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Hollywood hasn't been a big fan of change or innovation. That's no secret. They were against VCRs, against digital movie playback systems such as Kaleidescape, against the consumer's wish for DRM-free digital downloads, and now they are against Redbox, the DVD rental vending machine.
These vending machines offer a good selection of DVDs for which you pay $1 per night for the rental using your credit card. You can return it at any Redbox vending machine, not just the one that you got the movie from, and after a while, the charges cease and you can keep the disc.
The studio's problem with this is that this bypasses traditional rental outlets which have profit sharing deals, and because the rental prices are so cheap, they feel it threatens their sale and rental revenues.
While Redbox has deals with Sony and Paramount, Universal, Fox and Warner Bros. have threatened to stop the supply of movies to Redbox if their demands are not met. The demands include only renting movies 45 days after release, giving studios a massive 40% of profits for royalty purposes and even destroying older rental copies instead of selling them cheap. On this last demand, Redbox has already given in to Sony and Paramount, and have agreed to destroy all rental discs that are no longer needed.
It's the same old story of studios trying to protect their outdated business models, and in the end, it will be the consumer that pays the price. Literally, sometimes.
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These vending machines offer a good selection of DVDs for which you pay $1 per night for the rental using your credit card. You can return it at any Redbox vending machine, not just the one that you got the movie from, and after a while, the charges cease and you can keep the disc.
The studio's problem with this is that this bypasses traditional rental outlets which have profit sharing deals, and because the rental prices are so cheap, they feel it threatens their sale and rental revenues.
While Redbox has deals with Sony and Paramount, Universal, Fox and Warner Bros. have threatened to stop the supply of movies to Redbox if their demands are not met. The demands include only renting movies 45 days after release, giving studios a massive 40% of profits for royalty purposes and even destroying older rental copies instead of selling them cheap. On this last demand, Redbox has already given in to Sony and Paramount, and have agreed to destroy all rental discs that are no longer needed.
It's the same old story of studios trying to protect their outdated business models, and in the end, it will be the consumer that pays the price. Literally, sometimes.
More:
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