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Disney loses bid to stop Redbox from selling its digital download codes
- NKCSS 9y agoThere's the downside to litigation like this. Loads of people who've never heard of RedBox (like me), now do and have a cheap alternative for Disney movies.
- Libturd 9y agonever heard of redbox? did you just wake from a 15 year coma?
- taspeotis 9y agohttps://en.wikipedia.org/wiki/Streisand_effect https://en.wikipedia.org/wiki/Streisand_effect
- whoisjuan 9y agoWow I'm surprised that you didn't know about RedBox. I have seen their kiosks in almost every major supermarket for years.
- NKCSS 9y agoI'm not from the states :) (.nl here)
- whoisjuan 9y agoOhh! Gotcha. That makes sense.
- Buge 9y agoI've heard of Redbox, but didn't hear about these codes.
- adventured 9y agoSame here. I occasionally rent movies from Redbox and I wasn't aware of the codes. They're typically far cheaper than renting from Amazon. Sometimes I'll find a relatively newly released movie that I want to watch, and Amazon will want $5.99 to rent it (eg Blade Runner), versus ~$2.12 for the blu ray from Redbox. Amazon's digital rental prices are semi obnoxious at times; Alien Covenant is an ok movie that has been out on disc for a while, Amazon still wants $5.99 to rent it, you can buy the used blu ray from Redbox for $4.23 or rent it for half that. I have a box not far from my house, so I'll just grab the disc while out doing something else.
- aidenn0 9y agoAlso it's very common that getting the CD from amazon is cheaper than the $9.99 that they charge for albums. This is double crazy when you realize that buying many (most?) CDs on amazon cause the MP3s to be added to your amazon account as well.
- edpazu 9y agoYour local library might have those for free.
- sib 9y agoAs a note, it's not Amazon deciding to make the rental price "obnoxious" to take high margins - it's driven by the wholesale prices that they are charged by content licensors for digital rentals. (I know, this fact doesn't make the digital rental any cheaper...)
- JustSomeNobody 9y agoUntil Disney decides to take their ball and go home.
- oddevan 9y agoThat's kinda the point of the lawsuit: they can't. Redbox is buying Disney movies at retail. The only way for Disney to stop Redbox from doing what they're doing is to stop selling physical copies of movies.
- lotsofpulp 9y agoI can see that happening in the next few decades. Once sufficient amount of people have reliable access to internet, the physical option can be dropped completely.
- gshubert17 9y agoAt least, physical copies with codes.
- JustSomeNobody 9y agoThey are working on their own streaming service so they could stop selling retail copies. I'll admit this won't happen in the next 5 years (depending on the success of their streaming service). They can stop selling the retail copies with the code included. That would pinch off Redbox, but upset customers. They could stop offering download codes and instead allow people to register their retail copy to the streaming service with a copy of their receipt. Again, not very consumer friendly, but Disney is big enough to possibly get away with it.
- Sargos 9y agoWhich ends up hurting us (the consumers) in the end. I will be sad to see digital download codes go the way of the dodo so some corporate fat cat at Redbox can double dip into their profits.
- throwaway2048 9y ago
- Groxx 9y ago>But in a Tuesday ruling, US District Judge Dean D. Pregerson denied the studio’s request for an injunction, arguing that the warning that “Codes are not for sale or transfer” on the DVD and Blu-ray packaging did not constitute a binding contract. Furthermore, he wrote that the licensing agreements that Disney utilizes on the Movies Anywhere and RedeemDigitalMovie websites improperly forced consumers to give up some of their basic ownership rights. Well now. That's quite a nice result. I wonder how well this will extend into other "basic ownership rights" in other digital fields.
- stryk 9y agoCould this have positive ripple effects into the right to repair as well? that would be nice
- zakk 9y agoI think that’s a lost cause, sadly. The manufacturer can and will make the device more and more difficult to tear apart, and less modular. This can partly be a design choice, but also affects the possibility of repairing... Still, I am not a lawyer but I don’t see how a judge could enforce internal design choices...
- jacobush 9y agoStill, it's one thing to make a device hard to repair - it's another to bring state enforced penalties against people who decide to nevertheless tinker.
- rangibaby 9y ago> The manufacturer can and will make the device more and more difficult to tear apart The company built the thing. There are tools, parts, and instructions that tell someone how to put it together. There are also tools, parts, and instructions that tell someone how to take it apart. It may require special tools and parts, but for any mass-market item it won't be difficult with the right tools and the knowledge of how to do it. The reason for this is that the company will lose more money by making it difficult to repair for themselves than they will ever lose to a DIY repairman. My solution for DIY repairs: - Official, real service manual made available. If you allow the company to provide a "monkey" version they certainly will. - All neccesary parts and tools available at cost, or the cost of their generic equivalent in case of things like proprietary screwdrivers etc.
- comex 9y agoAnd here's the full ruling, since (as usual for news sites) The Verge didn't bother to attach a copy: https://drop.qoid.us/031127591204.pdf https://drop.qoid.us/031127591204.pdf edit: actually, The Verge's article links to a Hollywood Reporter article as its source, which does have a copy. So I should have looked harder. Still...
- spike021 9y agoSlightly off-topic but The Verge hasn't been thorough for years.. Unfortunate since at the very beginning I thought they knew what they were doing. Thanks for linking that, comex.
- PascLeRasc 9y agoI thought that for a long time too but recently I've been impressed by their research articles, like: https://www.theverge.com/2017/10/10/16447264/prison-hacker-recycled-computer-fraud-ohio-marion-transkiy https://www.theverge.com/2017/10/10/16447264/prison-hacker-r... https://www.theverge.com/2017/6/13/15782200/one-device-secret-history-iphone-brian-merchant-book-excerpt https://www.theverge.com/2017/6/13/15782200/one-device-secre... And their coverage of the Waymo lawsuit was great too. I think they just have a few subpar writers.
- Scaevolus 9y agoDisney only lost the preliminary injunction. Redbox can continue to sell codes pending the completion of the full trial (plus appeals, if Disney loses).
- nikanj 9y agoThis case will go on until Redbox goes bankrupt, settles, or is bought by Disney. Lords, even IBM vs SCO is still going strong. Huge cases like this just never really end, a curious feature of the US legal system.
- adrianN 9y agoIt's only a failure if you're not a lawyer.
- josteink 9y agoThe legal system was designed by lawyers. Obviously it works for them.
- falcolas 9y agoI see it as going in the opposite direction. Laws created lawyers, much like processor op codes created computer programmers. It's a specialization that not many people are in, yet which is in high demand.
- _d8fd 9y agoIf there's one lawyer in town, they drive a Chevrolet. If there are two lawyers in town, they both drive Cadillacs.
- loceng 9y agoMy mind instantly jumped to comparing to Bitcoin and other crypto-assets structured to be incentivized like Ponzi-Pyramid schemes.
- antiterra 9y ago
- NKCSS 9y agoTried to visit redbox.com, but get an access denied: https://imgur.com/a/QoVUJ https://imgur.com/a/QoVUJ > Access Denied You don't have permission to access "http://www.redbox.com/" http://www.redbox.com/" on this server. Reference #18.18a9645f.1519288990.4e3b07
- qilo 9y agoI think it's because you are probably visiting the site not from US, because I'm not from US too, and was never able to visit redbox.com since the first time I read about this dispute with Disney.
- felipelemos 9y agoExactly. It's the basic Akamai error for: Your IP range are blacklisted, and it's probably because you are visiting from outside of US.
- wj 9y agoI get that on a lot of sites when I use Private Internet Access even from a US endpoint.
- donarb 9y agoRedbox offers digital movie streaming in addition to having rental kiosks. So VPN and non US access is probably restricted.
- Buge 9y agoLooking at Redbox's website, it looks like you have to buy a physical thing containing the code and pick it up at the box. I assume directly telling you the code digitally would be more legally troubling.
- ROFISH 9y agoThey shuck thousands of videos bought at hundreds box stores. It’s just faster and easier to put the code slip in the machine the same time as the disc rather than type all the codes by hand and maybe get it wrong. Bonus points for that slip having redemption instructions.
- adanto6840 9y agoThe order explicitly rejected RedBox's argument that they're "merely selling a piece of paper" -- the judge basically said the paper and the code printed on it has zero value, the value is entirely in the fact that the code unlocked the copyrighted material. As such, it'd presumably be identical to sell the codes digitally vs physically, in the court's eyes.
- mlazos 9y agoSo how does RedBox actually sell the code for such a discount and make profit? Is it because when they buy the physical copy they essentially get two copies? (One physical and one digital) and then they rent the physical one and make profit from that?
- mfrommil 9y agoLet's assume redbox buys a single bluray for $20, and there's rental demand for each movie for 1 year. If variable cost = $1/physical disc per month, then redbox profit per disc would be something like: P = (# of rentals * $1) - $32 where $32 = the $20 disc cost + monthly var cost If redbox rents the movie once per week, their per disc annual profit is $20 But, if redbox can now sell the virtual download code for $8 online (essentially $0 variable cost for holding digital inventory), and digital sales has little impact on physical rentals, then the equation would be: P = (# of rentals * $1) - $32 + $8 With annual profit per disc in the 1x/wk rental case now $28, or a 40% gross margin increase. All #s are just napkin math/assumptions, but it's easy to see the benefit here for redbox.
- jstanley 9y agoYou didn't need to go through all that maths. The easy answer is "they get more money if they sell the code as well as the disc, instead of just selling the disc".
- cheeze 9y agoAll I could think when I read that response was "thanks, but you're not Tyler Durden"
- jermaustin1 9y agoThe license on the Bluray and DVDs that RedBox buys (Rental Licensed) typically require paying out royalties from the rental fee. As with all royalties, these are negotiated, but I have heard from people who ran their own DVD rental store fronts (when that was still a thing) that they could be as much as $5 per rental on. Also the disk is usually a LOT more expensive (up to $100 for a new blockbuster release). DVD store fronts were already so low margin, it didn't take much disruption before they started to go under.
- mholt 9y ago> The case results from Redbox’s lack of an existing business arrangement with Disney. The rental service has distribution deals in place with major studios like Warner Bros., which allow Redbox to purchase physical DVDs and Blu-rays of popular movies that it then offers for rental at its standalone kiosks. Disney has struck no such deal, so Redbox purchases retail copies of the films and rents those discs, instead. That's basically what VidAngel did -- a physical retail copy for each simultaneous rental -- but the courts shut VidAngel down.
- dragonwriter 9y agoNo, it's not what VidAngel did; VidAngel bought and ripped DVDs, Redbox buys DVDs and rents the DVDs it buys, which is unmistakably protected under the First Sale doctrine (the sale of the digital download codes that are sold with the physical media was disputed, but renting the physical media is non-controversial.) Also, the courts didn't shut VidAngel down; VidAngel is still in operation—for a while apparently defying court orders, now using a different mechanism to achieve a similar effect, though also excluding movies from the studios which sued it.
- TorKlingberg 9y agoRedbox rents out the physical disc. VidAngel tried to claim having DVDs gave them the right to stream to send one stream per disc. Sort of like Aereo's arrays of tiny antennas, that didn't hold up in court either.
- mankash666 9y agoAny lawyers here? This doesn't seem fair - retail copies were meant for end consumers, not for another company to hawk and rent out. The Crux of the legal argument lies in equating Redbox to a regular end-consumer, which is inaccurate. Can any lawyers comment on this.
- jtuente 9y agoFirst sale doctrine - Red Box is selling it to renters who can easily sell it back to Red Box for a slightly lower price (rental fee). i.e. Red Box sells you "Captain America" for $25, you then sell your copy back to Red Box for $25 - $1.50 per day you owned it, so 3 days later it's $20.50, the rental fee being $4.50. But you only ever end up paying the difference because of tax laws.
- kodablah 9y agoAside from actual first sale doctrine and the like, morally, I am curious what doesn't seem fair about not discriminating against how the purchaser uses what they bought? What doesn't seem fair is you getting to say what your product was meant for and keeping others with other potential uses from purchasing/using.
- criddell 9y ago> retail copies were meant for end consumers, not for another company to hawk and rent out What's the difference? If I buy a hammer at Home Depot, is there any question that I can rent or loan it to somebody else? Why should intellectual property be any different?
- mankash666 9y agoBecause: 1. Hammers cannot be trivially cloned and mass ditributed digitally for free 2. Every hammer is the same, while every new digital creation (not copy) is possibly the blood , sweat & tears of hundreds of people whose sole source of living is the creation of digital content. HN has an aversion to DRM & paying for soft goods. I'm assuming you're a software developer. How would you like your creation to be ruthlessly copied and mass distributed, killing the potential revenues it would have brought you, and in extreme cases driving you out of business?
- _justinfunk 9y agoMy initial response was that Disney should have won this. It seems to me that Disney gets to control the distribution of it's copyrighted materials. They bundle a physical and digital version of the movie. So, 1 purchase = 1 "household" can watch the media privately. What Redbox is doing is constituting 1 purchase = 2 households can watch the media privately (the renter of the DVD and the purchaser of the code). I'm not an expert on the First Sale Doctrine, but it seems like the end result is that Disney would sell fewer copies of it's content (i.e. damages) in respect to RedBox's actions. (not a lawyer)
- Tactic 9y agoWhen you purchase something you have the right to resell it. You aren't purchasing a license, you are purchasing an item, in this case two items: a DVD and a Digital Copy. So just like if I buy a living room set I can now sell the couch and the chair separately. Disney wants to treat the sticker as a legal license. I too, am not a lawyer, but I think they are on shaky ground.
- neuland 9y agoI'm also not a lawyer. But, isn't digital ownership more complex than that (if they were to have a better contract)? I don't think you can re-sell your iTunes library or transfer it to a friend. Though, I'll agree that you should be able to transfer digital goods. Audible supports this for example.
- opencl 9y agoI think the key point here is that Redbox did not buy a digital license from Disney. They bought a box with a DVD and a piece of paper with a code that can be redeemed for a digital license. They rent out the DVD and sell the piece of paper. Both of these are allowed under the first sale doctrine. Disney tried to tack on additional conditions to using the code on the piece of paper which the judge called "improper leveraging of Disney’s copyright in the digital content to restrict secondary transfers of physical copies".
- mankash666 9y agoHN has an illogical aversion to anything DRM. This particular case is harmful to anyone producing digital good (apps, music, movies, blogs, etc). Let's understand this really damaging verdict by using an app as an example. 1. Disney puts out an app that can either be bought as a disk at Walmart or as a download on the app store 2. A third party app store that doesn't have a re-seller/partner agreement with Disney buys a disk, and claims that the legal purchase of the disk now entitles it to re-distribute the app as it deems fit, including selling DIGITAL copies of the app on it's own app store. Does this seem logical or fair to you guys? The logical fallacy here is in equating the third-party app store to a regular end-user. Additionally, the third-party app store selling the app digitally is equivalent to Spotify streaming content it hasn't licensed under the guise of owning CDs of the said content. This is wrong and dangerous for the digital economy. If this verdict holds, I should be able to buy MP3s off iTunes and "rent" it to whom-so-ever I want!!
- CaptSpify 9y agoI'd say the logical disconnect is the idea that we should charge for digital goods after they are already made. The costs to duplicate digital goods are so low that they should be treated as free.
- mankash666 9y agoNo - there's ZERO logic in selling items as a function of the cost of creation or distribution. Pricing has everything to do with the VALUE it offers customers versus the cost that it takes to create it!!
- CaptSpify 9y agoThat's an outdated way of thinking about goods and services, and it's why things like piracy are doing so well. Good luck with that.
- mankash666 9y agoAnother logical fallacy! Piracy is doing so damn well because the cost and convenience of pirating digital goods is effectively zero. Not because "offering value" is going out of style!