Redbox Continues to Stand Their Ground

Warner Brothers has set a twenty eight day waiting period on Netflix and Redbox for new movie rentals.  If this were the only movie studio making this rule it probably wouldn’t matter much but Universal and 20th Century fox have jumped on the band wagon.  The movie studios are interfering with the rental business of any company which rents new movie releases at cheap prices.  Their main target is Redbox which rents movies for $1.00 per night no matter how old or new the film is.

Redbox has doubled their income over the past year.  Customers are showing their preference for renting movies at one dollar per night to purchasing new movies at $20.00 plus.  The cheap rental companies are making money while the movie studios are loosing profits.  In order to attempt to stem this income loss the movie studios are cutting off access to new movie releases to the rental companies like Redbox.

This may seem like a big business problem which has nothing to do with the consumer.  The real question is, will movie buffs be willing to wait the twenty eight days to rent the movies for $1.00 or will they give in and pay the studios their exorbitant prices to see the movie now.  This is an opportunity for the consumer to speak up with their pocketbook.  They can choose to wait and support the one dollar rental companies, thus denying the studios a victory, or they can give in and pay high prices for a movie they may only watch once or twice.

Most movie watchers are aware of the on going legal battle between the movie rental companies and the studios.  Netflix is bending over backwards to cooperate with the studios and keep the flow of new movies coming while Redbox planted their feet and filed a lawsuit based on antitrust laws.  The lawsuit is pending the court’s decision at the present time.

The movie studio’s refusal to send new releases to Redbox doesn’t mean the kiosk company will necessarily stop renting the movies.  What is does mean is that Redbox will have to purchase the movies at retail prices.  Redbox will be force to lay out more cash if the courts decide in favor of the movie studios.  The big beef here is the waiting period.  Redbox has a deal with several movie studios which provide a given number of movies for the rental company kiosks.  These rental companies kick money back to the studios.  Studios want people to watch their movies; they don’t want their customers to watch their movies for one dollar.  In other words, the movie studios want to have their cake and eat it too.

Source: Associated Content Entertainment and Business