DVD Kiosk War Heats Up; Redbox Sues 20th Century Fox
The battle for control of the DVD rental business continues to heat up.
Redbox, the Coinstar (CSTR) unit which operates more than 15,000 DVD rental kiosks around the country, today announced that it has filed suit against 20th Century Fox over new proposed distribution terms which would prevent Redbox from renting the studio’s DVDs to consumers until at least 30 days after they are released to the public.
As I noted in my May 18 column in Barron’s, Redbox has a similar suit pending against Universal Studios. The issue: Redbox rents movies for $1 a day. The price is so low that the studios fear that consumer will be incented to stop buying DVDs, thus wrecking a lucrative component of studio revenues.