Redbox is still chugging along, looking for ways to keep competitive in a world of streaming giants and Peak TV. While plenty of people use the service and using their kiosks bring their own perks from time to time, one of their more recent ideas has rubbed Disney the wrong way. According to The Wall Street Journal, Disney is suing Redbox over the sale of digital codes sold with physical copies of their movies. As Engadget points out, Redbox does not have a distribution deal with Disney in the same way as other studios. This means Redbox is forced to buy Disney’s films at retail to add to their kiosks.
With this process, Redbox has taken the digital download codes included in each package and sells them to customers from $7.99 – $14.99. According to Engadget, Disney is seeking “$150,000 per copyright infringement” and also the profits from each of the codes that have been sold. The Wall Street Journal reports Disney feels their best defense is printed right on their boxes:
Disney sued Redbox in federal district court in California for copyright infringement, among other claims. It said in the complaint that Redbox is selling the digital codes “in blatant disregard of clear prohibitions against doing so and in violation of plaintiffs’ copyrights.”
It pointed to fine print on its DVD boxes that states, “codes are not for sale or transfer.”
According to a statement provided to Gizmodo, A spokesperson for Redbox said the company was “very confident in our pro-consumer position.” Disney holds that their contracts and copyrights have been compromised by Redbox’s actions, hoping to close the door on this stream and possibly set a precedent for other similar cases going forward. As Gizmodo points out, “nothing is being reproduced” with the sale of the digital codes but that Redbox is likely making more profits than they would through a “standard distribution agreement.”
Also interesting is how long the practice of Redbox purchasing copies of films for their kiosks has been going on. MoviePass CEO and former Redbox president Mitch Lowe told Gizmodo that he started buying discs in 2010 after studios refused to work with him and he lost “$28 million in revenue” after giving employees “1,800 credit cards” to buy physical copies at stores when they released.
(Via Engadget / Gizmodo / The Wall Street Journal)
