Redbox kiosk DVD embargo

[poppachubby]

If the three studios lose their case to Redbox, all rentals from all rental companies will be hit with a 30 day blackout across the board. I know that is going to be Disney's policy, and I have spoken to my counterparts at Sony, Lionsgate, Warner and Paramount, and they have confirmed that they will also institute a blackout period as well.

I'm pretty sure that as powerful as these companies are, they can't turn off my power. What do you mean by black out T?

[Geoffcin]

...to netflix by picking on its little cousin.

By the way, the difference between a car and a movie, is that with a car you can make an exact copy of it and give it away. With a movie, you can't. As long as you're not selling the car or making a profit, this is legal. Of course, the assumption the car manufacturer makes is that an individual won't have the means to make copies of cars, but the cost of copying a movie is a different story.

By the way, you can't legally lend a movie to a neighbor, or anyone else outside your home, for that matter. It's to be viewed by one household only. You can make a "backup" copy, but again, that's only for use in your own home. What RedBox is doing is buying a home version of a movie from Walmart and Target, and then renting it out for viewing to multiple households. I'm not a legal expert, but I do believe that violates the rights of artists.

It should be interesting to see who wins this one.

I'm sorry Nightflier, but you are wrong on all counts.

If you were able to copy ANY of the patented designs in a car you would not be able to "give them away" or even manufacture a copy for private use. A patent means that the invention/design belongs to the patent holder and him alone.

You absolutely CAN lend your DVD's to your friends, neighbors, or anyone you want. You can re-sell them at a profit, rent them out, or even destroy them. What you can't do is make a COPY and give it to your friends, and even if the courts have decided that you can make an archival copy, you can not use it while your original is in use, i.e. both at the same time.

You also can not make any copy available on a server to anyone else in the household while one copy is playing. Basically if you want to watch/listen to any copywrited material in multiple stations you must have multiple copies. I don't know how the RIAA is going to enforce a rule like that, but it exists.

[Geoffcin]

I'm pretty sure that as powerful as these companies are, they can't turn off my power. What do you mean by black out T?

I think he means that the major studios will not make copies available to ANY rental agencies. i.e. if you want to watch a copy of the latest movie you would have to BUY it directly. In my view that would be a pyrric victory at best.

[nightflier]

they just want Redbox to get in line with Blockbuster and Netflix on how DVD rentals are handled.

...the Redbox price of $1 a rental is going to go up for the consumer. That is, Redbox has been renting at a price that should have been higher had they "gotten in line." If the studios win this, it will indeed be a Pyrrhic victory, because it will further irritate the millions of Redbox renters who will now have to pay higher prices. Moreover, Redbox could very well fail as a result and that will be one less way that people will have access to rentals. This would not be good for the studios either.

Geof,

No I don't think so. As long as I don't make a profit on that car, I'm pretty sure I can make an exact copy of it and give it to anyone I like. If we're talking about art, I can also make an exact copy of a Rembrandt painting, and give that away. It won't be the original worth millions, but there is nothing illegal about doing this.

As far as lending movies to neighbors and friends, that is definitely not allowed. The fact that many people do it and that it is not enforced, does not make it any more legal. Now I don't know the legality of renting them out, but I think that is exactly what this Redbox suit is all about.

[Geoffcin]

Geof,

No I don't think so. As long as I don't make a profit on that car, I'm pretty sure I can make an exact copy of it and give it to anyone I like. If we're talking about art, I can also make an exact copy of a Rembrandt painting, and give that away. It won't be the original worth millions, but there is nothing illegal about doing this.

As far as lending movies to neighbors and friends, that is definitely not allowed. The fact that many people do it and that it is not enforced, does not make it any more legal. Now I don't know the legality of renting them out, but I think that is exactly what this Redbox suit is all about.

Nobody said you have to belive me, but a patent is the right of the inventor to exclude others from making his design.

Also, from the web, since nobody seems to belive me anymore. This is for UK law which is actually stricter than US law;

http://www.moviesatwork.co.uk/help/faq.php#2

Is it legal to lend DVDs, CDs, Books etc ? [Top of Page]
The renting and lending of things like DVDs, CDs, Books, etc, is covered by UK copyright law. You can find the consolidated text of this law here.
Under this UK copyright law it is perfectly legal to lend your DVDs, CDs etc to your friends and family. This may be a surprise to you based on the warning messages that usually pop up when you play a DVD or Video. In fact "lending" is only considered as an infringement of copyright when it is done "through an establishment which is accessible to the public". What this basically means is that it is totally legal to lend to your circle of friends and family.

[Sir Terrence the Terrible]

I'm pretty sure that as powerful as these companies are, they can't turn off my power. What do you mean by black out T?

A blackout period means that for 30 days only sales will be allowed before rentals can take place. The studios distributors will withhold all discs going to netflix, blockbusters, redbox, and any other kiosk based rental concern.

[poppachubby]

A blackout period means that for 30 days only sales will be allowed before rentals can take place. The studios distributors will withhold all discs going to netflix, blockbusters, redbox, and any other kiosk based rental concern.

Whoa.

[Geoffcin]

http://www.bc.edu/bc_org/avp/law/st_...998040801.html

The first sale doctrine states that once a copyright owner sells a copy of his work to another, the copyright owner relinquishes all further rights to sell or otherwise dispose of that copy. The Supreme Court first adopted the first sale doctrine in the case of Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908). In that case, the Supreme Court held that the exclusive right to sell copyrighted works only applied to the first sale of a copyrighted work. 210 U.S. 339, 349-350. While the copyright owner retained the underlying copyright to the expression fixed in the work, the copyright owner gave up his ability to control the fate of the work once it had been sold.

Application to DVDs and NEBG v Weinstein

No special new copyright protection was given to movies on video and DVD by the two above amendments, and consequently buyers of retail DVDs in the United States are free to sell or exchange them, and rent and lend them to others.

This right was underlined by the US courts in the case of NEBG v Weinstein[4], in which a film-industry defendant accepted that it had no right to restrict buyers of DVDs from renting them to third parties.

Copyright owners sometimes affix warning notices to packaged DVDs, or display notices on screen before showing the content, which purport to list uses of the DVD that are forbidden under copyright law. Such notices do not always fairly reflect the buyer's legal rights established by the first-sale doctrine.

[Sir Terrence the Terrible]

You also can not make any copy available on a server to anyone else in the household while one copy is playing. Basically if you want to watch/listen to any copywrited material in multiple stations you must have multiple copies. I don't know how the RIAA is going to enforce a rule like that, but it exists.

G,
At this point even servers are off limits because to get film content on current servers in the market, they must be ripped which defeats CSS and that is illegal. This is the basis of cases with the studios and Kaleidescope and Real Network

[Geoffcin]

G,
At this point even servers are off limits because to get film content on current servers in the market, they must be ripped which defeats CSS and that is illegal. This is the basis of cases with the studios and Kaleidescope and Real Network

Yes, your right. I had made the argument by relating CD's to DVD's, but defeating the disk's copyright protection is a violation.

[Sir Terrence the Terrible]

...the Redbox price of $1 a rental is going to go up for the consumer. That is, Redbox has been renting at a price that should have been higher had they "gotten in line." If the studios win this, it will indeed be a Pyrrhic victory, because it will further irritate the millions of Redbox renters who will now have to pay higher prices. Moreover, Redbox could very well fail as a result and that will be one less way that people will have access to rentals. This would not be good for the studios either.
.

Not quite. If Redbox fails, it will have no impact on the studios as they get no rental revenue from them, only its portion of the sale to Redbox. They would gladly sacrifice that to cut ripping of rentals. What I mean by getting in line is to come to the table and negotiate a distribution deal like Netflix and Blockbuster have done. If the result of that is a price increase, then so be it. Redbox will have to decide whether it is in their interest to take a cut in revenue so they can have the content, or they can reject it and have less content to offer. The studios and retailers are well within their right to restrict how many copies of a movie one person can purchase to protect their revenue streams. Keep in mind, if Redbox's model is allowed to continue, the retailers could be hurt as well as DVD is a loss leader to some retailers that gets consumers into stores.

[Geoffcin]

The studios and retailers are well within their right to restrict how many copies of a movie one person can purchase to protect their revenue streams. Keep in mind, if Redbox's model is allowed to continue, the retailers could be hurt as well as DVD is a loss leader to some retailers that gets consumers into stores.

The Clayton act clearly does not allow the studios to act as a monopoly so as to sell to only chosen entities, or to change pricing for one buyer over another so as to make rental services uncompetitive. If the studios do band together to do this kind of anti-competitive practices you can bet that the lawsuit will go straight to the Supreme Court.

[Sir Terrence the Terrible]

The Clayton act clearly does not allow the studios to act as a monopoly so as to sell to only chosen entities, or to change pricing for one buyer over another so as to make rental services uncompetitive. If the studios do band together to do this kind of anti-competitive practices you can bet that the lawsuit will go straight to the Supreme Court.

The studio do not have to band together to do anything, everyone negotiates on their own terms. It has always been this way since everyone's business model is unique. As it stands right now, there are only three distribution sources that one can purchase DVD and Blurays in bulk, and these three distributors have very strong contracts, and a good business relationship with the studios. If the Redbox case goes in favor of Redbox, then DISNEY will impose a 30 day delay period for rentals, and Warner and Paramount could do more or less based on how the delay will coordinate with their business model. I do not talk to my counterparts to set up deals, or negotiate how the studio will move as a whole. I communicate to see what they are going to do, because quite frankly Disney has such a unique and different business model from the rest of the studios, it would be pretty impossible to collude with other studios without damaging ourselves.

The Clayton act does allow each studio to negotiate for themselves, and as long as there is no evidence of collusion, their policies can be identical, and they can place as many limits as they so desire under a contract. If all of the studios individually decide that it is in their best interest to place a 30 day delay on rentals, they are in no violation of the law. Everything that looks anti competitive to the eye, quite often isn't. As long as the same rule applies for everyone (and Netflix and Blockbuster have already signaled that a 30 day delay is no problem for them), and it is decided on an individual basis, then it is not against the law.

[Geoffcin]

The Clayton act does allow each studio to negotiate for themselves, and as long as there is no evidence of collusion, their policies can be identical, and they can place as many limits as they so desire under a contract. If all of the studios individually decide that it is in their best interest to place a 30 day delay on rentals, they are in no violation of the law. Everything that looks anti competitive to the eye, quite often isn't. As long as the same rule applies for everyone (and Netflix and Blockbuster have already signaled that a 30 day delay is no problem for them), and it is decided on an individual basis, then it is not against the law.

It would not be a 30 day delay on rentals, it would be a refusal of the studios to allow the sale of bulk DVD's to specific entities. That is clearly designed to be anti-competitive, and if they do it it would be in clear violation of the Clayton act. Of course a judge would have to decide the matter, but they have consistantly come down in the favor of free markets, as opposed to the manipulated market that the studios envision.

[Sir Terrence the Terrible]

It would not be a 30 day delay on rentals, it would be a refusal of the studios to allow the sale of bulk DVD's to specific entities. That is clearly designed to be anti-competitive, and if they do it it would be in clear violation of the Clayton act. Of course a judge would have to decide the matter, but they have consistantly come down in the favor of free markets, as opposed to the manipulated market that the studios envision.

First, you have this pretty twisted. Secondly, it was Walmart, Target and others who have placed limits on how many copies can be purchased, it was not the studios who made this decision. The studios deliver their product to their distributors, the distributer delivers it to the retailers and rental businesses. ANYONE can negotiate a contract to buy in bulk, but in doing so, their are rules that must be followed. Redbox has approached three studios, and those studios have an agreement with Redbox with rules attached. Redbox wants the benefits, but they don't want to follow the rules that goes with the benefits.

It was the big box stores that decided to place limits on how many copies an individual can purchase with each visit. I don't blame them for this because it is DVD's that bring in the foot traffic that allows these big boxes to pitch other services and products to them. If one person comes in and purchases the entire stock of a titles when they first come out, then it slows down and often kills the foot traffic in the store. The big boxes made the decision that Redbox's model is hurting them, not the studios. To the studios, a sale of a disc is a sale of a disc. My question would be how would you like it if Redbox was coming in and buying all of your new releases the day of release, so you wouldn't have anything to sell or stimulate foot traffic to sell other products? That is the issue at hand.

Redbox's lawsuit against Warner, Paramount and Universal is based on their desire to skirt the rules so they can rent a disc for a dollar a night, much like Vizio skirted the rules so they can sell low cost LCD and plasma televisions. Redbox contends that Warner, Paramount and Universal has pressured Target and Walmart not to sell in bulk to Redbox. They have made this claim without a shred of proof to support it. The real issue here is that Redbox's purchasing model is unsustainable. If you want to charge $1 a night, you cannot purchase your content at retail prices. Their own investors have told them this. They do not want to go through the studios distributors because they do not want to follow the rules. They are trapped, and being forced to go through the proper channels to buy in bulk, and they don't like it.

So the issue here is not the studio refusing to sell in bulk to redbox, it is redbox unwillingness to go through the proper channels to get DVD's in bulk.

[Geoffcin]

First, you have this pretty twisted. Secondly, it was Walmart, Target and others who have placed limits on how many copies can be purchased, it was not the studios who made this decision.

That, as they say, is the question. If the studios have pressured the resellers to limit sales specifically so that companies like Redbox would faulter then you have anti-trust. I'm sure we're going to find out some pretty interesting goings-on when we get discovery in this case.

[Sir Terrence the Terrible]

That, as they say, is the question. If the studios have pressured the resellers to limit sales specifically so that companies like Redbox would faulter then you have anti-trust. I'm sure we're going to find out some pretty interesting goings-on when we get discovery in this case.

One thing that has always bothered me about these issues. It seems that most folks want to blame the studios for everything under the sun, but they really lack the details that point otherwise. Walmart and Target have already put it on the record that the studios played no role in their decision to limit the amount of copies that can be purchased. I think they got tired of Redbox cleaning out whole regions of stores of their new releases just to supply their Kiosk with content. The fact that you already have three of the seven studio with agreements shows that the studios as a whole are not engaging in anti-trust activities. One thing that is clear, the policy of limiting the amount of copies to each customer is not new. For Walmart it is more than three to four years old, and the same for BB and Target.

I see this as a Vizio moment. When everything was laid out on the table, Vizio found themselves in a lot of hot water, and settled out of court. I think the same thing will happen to Redbox, and unfortunately consumers will not be happy with the outcome.

[nightflier]

This is for UK law which is actually stricter than US law;

http://www.moviesatwork.co.uk/help/faq.php#2

Is it legal to lend DVDs, CDs, Books etc ? [Top of Page]
The renting and lending of things like DVDs, CDs, Books, etc, is covered by UK copyright law. You can find the consolidated text of this law here.
Under this UK copyright law it is perfectly legal to lend your DVDs, CDs etc to your friends and family. This may be a surprise to you based on the warning messages that usually pop up when you play a DVD or Video. In fact "lending" is only considered as an infringement of copyright when it is done "through an establishment which is accessible to the public". What this basically means is that it is totally legal to lend to your circle of friends and family.

If UK law applied, here in the US, then I would agree. But I am still of the opinion (I don't have any legal references to back this up), that it is not within my rights to lend movies to friends. When I was a student, dorms would rent one movie and then pass it onto everyone else in the dorm to watch as well. It was not public viewing because the movies were viewed on individual VCRs, but when the campus risk management found out, they put a quick stop to it.

Likewise, if I saw a movie that I really liked and wanted my friends and family to see it as well, I could buy 2-3 copies and then tell everyone to pass them around as much as possible. This kind of behavior, if repeated across the country, would also cut into profits for the studios so I have to imagine that this is not permitted. Yes, the warning at the beginning of movies is vague, but that does not mean this is permitted outright, either.

Here's another question: if I am watching a movie, and my friend comes over, can he watch it with me? What if he brings his whole family? What if several friends come over? And they bring their families? At what point does this become public viewing? I suppose that this hasn't been tested in court yet? To be perfectly honest, I am rather curious to find out the truth behind this question.

[Geoffcin]

Here's another question: if I am watching a movie, and my friend comes over, can he watch it with me? What if he brings his whole family? What if several friends come over? And they bring their families? At what point does this become public viewing? I suppose that this hasn't been tested in court yet? To be perfectly honest, I am rather curious to find out the truth behind this question.

Actually if you go down one of my posts you'll see the U.S. "law of First sale doctrine". This, along with subsequent Supreme Court rulings have stated that; "buyers of retail DVDs in the United States are free to sell or exchange them, and rent and lend them to others"

To answer your question;

Quite simply, if you are showing a movie or ANY copywrited material at your residence and are NOT charging a fee, you are OK. However, if you broadcast it in any way, or as my learned friend Mr T has said, crack the copywrite protection then you are in violation of the law. The law regarding copying is of course always in effect.

[Geoffcin]

One thing that has always bothered me about these issues. It seems that most folks want to blame the studios for everything under the sun, but they really lack the details that point otherwise.

Yes your correct!

Studios = Evil , $1 rental Redbox = Good!!

Or as all torrenters know, free even better!

Disclaimer; Torrenting should only be used for non-copyrighted and open source material

[Sir Terrence the Terrible]

Yes your correct!

Studios = Evil , $1 rental Redbox = Good!!

Or as all torrenters know, free even better!

Disclaimer; Torrenting should only be used for non-copyrighted and open source material

LOLOL!!

[Smokey]

ANYONE can negotiate a contract to buy in bulk, but in doing so, their are rules that must be followed. Redbox has approached three studios, and those studios have an agreement with Redbox with rules attached. Redbox wants the benefits, but they don't want to follow the rules that goes with the benefits.

Could you please tell us what are these rules?

BTW guys, very informative discussion.Thanks.

[Woochifer]

Ah! This clears up a lot of the mystery behind why Redbox was getting embargoed. I didn't know that Blockbuster and Netflix have setup revenue sharing arrangements with the distributors. That was very commonplace with VHS, and helped to kill off a lot of indie video stores that still had to buy their copies at wholesale. When the DVD first came into prominence, that eliminated the rental pricing window and significantly lowered the wholesale costs.

Redbox is gaining market share by undercutting the competition, but they can do that partially because they do not adhere to the same rules that competitors like Blockbuster and Netflix have to. I have a feeling that if Redbox has to enter into a revenue sharing arrangement, their rental rates will go up. And if T's right, they are already on thin ice because they have to buy product at retail (which is absolutely ridiculous for any business to do).

[nightflier]

If RedBox prices go up, or worse, if Redbox goes under, it will upset a lot of people - which will drive more people to download legally, semi-legally and illegally.

[Woochifer]

If RedBox prices go up, or worse, if Redbox goes under, it will upset a lot of people - which will drive more people to download legally, semi-legally and illegally.

Nope, they'll just hunt out the next alternative.

http://www.bloomberg.com/apps/news?p...o2oJkeZE&pos=7

I find it very hard to believe that a large cross-section of consumers that are in the habit of renting movies on disc will suddenly switch over to downloaded torrent files just because the rental costs went up by an as-of-now unknown amount, or one kiosk option became unavailable.

Downloaded media requires that somebody either switch to watching movies on their computer (good luck getting your average couch potato to do that), or buy a network device that hooks up to their current TV, or buy a TV that can read video files off a network connection or SD card. Seems like a much simpler transition to go somewhere that has a DVDPlay kiosk, go back to regular video stores, or get a Netflix subscription.

PPV and legal downloading options are more expensive than Redbox and more lucrative to the studios, so I'm sure the studios would gladly welcome any Redbox customers that want to switch over.