Redbox Says Fox Is Trying to Kill It

(CN) - Redbox, the DVD kiosk rental giant, says Twentieth Century Fox is trying to kill its business by cutting off the supply of DVDs because Redbox refused to agree to a 30-day "blackout period," during which it will withhold new releases. In its antitrust complaint in Delaware Federal Court, Redbox claims Fox is conducting an illegal boycott in restraint of trade.

Redbox says Fox ordered its distributors, Ingram Entertainment and Video Product Distribution, to cut Redbox off.

Redbox Automated Retail offers $1 per day DVD rentals through self-service kiosks that have become ubiquitous in grocery stores and other outlets. Redbox says it operates 17,000 self-service kiosks around the country.

Agreeing to Fox's demand would devastate it business, Redbox says, since it rents most of its movies within two weeks of their release on DVD.

In remarkably self-serving language written in high dudgeon, Redbox cites "tough economic times," during which "people simply need some form of release from their financial pressures, even if just for a couple of hours." Redbox says it provides this through its cheap movies, but Fox demands a "business-killing blackout period ... during which consumers would be allowed to procure these DVDs only through more expensive channels ... despite the fact that consumers are being battered by one of the toughest economic recessions in history."

Redbox sued Universal Studios in a similar antitrust complaint in October 2008. Also that month, Redbox sued another DVD rental kiosk operator, DVDPlay, claiming it violated Redbox's patented rental system.

Redbox says Fox is abusing copyright, tortiously interfering with contract and violating antitrust law. It seeks an injunction, damages and costs.

Redbox is represented by Henry Gallagher Jr. with Connolly Bove.

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