Redbox is officially suing Disney over a dispute involving the entertainment giant and video rental service. Though it's long become well-known for its red kiosks that can be found at grocery stores and other retail locations across the U.S., Redbox also recently launched an on-demand video service - that doesn't include Disney productions. Meanwhile, the latter is also preparing its own streaming service that it expects to be a legitimate competitor for Netflix.
Disney's upcoming on-demand video product is also a presumed factor in Redbox's recent accusations of questionable business tactics in a new lawsuit. Redbox has long provided an affordable price point for consumers who rent the home video products it purchases, but Disney has never been a fan of theirs. And now, Redbox has apparently had enough of Disney's practices when it comes to their tenuous business relationship.
Deadline first reported Redbox's lawsuit filed at the Los Angeles federal district court on Friday. Redbox is arguing that Disney's home video branch, Buena Vista Home Entertainment, is interfering with its business by pressuring other distributors and retailers into cutting ties with the service. Also, Redbox accuses Disney of falsely claiming that they are not allowed to resell digital copies of movies, which was the basis for Disney's original lawsuit against Redbox in December.
As part of the filing, Redbox explained why it believes Disney is doing what it's doing and what it means for consumers:
"Disney baldly seeks to stifle competition and eliminate low-cost options in order to maximize the prices it and its retailers charge consumers. ... Stopping Redbox’s sale of Disney products is a means to that end, which is an unhappy one for consumers."
Disney has always been something of an outlier when it comes to working with Redbox. The service successfully agreed to deals with other distributors, like Universal, for content in both kiosks and the on-demand version. But instead of working with Redbox, Disney resisted. It reportedly demanded that Redbox wait 28 days to start distributing new releases. Redbox then found a way around this by purchasing "Combo Pacs" of multiple Disney releases and selling them separately.
The lawsuit reveals that Disney even allegedly cut back on a distributors' Disney titles when it discovered the distributor was a major partner of Redbox. Ultimately, Redbox is arguing that it's doing nothing illegal itself and that Disney is lying about the latter's ability to re-sell its products. And while a reduced selection for Redbox would hurt the company, it would end up hurting consumers more than anyone.
Both companies have reason to protect their own properties. Disney is really hyping up its own streaming service, which could also include thousands of ABC shows, as well as its massive Fox acquisition. And Redbox is just getting its own on-demand product off the ground itself. Each suit will come down to whether the courts rule for or against Redbox's re-selling of digital Disney products. So if it rules in Disney's favor, perhaps their recent behavior with Redbox won't matter.