Print20th Century Fox Home Entertainment and Warner Home Video have filed motions to dismiss the antitrust lawsuits brought against them by Redbox, arguing that they have followed normal business operations with the $1-per-night DVD rental kiosk operator.
Fox said it reached out to Redbox with the same movie terms that it has offered to its other retail partners.
"Redbox's legal claims are fatally flawed," Fox said in a statement. "Fox's filing makes clear that, in the end, the case is all about Redbox's refusal to make a business deal on general terms similar to those paid by others in the industry. Unable to get the terms it wanted at the bargaining table, Redbox instead decided to file this meritless lawsuit."
Fox also is seeking a venue change from Delaware to Los Angeles.
Redbox last month filed a federal antitrust suit against Fox and Warner because of studio terms that would prohibit wholesalers from selling these studios' DVDs to the rental kiosk channel until at least a month after their initial street date. The suit charges the studios with copyright misuse, antitrust violations and tortious interference with contractual/business relationships in regard to Redbox's relationships with wholesalers VPD and Ingram.
Redbox also is suing Universal Studios Home Entertainment on similar grounds.
In court documents, Fox denies that it refused its titles to Redbox. Fox says it offered the kiosk company similar pricing and distribution terms that have been accepted by other retail customers. However, Redbox refused those terms, giving Fox the right to adjust its business relationship, the studio maintains. Fox says it could have chosen to stop selling DVDs completely to Redbox, but is allowing distributors to service Redbox with its titles 30 days after street.
"A seller's distribution policies do not violate [antitrust law] unless the plaintiff proves a contract, combination or conspiracy that injures competition. Redbox cannot meet any of these elements," Fox said in its filing.
Fox has directed wholesalers to sell its titles to Redbox 30 days after street date, beginning with Oct. 27 release
Warner echoes this sentiment of fair business negotiations in its own decision to offer Redbox and other kiosk companies its titles 28 days after street, starting with the Oct. 27 release of
"By transforming a business negotiation relating to the terms with which it may deal with Warner into an antitrust suit, Redbox hopes to gain leverage at the bargaining table," stated the Warner dismissal filing.
Warner asserts that Redbox cannot claim hardship with its new distribution terms.
"It is indisputable that since the alleged Universal 'boycott' against Redbox has been in effect, Redbox has continued to compete and, in fact, has gained an even stronger presence," stated Warner's filing. "Redbox's continued growth during the period Universal's wholesale policy has been in place belies its allegations of competitive injury based on Warner's wholesale policy here."
A U.S. District Court judge for Delaware dismissed two of the three counts against Universal in the 10-month-old lawsuit but denied Universal's motion to dismiss the antitrust claim altogether. The two counts dismissed relate to copyright and tortious interference, the latter term implying an attempt to disrupt another party's business relationships.
"We are confident in our legal position and the merits of our case as underscored by a recent decision in Delaware Federal Court," Redbox president Mitch Lowe said in a statement about the Fox motion.
Lowe noted that studios including Lionsgate, Paramount Home Entertainment and Sony Pictures Home Entertainment have distribution agreements with Redbox.
Redbox had no comment regarding Warner's move to dismiss at deadline.
Kiosks were largely responsible for an 8.3% growth in consumer spending on movie rentals in the first half of the year, according to Rentrak. But DVD sales fell more than 15% in the same period, and some studios believe that inexpensive kiosk rentals and consumer sales of the kiosks' used rental discs are at least partly to blame.
