Image copyright Redbox
Hot on the heels of all of the recent Disney-themed announcements over the past few weeks, the House of Mouse has gotten itself tied up in a serious legal battle, a report by Deadline says.
The American DVD and video game rental service, Redbox, has filed a suit against Disney, who filed their own suit against Redbox back in December in an effort to try and stop the rental kiosk company from selling digital copies of Disney films.
Redbox‘s counter-suit claims that Disney uses “hard-knuckled tactics” in an effort to prevent Redbox from selling or renting Disney DVDs. The suit also claims that Disney is purposely making it difficult for Redbox by interfering with the company’s relationships with its suppliers and customers, as well as making false claims that Redbox cannot resell digital copies of movies.
“Disney baldly seeks to stifle competition and eliminate low-cost options in order to maximise the prices it and its retailers charge consumers,” Redbox argues in their counter-suit.
“Stopping Redbox‘s sale of Disney products is a means to that end, which is an unhappy one for consumers.”
According to Redbox, Disney has opposed them and their philosophy from the very beginning, telling that, while other movies studios eventually got on-board with the service, Disney remained stubborn on their position.
In business negotiations between the two companies, Redbox claimed that Buena Vista Home Entertainment – Disney‘s distribution company – said that the rental services prices were too low and “threatened to depress prices for Disney titles.”
Disney is said to have insisted that Redbox neither sell or rent newly released titles until at least 28 days after initial DVD release, a condition that Redbox would not accept. To that end, the most cost-effective marketing approach that Redbox found was to buy combination packs of DVDs, Blu-Ray discs and digital movies which would then be sold on separately.
Redbox added to the claims that the Disney Home Entertainment Group gradually intensified their efforts to stop Redbox from selling any Disney titles, even going so far as to pressure distributors and retailers to cut out the kiosk rental service altogether.
To further this, Disney is, allegedly, guilty of reducing one distributor’s allocation of titles when they learned the company had been a major Redbox supplier.
“Defendants’ actions are harming Redbox‘s lawful sales of Disney digital movies,” the claim reads.
“And the impact of that harm is not limited to the reduced revenue from those lost sales. Redbox‘s entry into the digital market is being harmed as well. Because Disney is impeding Redbox‘s ability to sell Redbox‘s lawfully acquired Disney digital movies, consumers are being dissuaded from to Redbox as a source of titles that are in high demand.”
However, Disney’s claim against Redbox declared how Redbox had begun “illegally selling [the] Plaintiffs’ digital movie codes to Redbox customers in blatant disregard of clear prohibitions against doing so.” Disney continues and insists that they have and will continue to lose sales and revenue due to Redbox‘s allegedly fraudulent misconduct.
How this one will pan out remains to be seen, but it’s less than a glamorous legal battle for both companies, which will either lose Redbox a lot of money or paint Disney in a not-so-flattering light.