Consumers may best know Redbox as a video rental system. For a nominal fee, customers may visit a Redbox kiosk and rent a physical DVD or Blu-ray from the choice of a variety of movies. Redbox charges $1.50 per day for DVD rentals and $2 per day for Blu-ray rentals, but Redbox's latest business decision has landed them in hot water with Disney. The Mouse House is officially suing Redbox over claims of violating their contracts and copyrights, after the rental service began selling download codes for a selection of Disney movies.
Redbox's kiosk rental service primarily revolves around selling physical copies of movies. Thanks to distribution deals with major studios such as Lionsgate, Warner Bros. and 20th Century Fox, Redbox offers a variety of DVDs and Blu-rays available to rent near or on the same day as the home release. Disney, however, is not one of those distributors. Red Box does not have a current deal with Disney, and instead buys copies of Disney titles on the open market. In October, Red Box began selling the download codes to Disney titles such as Cars 3, Guardians of the Galaxy Vol. 2, and Rogue One: A Star Wars Story.
One of Disney's strategies with home releases of movies is to offer a bundle that usually includes a download code, alongside a physical disc for whichever title is being purchased. A printout of this code is what's being sold by Redbox kiosks. Purchasing these download codes through Redbox is cheaper than buying them through iTunes or Google Play. For example, Redbox sells a code for Guardians of the Galaxy Vol. 2 for $7.99, while the retail price on iTunes is $19.99. It's important to note that retail copies of these codes do say "not for sale or transfer."
According to Disney (via Variety), this is a "blatant disregard of clear prohibitions" against selling download codes and that Redbox's "actions violate our contracts and copyrights." A spokesperson from Redbox has responded that they feel "very confident" in their position.
In the lawsuit, Disney is asking for damages of up to $150,000 per title sold by Redbox, in addition to the money Redbox has already made from Disney's movies. Disney would also like an injunction to prevent the selling of further download codes. At the time of this writing, the download codes are still available to purchase through Redbox.
There are likely to be more developments to come on this lawsuit, so be sure to check back in with CinemaBlend for future updates. In the meantime, visit our Disney release guide to find out what the Mouse House has coming to theaters over the next few years.