posted 12-01-2017 10:45 AM                       

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Disney Sues to Block Redbox’s Digital Movie Sales
By Todd Spangler
NY Digital Editor

Disney has filed a lawsuit seeking to stop Redbox from selling digital codes for purchasing Disney movies to download or stream.

In October, Redbox launched a service offering “digital codes” (redbox.com/digital-movie-codes) for customers to be able to purchase Disney movies at from its nationwide network of kiosks. The kiosks print out a code with information on how to stream or download them to various devices.

In response, a Redbox spokeswoman said, “While we don’t comment on pending litigation, we feel very confident in our pro-consumer position.” The news was first reported by the Wall Street Journal.

Disney said in a statement, “Redbox is selling our digital movie codes in blatant disregard of clear prohibitions against doing so. Their actions violate our contracts and copyrights, and we have filed this action to stop Redbox’s unauthorized conduct.”

Disney’s lawsuit, filed Thursday in a federal district court in California, alleges copyright infringement and seeks an injunction on Redbox’s sale of its movies. Disney is asking for damages of up to $150,000 per title sold by Redbox, and also wants Redbox to fork over the money it has made from sales of its movies.

Disney titles that Redbox offers for sale through the digital codes service include “Cars 3” for $14.99; “Guardians of the Galaxy Vol. 2” for $7.99; “Pirates of the Caribbean: Dead Men Tell No Tales” for $7.99; and “Rogue One: A Star Wars Story” for $4.99.

Redbox, which went private last year, hasn’t had a direct distribution deal with Disney since 2012. For DVD titles from the Mouse House that Redbox offers for rent, the company purchases discs on the open market.

Redbox’s move to sell access to Disney movies may have been intended to apply pressure on Disney to reach a direct deal for DVD distribution. Disney operates its own digital movie service, Movies Anywhere, which in addition to titles Disney (including Pixar, Marvel Studios and Lucasfilm) offers selections from Sony Pictures Entertainment, 20th Century Fox Film, Universal Pictures and Warner Bros. Entertainment.

Earlier this year, Redbox inked new deals with Sony Pictures Home Entertainment and Lionsgate for day-and-date rentals (available same day as retail Blu-ray and DVD release) and with Warner Bros. and 20th Century Fox for rentals seven days after home-video release.

Redbox says it averages more than 1 million rentals per day, charging charges $1.50 per day for DVD rentals and $2 per day for Blu-ray rentals. The company expects to have installed more than 1,500 net new rental kiosks in 2017, to have about 41,500 kiosks across the U.S., with more planned in 2018.

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posted 02-28-2018 02:42 PM                       

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Disney's attempt to prevent Redbox from buying its discs for rental and resale may have blown up in the House of Mouse's face. The Hollywood Reporter describes how District Court Judge Dean Pregerson sided with Redbox to shoot down a Disney-mandated injunction. In addition, Pregerson contended that Disney may itself be misusing copyright law to protect its interests and its own forthcoming streaming service.

If you're unfamiliar with the backstory, Redbox didn't have a deal in place to procure Disney DVDs and Blu-rays for its disc rental kiosks. So, the company simply bought the discs at retail, often snagging combo packs that include a DVD, Blu-ray and a download code for the movie as well. Redbox would then offer up the discs for rental, and sell on the codes at its kiosks for between $8 and $15.

Such a move enraged Disney, which includes language in its packaging and on the website demanding that users must own the disc if they download a copy. But this is where Pregerson began to disagree, saying that Disney cannot dictate what people do with copyrighted media after they have bought it. Specifically, that there's no law, or explicit contract term, that prevents folks from doing what Redbox did with Disney discs. Although it's possible that Disney can amend the wording on its packaging in future to make its objection to reselling legally binding.

The next hearing will take place on March 5th, where Redbox's motion to dismiss Disney's action will be considered. Although it's obvious that the deep-pocketed Disney will likely continue to fight the battle until humanity itself has evolved into a sentient gas. But the decisions that are made through this case will be important on how these copyrights are treated while we transfer into the post-physical media landscape.

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