DVD Rental Kiosk Firm Redbox Sues Warner Home Video

Authored by Mark Hefflinger on August 19, 2009 - 9:16am.

Oakbrook Terrace, Ill. - Redbox, a unit of Coinstar (NASD: CSTR) that operates over 17,000 $1-per-night DVD rental kiosks, has filed suit against Warner Home Video (NYSE: TWX), alleging the studio is degrading consumers' rights by limiting distribution of its DVDs to Redbox until 28 days after they go on sale. Last week, Redbox filed a similar suit against News Corp.'s (NYSE: NWS) 20th Century Fox, and yesterday, a federal court dismissed two motions in Redbox's lawsuit against Universal (NYSE: GE).

The judge dismissed Redbox's claims that Universal was misusing its copyrights, and had acted in breach of contract -- but let stand the company's antitrust claims against Universal.

Redbox has signed long-term deals with other studios, including Sony Pictures (NYSE: SNE), Disney (NYSE: DIS) and Lionsgate.

Variety noted that these deals do not place a "vending rental window" on the release of DVDs to Redbox, but do limit the sale of DVDs as used product once they are removed from Redbox's kiosks.

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