Studios escalate battle against movie rental kiosks

By Eriq Gardner

Another major studio is joining the fight against movie rental kiosks that let consumers watch movies for as little as one dollar.

According to Ars Technica, Fox has ordered its wholesalers not to sell its DVDs to Redbox until 30 days after a DVD release.

The move follows Universal's decision last year to prohibit Redbox from renting its DVDs until 45 days after release. Uni also limited the amount of its DVDs that Redbox could offer consumers and told the upstart company it needed to destroy viewed DVDs rather than sell them at a discount. Last October, Redbox sued Universal Studios Home Entertainment and three of its affiliates, alleging violation of antitrust laws and misuse of copyright.

The case is still pending and will explore the issue of what authority a purchaser of a lawfully made copy of a copyrighted work has in re-selling the product. Section 109 of the Copyright Act of 1976 ("the first-sale doctrine") grants a purchaser the right "without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord."

Entertainment companies have long loathed this provision and have fought against re-sellers of movies and music. The rise of Redbox poses more issues as this new market threatens to undercut DVD sales and more expensive places to rent DVDs, like Blockbuster. According to the Wall Street Journal, Fox would like to negotiate with Redbox on "better economic terms, such as sharing rental revenue."

Redbox maintains it doesn't have to share anything. The issue will be resolved in Delaware Federal Court.