Andre Yoskowitz
5 Sep 2009 19:14
Redbox, the $1-a-night DVD rental kiosk company, is under fire again this week, this time from independent retailers who claim the company's business model is putting the entire industry at risk.
In other news, a new study by research firm SNL Kagan has suggested that the business model will put VOD companies out of business as well. This is all on top of lawsuits Redbox is currently facing from three major studios Fox, Universal and Warner Entertainment , over the low cost rentals.
The main independent retailer group, The Video Buyers Group, says their retailers are "struggling to compete" and the company is looking to the major studios for support in their campaign against Redbox. VBG is in charge of 1700 shops.
The group will be releasing online, print and TV ads showing that movie studios earn less revenue from the $1 USD rentals, and eventually profitability will begin declining as well.
VBG president Ted Engen even boldly stated the following: “Dollar rental kiosks are to the film industry as the Internet was to the music industry. That’s how bad this thing can get.”
No one else is part of the campaign as of yet, but at least one studio exec sympathizes.
“One company can’t be allowed to artificially reduce the value and availability of movies,” said the source, via VB. “Redbox’s short-term gains will shortly wreak havoc on producers, writers, laborers and ultimately consumers who love a broad selection of movies. If you don’t work with Redbox on its terms, it sues.”