So the movie studios want big prices for CD’s. Redbox wants to rent the latest films at $1 per night. Universal opened fire: No wholesale purchases until 45 days after a new release. Redbox bought the movies retail and kept their customers supplied.
Other companies are taking sides. Sony just signed a five year agreement with Redbox to provide movies wholesale in exchange as long as Redbox destroyed the discs instead of reselling them once their rental life ends. Meantime, Fox follows suit with Universal and Redbox files suit.
Redbox accuses Universal (they have yet to file against Fox) of “Anticompetitive Behavior.” Other major studios wait on the sidelines. The real issue here is that of timing. The studios want to maximize sales. Redbox gets much of its $25 revenue from a CD at its early release–45 days just won’t do. But buying at retail is a costly solution.
Redbox, whose revenues and kiosks grow each day, needs wholesale purchasing to remain out of the red. The studios need the discount vendor to keep its place in line with the $1 movie theaters (somewhere near the back of the line). Who wins? Hopefully the consumer. And this time, Redbox is on our side.
A little less revenue for Hollywood might not be such a bad thing. Ask yourself whether anyone, even Johnny Depp, need $75 million for 9 months work? Seems like some salary adjustments may be all that stands between us and those $1 movies.
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