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Disney Still Trying To Block Redbox Before Black Panther's DVD And Digital Release

Disney has been involved in an ongoing legal battle with Redbox for months regarding the latter's sale of download codes to Disney films. Now, the case takes another turn as one of Disney biggest hits ever gets ready to debut on Blu-ray. Following a judge's rejection of Disney's request for a preliminary injunction, the studio has now amended their complaint following changes made to their digital license agreement in order to meet the judge's concerns. The fact that this step has been taken now, shortly after the release date of Black Panther on Blu-ray was announced, is likely not a coincidence.

Disney's amended complaint was filed on Monday and on Tuesday Disney announced that Black Panther will be released for the home market in May. Considering the fact that Black Panther is a billion dollar franchise already, Disney clearly sees that the film is likely going to do very well on the sales front as people who flocked to the theaters, in many cases probably more than once, are very likely to want to own the movie once it becomes available. As such, they want to clamp down on Red Box's practice of selling digital download codes to films at prices lower than what other outlets are charging.

Disney filed suit against Redbox in December claiming that Redbox's practice of purchasing Blu-Ray "combo packs" and selling the included digital download separately to consumers was a violation of Disney's copyright. Thus far the legal rulings have mostly sided with Redbox as early decisions have found a misuse of copyright on the part of Disney. This latest move by Disney involves them rewording the language attached to the digital codes which states that only those who purchase the combo pack have the right to redeem the included digital code.

While Disney may want to get this issue settled before the release of Black Panther, it looks like that likely won't happen. The physical release of Black Panther was recently announced to be May 15, however, according to Deadline, the hearing to rule on Disney's amended complaint is currently set for early June. Since the judge declined to order an injunction temporarily halting Redbox from selling Disney's download codes while the case was in litigation, it's a pretty safe bet that Redbox will be looking to sell codes to Black Panther right up until they're told they can't, if that even happens.

In response to Disney's amendment, Redbox has amended their own complaint in the lawsuit, claiming that, among other things, that since the injunction against Redbox was denied, Other steps have been taken to prevent Redbox from obtaining Disney films, including limiting Redbox's ability to purchase bulk quantities of films from retailers. In the complaint, which was provided to CinemaBlend by Redbox, The rental company calls the conduct of Disney "anticompetitive and otherwise unfair."

Clearly, Disney is taking a financial hit here because people who purchase discounted codes from Redbox aren't giving any money to Disney, though they also aren't giving any money to Amazon or iTunes or any of the other retailers where one can purchase Disney movies digitally for full price. It's likely Disney won't be giving up on this case, even if the judge doesn't ultimately side with them, though it's unclear what the next step would be.

CinemaBlend’s resident theme park junkie and amateur Disney historian. Armchair Imagineer. Epcot Stan. Future Club 33 Member.

Sours: https://www.cinemablend.com/news//disney-still-trying-to-block-redbox-before-black-panthers-dvd-and-digital-release

Movie Studios See a Threat in Growth of Redbox

A Redbox kiosk at a Walgreens in Villa Park, Ill. The company and its rivals have 19 percent of the DVD rental market.

LOS ANGELES — In , just as the VHS tape was taking off, a “Star Wars” buff named Mitch Lowe had a radical idea. What about building a vending machine that could rent movies? He called his invention Video Droid.

It failed. People were not yet comfortable using credit cards for casual transactions, the tapes broke easily and the technology involved with manipulating their bulk proved too expensive.

But Mr. Lowe did not give up, and his moment seems to have finally come.

Mr. Lowe, 56, is now the president of Redbox, a fast-growing company in Illinois that rents movies for $1 a day via kiosks. By December, there will be 22, Redbox machines in spots like supermarkets, Wal-Mart Stores and fast-food restaurants.

Redbox’s growth — it started with 12 kiosks in and now processes about 80 transactions a second on Friday nights — has Hollywood’s blood boiling. Furious about a potential cannibalization of DVD sales and a broader price devaluation of their product, three studios (20th Century Fox, Warner Brothers and Universal) are refusing to sell DVDs to Redbox until at least 28 days after they arrive in stores.

Redbox is suing them on antitrust grounds. Leery of waging their own battles, two other studios, Sony Pictures and Paramount Pictures, have signed distribution deals with the vending company. Walt Disney permits third-party distributors to sell to Redbox but has so far shunned a direct relationship.

Redbox and its vending rivals now have 19 percent of the rental market, compared with 36 percent for rent-by-mail services (Netflix) and 45 percent for traditional stores, according to the NPD Group, a market research company. NPD estimates that vending will grow to a 30 percent share by the end of next year, at the expense of traditional stores.

Studios, aware that consumers are unlikely to pity their plight and muzzled by the lawsuits, are keeping quiet. Fox, Universal, Warner and Disney each declined to comment for this article. But Hollywood’s powerful public relations machinery is in motion behind the scenes to connect the news media with a group that is equally threatened by Redbox but much more relatable: mom and pop rental store owners.

“These machines are to the video industry what the Internet was to the music business — disaster,” said Ted Engen, president of the Video Buyers Group, a trade organization for 1, local rental stores.

Mr. Engen is enlisting lawmakers to attack Redbox for renting R-rated movies to underage viewers — the machines simply ask customers to confirm that they are 18 or older by pressing a button — and trying to rally the Screen Actors Guild and other unions.

“It’s going to kill the industry,” said Gary Cook, business manager for UA Local 78, which represents studio plumbers.

Mr. Lowe, meanwhile, is portraying the studios as greedy giants scheming to trample the little guy. “Don’t let a few movie studios prevent you from seeing the latest DVDs for an affordable price,” reads a headline on a new Redbox Web site, savelowcostdvds.com.

Redbox, formerly owned by McDonald’s and now part of Coinstar, is only the biggest of a host of DVD vending companies. DVDPlay, whose kiosks are also red, has been aggressive in California, while MovieCube is big in Canada.

Blockbuster is scrambling to introduce its own rental kiosks. There are now about Blockbuster Express machines, and plans call for 2, more by the end of the year; the company expects to open 7, in , a spokesman said.

The kiosk boom is fed by several consumer and business currents, all related to the recession.

For starters, the dismal economy has made people think twice about buying DVDs, especially as the likes of Redbox have made renting easier. Consumers are also tiring of the clutter: The average American household with a DVD player now has a library of 70 DVDs, according to Adams Media Research.

Over all, DVD sales are down percent for the first half of compared to the first half of , according to the Digital Entertainment Group, a trade organization. Studios say some new titles are selling 25 percent fewer copies than expected. Rental revenue is up about 8 percent over the same period, according to the group.

Retailers, struggling to keep people shopping, have realized that having a DVD kiosk in a store creates foot traffic, making it easier for companies like Redbox to sign wide-ranging installation agreements. Some partners, like Walgreens, have offered discounts that essentially make rentals free.

Redbox is also getting a hand because of Hollywood’s troubles. Analysts say Sony and Paramount signed agreements with the company in part because their home entertainment units are under pressure to meet financial targets, set before the DVD decline.

Sony’s five-year deal is worth about $ million in DVD sales to Redbox. Paramount’s deal starts with a four-month test; if the studio decides Redbox represents a net gain to its home entertainment business, it can extend its relationship for five years and a guaranteed $ million.

Paramount’s deal involves revenue-sharing, a rarity for Redbox. The kiosk operator primarily follows the mom and pop model: it seeks to buy discs wholesale and makes a profit with repeat rentals. (Revenue-sharing deals typically allow a rental store to buy discs for half the wholesale cost or less.) Redbox can price rentals at $1 and still make money because its machines eliminate so much overhead.

The $1 price is not the main issue for the studios, although they do not like that, either; it is the timing. New DVDs sell for about $ Video-on-demand services price them at about $5. Multiday rentals of new titles cost $ at Blockbuster.

Now there is a $1 option at the same time. That could put downward pressure on the industry’s price structure.

“Anyone whose business involves selling movies should be enormously concerned,” said Richard Greenfield, an analyst at Pali Research.

Analysts also see a threat to studios in Redbox’s practice of selling about half of its DVDs into the used market (after renting them about 15 times at an average of $2 a transaction). By signing deals with Redbox, Paramount and Sony got the kiosk operator to agree to destroy their discs rather than resell them.

“Our position is that this is a strong consumer trend, and we figured out a way to minimize the negative aspects and maximize the positive ones,” said David Bishop, president of Sony Pictures Home Entertainment.

Rob Moore, vice chairman of Paramount Pictures, said, “This trial gives us access to information that will allow us to make an informed decision about Redbox’s impact on our home entertainment business.”

Mr. Lowe dismissed worries about the cannibalization of sales. He cited internal research indicating that 20 percent of Redbox’s volume is additive — people who did not previously buy or rent DVDs — and that partners like Wal-Mart have had only a 1 percent decline in sales after Redbox machines have been installed at their entrances.

The kiosks hold about DVDs and focus on new mainstream releases.

Customers follow a series of touch-screen prompts to use the kiosks, which vend from slots on the side. Once a selection is made, the customer swipes a credit card through the reader. The card is charged a dollar (and tax) for each DVD rented; the charges for additional days, if any, are added when discs are returned. The charge for lost DVDs is $

“If you make renting affordable and fun, people are going to watch a whole lot more movies than they did before,” Mr. Lowe said.

Sours: https://www.nytimes.com//09/07/business/media/07redbox.html
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REDBOX Beatz - Fast and Furious 2018

'F9' broke a pandemic box-office record, but also shows how the movie-theater industry has permanently changed

  • "F9" debuted with $70 million domestically over the weekend, a pandemic-best opening.
  • But it will likely be available to rent on premium video-on-demand services in about a month.
  • It's a clear sign that the typical theatrical window may be permanently shattered.

"F9," the ninth installment in the "Fast and Furious" franchise, hit North American theaters over the weekend after a year-long delay due to the coronavirus pandemic. 

The delay paid off.

"F9" earned $70 million in its debut weekend, a new pandemic-best opening. It's so far made more than $ million worldwide, including $ million from the key market China, with more international markets to come.

Universal, the studio behind the "Fast Saga," was the first studio to push back a major tentpole release last year. Others quickly followed, either delaying movies until this year, or pushing them to digital-rental or streaming platforms (or both).

"'F9' is being rewarded for its commitment to a 'theatrical-first' release that provides the benefits of 'prestige and exclusivity' that only a big screen-centric strategy can create," said Paul Dergarabedian, the Comscore senior media analyst.

Universal's decision to delay "F9" and give it an exclusive theatrical release was a show of commitment to movie theaters. The "Fast and Furious" franchise has grown into a global box-office behemoth; the previous two entries in the main saga, "Furious 7" and "The Fate of the Furious," both grossed over $1 billion worldwide.

But "F9," despite its early success, is also the biggest sign yet that the pandemic has permanently altered the US theatrical industry and Hollywood's distribution practices.

Universal has reached agreements with the world's three largest cinema chains — AMC Theatres, Cineworld (which owns Regal), and Cinemark — to drastically shorten the exclusive theatrical window, which was between 75 and 90 days before the pandemic.

Now under the agreements, Universal can choose to release a movie to premium video-on-demand (PVOD) platforms — such as iTunes or Amazon Prime Video — 31 days after the movie debuts in theaters if it opens to $50 million or more domestically, and after 17 days if it opens below $50 million (this also applies to AMC, according to a person familiar with the deal, which had previously been announced as only a day window).

The person estimated that "F9" would hit PVOD after at least 35 days, giving it six weekends exclusively in theaters. New movies have typically been available to rent for $20 during the pandemic.

It will be Universal's first major test of how a new global blockbuster will play on digital-rental services.

 "An exclusive theatrical release creates an even higher level of interest — and thus revenue-generating horsepower — for these blockbusters once they hit the small screen," Dergarabedian said.

But Jeff Bock, the Exhibitor Relations media analyst, argued that a movie "may lose momentum and pop culture relevance" between when it debuts in theaters and when it arrives on PVOD.

But no matter what happens, the long theatrical window seems to be a thing of the past.

Some studios have taken more drastic steps than Universal during the pandemic. Warner Bros. is releasing all of its movies this year simultaneously in theaters and on the streaming service HBO Max. Disney has either released movies exclusively to Disney+ (Pixar's "Luca") or simultaneously in theaters and on Disney+ for an additional $30 fee (the upcoming Marvel movie "Black Widow").

But in the future, distribution strategies for theatrical releases are likely to look more like those of Universal or Paramount, which is releasing some of its biggest movies (such as "A Quiet Place Part II") to its streamer Paramount+ 45 days after they hit theaters. Warner Bros. has struck a deal with Cineworld for a day window beginning in (though it will still make some movies exclusively for HBO Max). 

"Most films make the bulk of their money in the first 10 days of release," Bock said. 

Sours: https://www.businessinsider.com/when-f9-available-to-rent-what-it-means-for-theaters

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