Why Universal Wants To Kill Redbox: It's Launching Its Own DVD Kiosks

from the competition-through-lawsuit dept

Fri, Oct 31st 2008 4:22pm — Mike Masnick

It did seem a little odd that Universal Studios was trying to bully Redbox into an agreement that would kill off the DVD vending machine company. After all, having Redbox out there renting some movies (which it paid for) certainly seems better than it not even being an option. Initially, we just chalked it up to Universal trying to make sure it had more control over the rental market -- but a bunch of readers this morning are pointing out that there may be a much more direct reason. It turns out that Universal Studios is launching its own DVD kiosk system. Initially, it's in the UK, but it's likely there are plans to offer them in the US as well. So now the ridiculous "take it or leave it" bullying threat from Universal Studios to Redbox makes a lot more sense: it was designed to force a competitor out of business so Universal could have the market to itself.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: competition, dvd, kiosks, lawsuits
Companies: redbox, universal studios

18 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

michael, 31 Oct 2008 @ 5:07pm

If that is not illegal, it should be! Certainly it's unethical.
[ link to this | view in thread ]
Anonymous Poster, 31 Oct 2008 @ 5:08pm

Well, isn't that nice.

No, wait, nice isn't the word I'm looking for.

Evil, yeah, that's the word!

Evil.
[ link to this | view in thread ]
tack, 31 Oct 2008 @ 5:17pm

vandalism for the people
They'd be stupid to have those here, they'd be vandalized daily to protest the MPAA. Redbox is great because its a good value in an industry that offers little of value.
[ link to this | view in thread ]
Anonymous Coward, 31 Oct 2008 @ 5:50pm

let them put thiers side by side to redbox, see who rents the most, and what one gets vanalized the most
[ link to this | view in thread ]
Anonymous Coward, 31 Oct 2008 @ 7:16pm

I'm with #3 & #4... Oops, that was a plastique DVD, not a plastic DVD.
[ link to this | view in thread ]
Adol, 31 Oct 2008 @ 8:14pm

This was a really ridiculous move on Universal's part, attempting to bully a wholly subsidiary of one of the largest corporations on the planet.
[ link to this | view in thread ]
RD, 31 Oct 2008 @ 9:42pm

Yeah right
And anyone want to put money on how much U$ will charge for these rentals? Hint: it wont be $1 per night or whatever Redbox charges, it will be 2-3x as much. Greedy corporations that use underhanded tactics to force out competition will be the end of this world.
[ link to this | view in thread ]
Michael B, 1 Nov 2008 @ 7:15am

Not Accordin g to Other News Stories...
From what I read elsewhere, the so-called POP! kiosks being started in the UK are NOT DVD vending machines, but CONTENT vendors... you plug your USB-enabled media device or memory card into them and the kiosk fills them with audio and/or video content. Joint venture between Sony & Universal. Unless, of course, they plan on another, totally different, evil kiosk!
[ link to this | view in thread ]
Ajax 4Hire, 1 Nov 2008 @ 7:59am

I passed a RedBox in the Wal-Mart and thought...
I passed a RedBox in the Wal-Mart and thought who would rent a DVD from a kiosk?

The management of payment, return, quality control just seemed too onerous. But then I walked by on Friday night and saw a line 25 people deep. A line to rent DVDs from a Red Vending Machine, a RedBox and I was amazed.

I love the USA, only in the US could something this innovative be viable. Only with a Credit/Banking System that allows merchants the ability to reclaim lost/stolen goods and the ability of customers to easily pay; only in this environment could something like RedBox thrive.
[ link to this | view in thread ]
Michael B, 1 Nov 2008 @ 1:56pm

Re: I passed a RedBox in the Wal-Mart and thought...
There is a lot to like about Redbox... for example, I rented Leatherheads (BORING) from one last night for $1 and, while driving around today, returned it at another location. Their business model is simple... use only credit cards so if someone never returns a rental hit them for $24 after a certain period... only charge $1 per night... give you one free rental... no people to train, pay, give lunch breaks or benefits to... the only downside I see is the limited selection of videos. I would much prefer to put out $1 for a movie that MAY be great (Leatherheads was NOT) than $3.99 for one that turns out to be a dud.
[ link to this | view in thread ]
Celes, 3 Nov 2008 @ 12:46am

Re: Re: I passed a RedBox in the Wal-Mart and thought...
Though each Redbox has a limited selection (and IMHO, the selection isn't much worse than that of my particular neighborhood Blockbuster), they don't all carry the exact same movies. It depends on what people return where and when, I suppose. And if you know you're going to rent one, you can check the machines in your area at redbox.com and see what's currently there, which is a feature I'm quite fond of.
[ link to this | view in thread ]
Pixel_Rider, 3 Nov 2008 @ 4:18am

Re: I passed a RedBox in the Wal-Mart and thought...
I hate to say it, but the US is way behind on the whole vending machine thing. Take a look at some of the things they have over in japan. Over there, you can purchase just about anything (look it up...I mean ANYTHING) from a vending machine, and even pay with your cell phone.
[ link to this | view in thread ]
hegemon13, 3 Nov 2008 @ 6:23am

Re: I passed a RedBox in the Wal-Mart and thought...
"The management of payment, return, quality control just seemed too onerous."

And only Redbox could pull it off. The second movie I rented from a Redbox was scratched and unplayable. At the time, I figured that was it, no more Redbox for me. But, I went to the Web site and emailed their customer service. Within 8 hours I received an apologetic reply thanking me for reporting the bad disc and giving me THREE free rental codes. They earned me back, and I have never had an unplayable disc since. For a company whose business revolves around vending machines, their service is surprisingly good.

As far as returning movies, it is far more convenient to look for the closest golden arches than to drive out of my way to the specific store I rented from. And most people in line are nice enough to let you jump in if you are only returning (it takes about 15 seconds). It seems like there is a Redbox etiquette evolving or something because I would not have expected this to be the case.
[ link to this | view in thread ]
hegemon13, 3 Nov 2008 @ 6:25am

Re:
I think it was pretty clear antitrust before, but this seals the deal. Now, it can easily be proven in court that Universal was directly interfering with the contracts of a competitor, not just a distributor, and price-fixing their product to eliminate competition.
[ link to this | view in thread ]
redbox guy, 12 Nov 2008 @ 10:34am

Re: Re: I passed a RedBox in the Wal-Mart and thought...
I like the training and benefits I get from working for redbox :-) but there are ant that many of us out there so the low cost structure stays viable.
[ link to this | view in thread ]
redbox guy, 12 Nov 2008 @ 10:38am

Re: Re: Re: I passed a RedBox in the Wal-Mart and thought...
typo: there are not that many of us out there... My appologies to the reaaders.
[ link to this | view in thread ]
Mo, 28 Dec 2008 @ 9:09am

universal and redbox
I would never rent from universal backed business if they continue to push redbox. Redbox has been a great service.
[ link to this | view in thread ]
michael r, 6 Jul 2009 @ 10:32pm

universal wins
It is much easier for Universal to create a ghost company that can buy Redbox, rename it and rent or sell movies at higher prices. Example: Sisco.
Sisco buys smaller or emerging startups that in the long run can jeopordise their business, that's why they are the largest network communications company in the world. Another example: Microsoft...... I can go on and on and on. Point is, if you're big and well connected chances are antitrust laws will always bend
[ link to this | view in thread ]