The DVD rental service Redbox filed a suit against Disney’s home entertainment group on Saturday. The mouse house filed its own suit against the movie and video game rental kiosk company in December to stop Redbox from selling digital copies of Disney films.
Redbox officially filed a counter suit against the studio a little over a month after Disney’s original suit, claiming that the company uses “hard-knuckled tactics” to prevent the rental kiosk from renting or selling its DVDs. In the suit, Redbox further suggests Disney is making it difficult for the company to sell digital copies of its films because Disney is currently developing its own streaming service for a 2019 launch. Redbox’s suit argues Disney is thus attempting to “prop up the prices consumers pay” ahead of the official launch.
“Disney baldly seeks to stifle competition and eliminate low-cost options in order to maximize the prices it and its retailers charge consumers,” Redbox argues in a suit filed in federal district court in Los Angeles. “Stopping Redbox’s sale of Disney products is a means to that end, which is an unhappy one for consumers.”
Redbox suggests that this isn’t the first time it has experienced problems dealing with the entertainment corporation. Redbox contends Disney has opposed the kiosk service from the start, claiming that while other studios willingly jumped on board the service, Disney’s distribution arm, Buena Vista Home Entertainment, held-out for some time as they felt Redbox charged too little for its services and threatened to “depress prices” for Disney titles.
The company initially tried to get Redbox to hold off on adding their titles until 28 days after the initial home release, something Redbox was uncomfortable with. Redbox opted to buy Disney’s titles at full price — most commonly the buy combination packs that included DVDs, Blu-ray discs and digital movies all in one — and then began selling each separately. This apparently led to Disney allocating its titles at one of the company’s main suppliers in an attempt to prevent the rental service kiosk from offering its titles.
Following news last October that Redbox had begun selling the digital copies, Disney filed a suit in December, attempting to prevent the rental service from selling the digital copies of the films that it received as part of the combination packs. In its suit, Disney states that Redbox had begun “illegally selling [the] Plaintiffs’ digital movie codes to Redbox customers in blatant disregard of clear prohibitions against doing so.” Disney insists it has and will continue to lose sales due to Redbox’s allegedly fraudulent conduct. In Redbox’s newly-filed suit, it insists that the sales of the digital copies fully legal. What’s more, Redbox counter-argues that Disney’s actions are actively harming Redbox’s entry into the digital market as consumers are being dissuaded from its service as they search for in-demand titles which include Disney, Pixar and Marvel Studios films.
Disney is coming off of a blockbuster 2017, which saw the studio score the top three domestic debuts of the year in Star Wars: The Last Jedi, Beauty and the Beast and Guardians of the Galaxy Vol. 2. It ended the year with over $6 billion at the box office and an announcement that it has all but sealed a deal to takeover a majority of 21st Century Fox, pending government approval.
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