Thursday, August 20, 2009

Redbox sues Warner Home Video over DVD distribution

NEW YORK (Reuters) – Coinstar Inc's Redbox said on Wednesday that it sued Warner Home Video over new distribution terms that the Time Warner Inc unit imposed on the automatic DVD rental kiosk service.

Redbox said it filed the lawsuit in Delaware federal court on Tuesday to dispute Warner Home Video terms that bar Redbox from renting out its movies until at least 28 days after public release.

A Warner Home Video representative was not immediately available for a comment.

Redbox, which is battling multiple video providers over its DVD distribution service, said it would continue offering people access to all major new releases, including from Warner Home Video.

Some Hollywood studios have accused Redbox, which operates more than 15,000 bright red rental kiosks across the country, of depressing DVD prices and depriving studios of the kinds of revenue-sharing options they have with traditional video rental chains like Blockbuster.

Redbox previously said a U.S. district court denied a motion by Universal Studios Home Entertainment to dismiss Redbox's antitrust case. Universal is 80 percent owned by General Electric Co and 20 percent by Vivendi.

It also sued News Corp's Twentieth Century Fox for trying to stop it from renting out films on the day of retail release. It has distribution deals with Lions Gate Entertainment Corp and Sony Corp's Sony Pictures Home Entertainment.

Warner Home Video has the largest distribution infrastructure in the global video marketplace. It said that it would deal directly with mail-order rental services and kiosks, a move that was seen as delaying the availability of its titles at kiosks.

Coinstar shares were up 3 cents at $31.26 in afternoon trading on Nasdaq while Time Warner shares were up 61 cents or almost 2 percent, at $33.68.

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