Redbox is facing a lawsuit from Disney for selling digital download codes to the studio’s films, The Wall Street Journal reports. Redbox is well-known for renting physical DVDs and Blu-rays. The company started this new practice last month where they offer customers the ability to purchase printouts of codes to movies like Rogue One: A Star Wars Story and Moana at their kiosks. In addition to selling, the bigger issue here is that the prices are set far below digital retailers like iTunes and Google Play Store.
In a statement to Variety, Disney said that “Redbox is selling our digital movie codes in blatant disregard of clear prohibitions against doing so.” Furthermore, “Their actions violate our contracts and copyrights, and we have filed this action to stop Redbox’s unauthorized conduct.”
Redbox has been most known for their physical DVD renting business. The company has distribution deals with major studios like Lionsgate, 20th Century Fox, and Warner Bros. that allow them to rent out films soon after they’re released. Disney, however, doesn’t have any deal in place with Redbox, which is why Redbox has to purchase retail copies of Disney’s titles.
Disney is known to bundle digital download codes with purchases, allowing customers to download a digital version. For example, if you buy the Blu-ray version of The Avengers, you will get a digital code that allows you to download the digital version of the movie. The issue for Redbox here is that Redbox is selling those codes directly o customers, even though there’s language that states digital codes are “not for sale or transfer,” as pointed out by Journal.
Disney is seeking for profits of sales of the codes up to $150,000 per title. In addition, the company is seeking an injunction to prevent Redbox from selling digital codes in the future. Right now though, as of this writing, codes are still available for purchase.