, RedBox gets the benefit of reduced costs and the guarantee of adequate inventory. They also say that this will benefit customers, who won't have to worry about RedBox running out of these titles when they are available to rent.

These lawsuits and their resolution with this deal is a testament to how determined the studios are to protect their DVD revenue. That business is facing so many threats already — from digital distribution to piracy — that these studios felt they had no choice but secure this delay.


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