004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 38
CHUCK TRYON
R E D BOX VS. R E D E NVE LO P E, O R WHAT HAP P E N S
WH E N TH E I N F I N ITE AI S LE SWI N GS TH RO U G H
TH E G RO C E RY STO R E
Résumé: La recherche académique récente ainsi que les analystes de l’industrie ont
mis l’accent sur le rôle de ce que Chris Anderson a appelé la « longue traîne » pour
désigner une distribution qui donne un accès plus large à ce qui apparaît être une
sélection illimitée de films, modèle qu’on associe à Netflix. Néanmoins, en dépit de
l’accès à un catalogue plus vaste, plusieurs consommateurs des États-Unis semblent
avoir opté pour Redbox, une chaîne de kiosques où l’on peut louer des films à bas prix
à partir d’une sélection restreinte. Parce que Redbox a contribué à la transformation
du système de location et de vente de films en DVD, cette entreprise représente
un défi significatif auquel doivent faire face les studios dans leurs tentatives
pour contrôler la consommation de DVD, faisant en sorte que ces derniers et les
détaillants ont dû réévaluer les potentiels de marché véritables lorsque les films
deviennent disponibles sur de multiples supports, que ce soit en salle traditionnelle,
sur DVD ou par la lecture vidéo en transit de données. Cet article défend l’idée que
nous devons procéder à un examen plus attentif des pratiques, habitudes et technologies qui donnent forme à la distribution de films pour comprendre quelques
pratiques plus prosaïques qui sont associées à la culture filmique de tous les jours.
O
ver the last decade, entertainment journalists and media executives have
been anticipating the digital delivery of movies directly into the home, often
with a mixture of excitement and concern. For example, New York Times film
critic A. O. Scott, remarking on the unlimited bandwidth that made storing and
downloading movies inexpensive and easy, predicted that “before too long the
entire surviving history of movies will be open for browsing and sampling at the
click of a mouse for a few PayPal dollars.”1 Although the digital delivery of
movies seems to democratize access to a wide array of movies, it also threatens
to disrupt some of the traditional ways in which studios have been able to produce revenue, especially after a film leaves theaters. Due to these changes, movie
audiences seeking a night’s entertainment face a variety of choices, both in terms
of the sheer number of films available from so-called “long tail” services such as
Netflix and iTunes and in terms of the variety of formats available to screen those
films. Meanwhile, TV audiences, seemingly freed from the broadcast schedule,
CANADIAN JOURNAL OF FILM STUDIES • REVUE CANADIENNE D’ÉTUDES CINÉMATOGRAPHIQUES
VOLUME 20 NO. 2 • FALL • AUTOMNE 2011 • pp 38-54
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 39
time-shift through online aggregators such as Hulu and iTunes, or through their
DVRs, which have deepened a process established by VCRs and extended by box
sets of TV shows.2 In this context, digital distribution becomes identified not only
with ubiquitous access to movies and TV shows but also with unprecedented
choice, both in terms of content and platform.
Despite these seemingly unlimited options, one of the most popular ways to
rent movies for home viewing in the United States, Redbox, provides users with
a much narrower selection of movies. At the same time, Redbox, like Netflix,
helps to upset prevailing distribution patterns that have dominated more or less
since the early days of home video. These changing rental practices bring into
relief some of the challenges associated with digital distribution, specifically the
attempt by distributors to control the consumption of movies and TV shows in
order to be as profitable as possible.3 Thus, rather than focusing on the rhetoric
of consumer choice, this essay seeks to make sense of the ways in which the
practices of movie distribution are being redefined, often in ways that may
restrict, rather than open up, when and where a film is available. Underlying
these changes is a transformation of the value of the film text itself. Due to the
cheap rentals offered by Redbox and the inexpensive access to streaming video
promoted by Netflix, the expected cost of watching a movie has begun to shift,
especially for movies that may be viewed only once or twice and for viewers who
may not be drawn to consume DVD special features or collecting physical DVDs.
While tech-savvy cinephiles may opt for high-quality streaming services
such as Mubi (formerly The Auteurs) or Netflix, families and individuals seeking
inexpensive entertainment have been turning to kiosk services, of which Redbox
is the most successful American example. Both practices are part of an emerging
“everyday film culture” that encompasses a range of activities, values, beliefs,
and perceptions about the role of entertainment in everyday life and its relationship to financial costs. In response to the potential for ubiquitous and inexpensive
access to motion picture entertainment, movie studios have sought to regulate
how, when, and where audiences can access movies. These changes are consistent
with what Ted Striphas has described as a “society of controlled consumption,”
in which consumer behavior is directed and regulated by media industry forces
seeking to protect the profitability of their movie franchises and include mechanisms ranging from copyright law to distribution windows.4 As Striphas notes,
the processes of controlled consumption are consistently being renegotiated
within the media industries, as trade organizations such as the recording industry
and the television industry have sought to shape audience practices by limiting and
directing where and when consumption might take place. Thus, although this essay
focuses primarily on the film industry, the shifts addressed are symptomatic
of wider changes in media distribution. As a result, instead of unlimited and universal access that is often celebrated as the future for popular entertainment, media
REDBOX VS. RED ENVELOPE
39
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 40
conglomerates seek to create a carefully calibrated distribution system that offers
multiple access points (theaters, DVDs, cable, streaming video, pay-per-view) and a
variety of price options that can shift and change unexpectedly.
Therefore, when Redbox’s cheap rentals challenged studio control over the
distribution process, questions about when and where audiences watch movies
came to the forefront. In order to make sense of these changes, this essay begins
by examining the depiction of Netflix and Redbox within entertainment discourse. Although digital delivery systems are often understood as technologies,
it is crucial to recognize that these tools are shaped by an assemblage of promotional, marketing, and legal discourses that condition their use. I then consider the ongoing court hearings and negotiations that took place between
studios and both Netflix and Redbox. These negotiations took place over the
course of several months in 2009 and 2010, and although it would be premature
to argue that a new distribution model has been established, it is clear that the
film industry is continuing to negotiate the broader processes of controlled consumption, redesigning their distribution windows for the digital age. Studio
attempts to negotiate with Redbox and Netflix illustrate quite clearly the industrial
stakes associated with the rental and sales of filmed programming, especially in
the United States, although these changes have begun shaping distribution practices in other countries, as the launch of the Movie Magic and Best Buy kiosk
services in Canada illustrates. However, Redbox’s distribution model, which
emphasizes select new releases, primarily from major studios, rather than offering many “long tail” titles with small viewship for each film, raises questions
about the role of the DVD in promoting deeper engagements with film culture as
well as the historical role of the bricks-and-mortar video store in shaping cultural
taste. Further, the delays in adapting streaming and kiosk services outside the
United States point to some of the challenges associated with the shift to new
forms of digital delivery of movies.
DIGITAL CINEMA AND CONTROLLED CONSUMPTION
As former Lucasfilm, Paramount, and Universal executive Jeff Ulin reminds us,
“studios are financing and distribution machines.”5 Although many studios may
arrange for films to be produced, they are defined primarily by their capacity to
market and distribute movies with an eye toward generating the maximum possible profit. As Ulin points out, this entails, in part, maintaining control over their
various intellectual properties and dividing up those rights as carefully as possible
as a movie circulates through a variety of channels and screens throughout the
globe. Distributors will protect the rights to show movies, carefully delineating
the “windows” or segments when a movie might be available in a given format.6
This cycle typically consists of a theatrical release followed by pay-per-view (PPV)
access at hotels, home video, domestic video-on-demand (VOD), and eventually
premium cable and broadcast television access. More recently, however, inex-
40 CHUCK TRYON
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 41
pensive streaming video and digital downloads of movies have clashed with the
attempts to preserve the periods of exclusivity associated with each window, a
process that has been complicated even further by the cheap DVD rentals associated with Redbox.
One of the biggest changes associated with the popularization of Redbox
and Netflix is the transformation of the current “window” structure that shapes
the current theatrical and DVD distribution system. Historically, windows have
served to protect the financial interests of studios during a film’s circulation
through various sites. As Jeff Ulin observes, “distribution is all about maximizing
discrete periods of exclusivity.”7 When VHS first emerged as a movie rental platform, studios and theater owners worried that it would cannibalize box office,
with customers choosing to stay at home and rent videos, rather than going to
theaters. Film distributors addressed this problem by creating a “window”
between theatrical and video release dates, eventually arriving at a six-month
period in the early 1980s after experimenting with windows ranging from several
weeks to several years.8 However, as Edward Jay Epstein carefully documents,
with the introduction of the DVD in the 1990s and the related emphasis on sales
rather than rental, that window began to narrow, in part because media conglomerates wanted to have summer blockbusters released to theaters in June and
July on the shelves in DVD format in time for the winter holidays. The studios
and theaters established what amounts to a four-month window.9 Recognizing
the opportunity to profit from their film libraries, including older classics, media
conglomerates focused on a sell-through strategy that used low retail prices to
promote purchasing, a practice reinforced when many retailers sold DVDs at a
loss in order to draw customers into their stores to purchase more expensive—
and profitable—items.10 DVDs, much more than videotapes, were marketed as
collectibles, and thanks to the regular inclusion of extras such as commentary
tracks and making-of documentaries, the format positioned movie audiences as
film buffs and students learning from Hollywood masters.
These changes in the window system have attracted attention from a range
of media and entertainment journalists. Edward Jay Epstein, noting the continued
trend toward shortening the DVD window, wonders, “Does any barrier, no less a
fragile window, make sense in the quest for the couch potato in an increasingly
digital age?”11 By the same logic, industry observers such as Chris Anderson have
discussed the “long tail,” which involves the almost mythological premise that
the “future” of media distribution lies not in selling (or renting) massive quantities
of a few centralized “hits” but in selling small numbers of marginal texts to increasingly fragmented and specialized niche markets. Anderson’s arguments quickly
took on the appearance of industry common sense. With the rise in Netflix and the
decline of bricks-and-mortar video stores such as Blockbuster, not to mention the
success of other online retailers such as Amazon and iTunes, viewers have access
to a wider range of content. Rental services such as Netflix provide film buffs
REDBOX VS. RED ENVELOPE
41
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 42
with a seemingly unlimited array of movie choices, many dutifully sent through
the mail in little red envelopes that helped establish the company’s brand. More
recently Netflix has placed more emphasis on digital delivery through their
Watch Now Player for laptops and a set-top box that allows viewers to stream
movies directly to their TV sets. It is worth noting, however, that the company
anticipates that DVD-by-mail shipments will continue to grow before peaking in
2013, followed by a gradual decline over the next two decades as Netflix secures
rights to more streaming content, suggesting that the DVD remains a crucial site
where audiences encounter movies, despite perceptions that it has been supplanted by digital delivery.12 But the streaming service continues to offer a limited
catalog compared to the DVD-by-mail service. The streaming service was further
limited by bandwidth caps that implicitly regulate how many movies viewers can
watch in a given month, especially over mobile devices. This problem has been
especially acute in Canada, where Netflix operates a streaming-only service. In
fact, Netflix was forced to implement lower-quality streaming versions of their
movies in order to help customers avoid exceeding costly fees due to exceeding
bandwidth caps. Although Shaw Cable eventually agreed to increase bandwidth
caps, a move that was seen largely as an attempt to accomodate Netflix customers,
these limitations on use help to challenge the perception of ubiquitous and inexpensive access to motion picture entertainment.13
By contrast, Redbox upsets the prevailing logic that consumers are seeking
unlimited choice, and through its emphasis on a small number of best-selling
titles, may offer an important limit case for discussions of the long tail as a model
for the future of retail and rental. In addition, it challenges some of our traditional assumptions about the place of the DVD in film culture, as more home
video consumers seem content to rent movies as cheaply and conveniently as
possible, rather than purchasing them for personal collections or making use of
digital downloads or streaming video. No matter what, the conflicts over Redbox
and Netflix are simply two of the more visible expressions not only of the shifting
value of the film object but also of the attempts to control how, when, and where
that content will be distributed, or what film journalist David Poland bluntly
refers to as “the battle...about who owns the rights to deliver what content via
what delivery systems.”14
These changes in DVD culture may also be caught up in some of the more
prosaic uses of DVDs and other forms of movie consumption in the home. While
a large body of scholarship focuses on the relationship between cinephilia, fandom, and DVD special features, this work often neglects other uses of DVDs as
a form of casual entertainment.15 For example, Barbara Klinger has traced the role
of DVD supplemental features in creating “a rhetoric of intimacy” between the
makers of a movie and the implied viewer for most special features.16 Klinger
argues that these extras contribute to “the sense of owning a personalized product,” feeding into the promotion of the DVD as a collectible artifact, a prospect
42 CHUCK TRYON
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 43
that may be less enticing for audiences who can cheaply access content online,
by mail, or via kiosks.17 In addition, as Catherine Grant observes, DVD extras
help to foster auteurist readings of films that emphasize the work of individual
artists rather than seeing them as commercial products.18 Although these uses of
DVD are significant, this focus on DVD supplemental features often neglects
some of the more common uses of DVDs, particularly their role as a form of inexpensive entertainment, especially for families with small children seeking an
“electronic babysitter.” In fact, as Jeff Ulin observes, the rise of sell-through DVD
market in the 1990s was fueled by videos geared toward children more than any
other factor, while industry observer Edward Jay Epstein confirms that child- and
youth-oriented films are an essential part of Hollywood’s “Midas formula.”19
Thus, we should consider DVDs not just in terms of the supplemental features
found on the disc itself but also in terms of how the DVD circulates. By focusing
on the ascent of Redbox and Netflix, we can address not only the transformed
stature of the video store and the apparent decline in DVD retail, but also the
changing habits, values, and beliefs that accompany these shifts and their implications for a distribution system in which the value of the movie and television
text has been redefined.
CLOSING THE WINDOW ON THE BRICKS-AND-MORTAR VIDEO STORE
Redbox is an inexpensive video-rental service, with DVDs usually priced at one
dollar per day, consisting of kiosks prominently situated in the front of grocery
stores, gas stations, airports, and other convenient locations. Due to the service’s
focus on convenience and low prices, and due to a simultaneous decline in DVD
sales, Redbox has contributed to a changing distribution culture, one that has
Hollywood studios, big box retailers, and bricks-and-mortar video stores scrambling to adjust to its radically, somewhat counter-intuitive, different business
model. In addition to offering inexpensive nightly rentals, Redbox has also built
quite a bit of popularity through the use of promotional codes that provide customers with a free one-day rental of the movie of their choice, a move that helps
contribute to the perception that viewing DVDs at home should be relatively
cheap. This discount approach has helped weaken even further traditional
bricks-and-mortar video store chains such as Blockbuster, Movie Gallery, and
Hollywood Video, and exacerbate decreasing DVD sales revenue streams for the
major studios. Although there have been other attempts to replicate Redbox’s
success with kiosks, including the Blockbuster Express service found in many
grocery stores in the United States, Redbox has come to be associated with the
practices of convenient, low-cost movie consumption.
The growth of Redbox became one of the biggest stories in the entertainment press in 2009 and 2010. By August 2010, there were approximately 25,000
Redbox kiosks throughout the US offering customers access to a comparatively
small selections of films, and by April 2011, there were 36,000 kiosks, with each
REDBOX VS. RED ENVELOPE
43
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 44
Redbox kiosk in the lobby of a Holly Springs, NC grocery store.
kiosk estimated to draw in approximately $40,000 annually.20 Usually most
kiosks hold approximately 200 titles, and a total of about 700 DVDs, which is far
smaller than the selection at either a bricks-and-mortar store or an online rental
service. The vast majority of these films are new DVD releases from major studios rather than the more obscure “long tail” titles that are typically associated
with digital distribution. In addition, Redbox customers are able to return their
movies to the kiosk of their choice, thus deepening Redbox’s relationship to the
discourses of mobility and convenience. With these features, and despite offering a small number of films, Redbox has placed many of their rivals at a huge
competitive disadvantage. Blockbuster Video, for example, in early 2010 made
plans to close up to 1,300 stores and twice announced plans to file for bankruptcy, first in March 2010 and again in August 2010, before it was purchased by
the Dish Network in early 2011, which intends to use Blockbuster’s DVD-by-mail
44 CHUCK TRYON
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 45
service as an enticement to encourage people to subscribe to Dish’s satellite TV
service.21 In February 2010, Movie Gallery, the second largest video chain in the
US and owner of Hollywood Video, declared Chapter 11 bankruptcy. Cited in the
filing was a statement that Redbox was “cannibalizing” business from traditional video stores. In fact, by May 2010, Movie Gallery announced that it would
close its remaining 2,415 stores.22 With Redbox accounting for 30% of all rentals
by August 2010, after comprising only 19% of the market the year before, they
presented a significant challenge to traditional rental practices. Despite the widely
reported struggles of bricks-and-mortar video stores, DVD rentals rose 8.3%
during the first six months of 2009, while sales dropped 13%, numbers that
industry observers attributed to saturated film libraries—most collectors now
own an average of 70 DVDs—and to a struggling economy.23 These numbers
have led to speculation by the Los Angeles County Economic Development
Corporation that Redbox had cost the industry as much as $1 billion, both in lost
profits from “lost” DVD sales and from producers who are reluctant to make
movies based on their assessment of a film’s profitability, leading to less work
for the Hollywood region’s below-the-line workers.24 Although it is less than
clear whether such as ripple effect is verifiable, or whether Redbox can be identified as a primary factor, the study itself illustrates the degree to which Redbox
may be contributing to the ongoing industry crisis over declining DVD revenues
and over the ongoing attempts to control the distribution process.
REFRAMING DVD AUDIENCES
Redbox’s approach to DVD rentals can be usefully compared to the approach
used by services such as Netflix, GreenCine, iTunes, and Mubi. DVD-by-mail outfits, such as Netflix and GreenCine, have become a relatively common feature on
the entertainment landscape. Netflix originally gained its reputation through its
promise of nearly unlimited consumer choice, as well as the convenience of having
movies delivered to your mailbox. It became one of the most prominent case
studies in Chris Anderson’s discussion of the “long tail” because Netflix could
offer a much wider selection than bricks-and-mortar video stores could, typically
offering thousands of movies that would be unavailable at chain video stores.25
In addition, recommendation algorithms seem to be driving customers away
from the new releases toward older, more critically-acclaimed films, suggesting
that audiences, given the option, would be more likely to choose niche products
rather than more mainstream movies. Alongside of these recommendations—far
more accurate than those from the proverbial clerk behind the counter, we are
told—Netflix also offers the promise of not imposing fees for returning movies
after their due date because there is no need to circulate individual copies of
DVDs back onto the shelves. Similarly, streaming video rental service Mubi provides access to a range of canonical Hollywood, world cinema masterpieces and
cult favorites, positioning its customers as occupying the cutting edge techno-
REDBOX VS. RED ENVELOPE
45
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 46
logically while also having good taste in movies. This service cultivates a sense
of belonging to larger community of cinephiles, through what might be described
as a socially-networked form of cultural distinction.26 In essence, Netflix and
streaming services such as SnagFilms and Mubi offer an extension of the existing
logic of the DVD by making a wider range of content available and even by creating structures that direct attention away from top new releases into the deeper
catalog. Thus, Anderson and others have been able to portray these “long tail”
services as reinforcing an expansive film culture, one that offers us access not
only to a massive archive of films theoretically available anywhere, but also
entrance to a community of people with shared cinematic tastes.
Redbox complicates Anderson’s “long tail” hypothesis and similar claims
about the preference for unlimited choice. Their focus on convenience, affordability, and mainstream family fare seems consistent with Redbox’s perception
of its customer base. In an interview with Home Media Magazine, Redbox president Mitch Lowe describes the typical Redbox customers as “a family with small
children who’s renting a film for the parents and a film or two for the kids. They
are typically both working in the household and the kids are high school age or
younger.”27 Thus, instead of an emphasis on the deep catalog titles that might
satisfy the urbane, globalized moviegoer associated with Mubi, Redbox addresses working parents seeking inexpensive entertainment for their families, a crucial
audience that often goes unnoticed in utopian discussions of long tail cultural texts.
Although the logic behind Redbox seems straightforward, with much of its
technological infrastructure relatively invisible to consumers, it is worth noting
that the company’s business model is based upon a combination of technological
advances and social protocols, suggesting that media distribution practices may
only become viable when a “need” emerges. This technological aspect is underscored by Redbox president Mitch Lowe’s prior attempts to launch a vending
machine-based video rental service in the 1980s when widespread adoption of
VCRs was first taking place. Redbox’s current success benefits from improvements
in the ability to process credit card transactions quickly and securely, given that
the company now handles close to 80 transactions per second at peak times on
Friday nights, numbers that significantly exceed online retailers such as Amazon,
even during the winter holidays.28 Further, the Redbox ninjas, the workers who
stock and maintain kiosks, perform some maintenance work on them remotely
through wireless internet connections, using faster broadband speeds to supplement the rental process. Finally, in addition to walk-up transactions, users can also
reserve copies of a DVD from the Redbox website and find out which nearby
kiosks have a desired movie using Google Maps, although this focus on kiosks
may be complicated when Redbox launches its streaming service. This simplicity
and convenience allowed Redbox to fulfill what Diane Garrett refers to as an
“untapped need” that is not addressed solely by “technological innovations”
such as Blu-ray, high-definition, or the expansive catalogs made possible by
46 CHUCK TRYON
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 47
unlimited server space. Instead, Garrett argues, Redbox is an example of what
Clayton Christensen describes as a “disruptive innovation,” one that fulfills the
basic needs of a movie-watching consumer that is less interested in image quality or obscure movies.29 As a result, Redbox has taken the movie kiosk idea,
which has been around at least since 1982 when Lowe first experimented with the
idea before selling sixty machines in the United States and Japan in 1984, and
made it into a powerful and popular distribution tool.30
Significantly, the use of kiosks to distribute DVDs has been far more gradual
outside the United States. Beginning in May 2011, Playdium installed a limited
number of “Movie Magic” kiosks in convenience stores, Wal-Marts and other
retailers in the Toronto area, charging $2 per night and offering a selection of recent
films similar to that offered in a Redbox kiosk.31 In June 2011, the electronics
retailer Best Buy announced that they would launch a combined streaming video
and kiosk service in Canada, an approach that would combine Netflix’s “over-thetop” streaming model with the apparent convenience and simplicity of a service
such as Redbox.32 However, once again, the challenges for both Redbox and
Netflix may be tied to Netflix and other retailers working to acquire the streaming
rights to content. In particular, Netflix was criticized for failing to offer an adequate
selection of Canadian content, a situation that Best Buy claimed they would
avoid. In this sense, kiosks and streaming services illustrate that promises of
unlimited content choice must be carefully interrogated, especially when it
comes to providing access to local media.33 Further, given the limited number of
Movie Magic kiosks in Toronto, it is less than clear whether Movie Magic or Best
Buy will achieve the same type of success seen by Redbox.
THE OPENING OF THE RETAIL WINDOW
The changes in DVD distribution affect not only the consumption of movies at
home but the entire system of windows, including the duration of time during
which theaters have exclusive rights to show a movie. Due to declining DVD sales,
studios continue to consider shorter windows between theatrical and DVD release,
even when those windows threaten to undercut theatrical box office. This window
structure may be altered even further due to the box office success of Tim Burton’s
adaptation of Alice in Wonderland (2010) which Disney released on DVD just
three months after the film opened in theaters. This action took place despite
opposition from theater owners, which included threats of boycotts from several
theater chains, including the three in the United Kingdom (Odeon, Vue, and
Cineworld), as well as the Kansas City-based AMC theater chain.34 The conflict
over Alice in Wonderland echoed a similar struggle when several British theater
chains pulled the Ben Stiller film, Night at the Museum (Shawn Levy, 2006), when
Fox scheduled the DVD release just twelve weeks after the film initially appeared
in theaters.35 Both of these situations illustrate the degree to which the interests
of distributors, theater owners, and DVD retailers can come into conflict.
REDBOX VS. RED ENVELOPE
47
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 48
Redbox’s biggest challenge to the film industry, therefore, has been its ability to reshape how and when DVDs are distributed. Because Redbox unsettles
some existing revenue streams, media conglomerates and other players have
sought to regain control over the DVD distribution process. The attempt to limit
the effect of Redbox on DVD sales has been met with a series of fascinating, if
contradictory, responses by the movie conglomerates and big-box retailers like
Wal-Mart and Target. To respond, many of changes took place over the course of
a few months in late 2009 and early 2010, illustrating the extent to which the
interests of home video distributors and rental services may be in conflict.
The conflict between studios and Redbox began to pick up steam when
several studios, including 20th Century Fox, Warner Brothers, and Universal, all
refused to sell DVDs directly to the kiosk service until the DVD had been available for purchase via retail outlets for several weeks. In response, Redbox filed a
series of lawsuits, first against Universal in October 2008, with Redbox alleging,
according to Ryan Paul, that the studio was “engaging in anticompetitive behavior
and ... abusing copyright law.”36 In addition, Redbox alleged that Universal
sought to limit the selection of titles available for rental in the kiosks.
Specifically, Redbox complained that Universal was in violation of antitrust law,
claiming that it had threatened to cut off DVD wholesalers Ingram and VPD
unless Redbox agreed to Universal’s demands that the kiosk company wait 45
days after a DVD is released before renting it in their kiosks. Two of Redbox’s
suits against Universal were dismissed; however, the judge supported the company’s complaint on antitrust grounds. Later, in August 2009, Redbox filed suit
against Warner Home Video in Delaware Federal Court in response to Warner’s
attempt to block Redbox from distributing Warner titles. Given that Redbox
kiosks are stocked primarily with new releases, this imposed delay was seen as
potentially threatening their ability to compete with Netflix and other rivals in
the movie rental business.37
As Redbox continued to emerge as a key player, video wholesalers were discouraged from selling directly to Redbox, forcing the service to bypass studio blocks
by buying copies of movies directly from retailers such as Wal-Mart and Target. In
January 2010, however, Wal-Mart took the unusual step of limiting the number
of copies of individual DVDs that consumers could purchase, allowing them to
purchase a maximum of five copies of a DVD at a given time, mirroring an existing
policy already in place at Target stores. Although Wal-Mart stated publicly that the
policy was designed to ensure that the retailer would continue to have copies of
popular films in stock throughout the day, the move was speculated to be an
attempt to curtail the practice of Redbox employees buying out as many as twenty
copies of a newly-released DVD and then promptly going out to the Redbox kiosk
at the front of the store and stocking it with the movies purchased inside.38
This Wal-Mart blockade served as a temporary fix while studios negotiated
with Redbox. Sony, for example, negotiated a $460 million, five-year deal that gave
48 CHUCK TRYON
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 49
Blockbuster kiosk in front of a Holly Springs, NC, grocery store.
them a guaranteed 19.9% share in Redbox kiosks, while Paramount initially
reached a probationary deal with the company in exchange for rental data before
later agreeing to a revenue sharing pact in July 2010, concluding that the kiosks
had little impact on DVD sales.39 Lionsgate and Disney have also agreed to contracts with Redbox, while Warner Bros., Universal, and 20th Century Fox sought
to require that Redbox wait for one month after the DVD has been available for
purchase in stores before making it available to rent in kiosks. Eventually,
Warner and Redbox settled on a 28-day retail window that would allow the
major to sell DVDs before they became available in Redbox kiosks. In addition,
REDBOX VS. RED ENVELOPE
49
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 50
the agreement stipulates that once Redbox is done renting a DVD, it is legally
obligated to destroy it, rather than resell it. In late February 2010, Warner negotiated a similar deal with Netflix, stipulating a 28-day window in exchange for
cheaper DVD prices and assistance in providing more streaming titles from the
Warner catalog. Building on Redbox’s success, Blockbuster has begun dabbling in
rental kiosks, with the rental chain planning to have 3,000 kiosks, each holding
up to 1,000 films, by the end of 2009 and as many as 10,000 by December 2010,
many of them at Publix grocery stores. Blockbuster has an added advantage of
having earlier access to newly released DVDs than either Netflix or Redbox,
thanks to their contracts with studios. Given Blockbuster’s primary identity as a
bricks-and-mortar store, however, it is less than clear whether they will serve as
a viable alternative to Redbox or Netflix. The main point here is that studios, in
cooperation with Netflix and Redbox, have negotiated the creation of a retail
window, one that will temporarily limit access to renting new releases with the
hope that it will result in increased DVD sales at traditional retail outlets.
These changes in the windows system culminated in August 2010 when
Netflix announced a deal with a relatively unknown cable movie channel, Epix,
that provided the rental service with the rights to stream on-line new releases of
several major studios, including Paramount, Lions Gate, and MGM, at a cost of
nearly $1 billion, and to do so 90 days after they are available for broadcast on
Epix. The deal confirmed the growing perception that audiences were choosing
to access movies via streaming video rather than on DVD. It also illustrated
Netflix’s continued evolution toward streaming content and away from the DVDby-mail service that led it into prominence. In addition, the Netflix deal allowed
the company to compete more directly with cable channels such as HBO that historically had exclusive broadcast rights to many of Hollywood’s best-known and
most-recent films.40 Although this deal would not interrupt the “retail window,”
it assured a much deeper catalog of streaming content, further cementing the
importance of digital delivery and reinforcing the complexity of the current windows system.
These industrial changes raise important questions about movie consumption practices. Accompanying the red box and the red envelope is a changed
perception of the “value” of a film text, a shift that is responding to the increased
mobility of the film text and the fluidity of the window system, in which movies
and television shows circulate in a variety of platforms and can be packaged in
a variety of formats. Perhaps the biggest impact will be on DVD sales. Although
some studies, including Paramount’s market research, have suggested that
Redbox’s effect on DVD sales is negligible, research cited by The Wall Street
Journal indicates that 25% of renters claim they would buy fewer DVDs because
of their availability in kiosks.41 The logic of the retail window responds in part
to the recognition that 90% of all DVD sales take place during the first month
that the film is available for sale, but it is less clear whether or not audience
50 CHUCK TRYON
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 51
enthusiasm for specific films will translate into increased sales. More crucially,
however, competition from Redbox kiosks could lead to lower prices not only for
rentals but also for digital downloads and video-on-demand purchases, shaping
future expectations about the value of renting and owning copies of movies in
whatever format.
Although the rise of Redbox has taken place alongside of video store chains
such as Blockbuster, Movie Gallery, and Hollywood Video, some studios argued
that “mom-and-pop” stores have been the most directly affected.42 However,
there is evidence, some of it admittedly anecdotal, that independent video stores
have actually managed to gain traffic thanks to the closure of the chain stores.
Independent video stores might also benefit from the 28-day retail window
imposed upon Netflix and Redbox, in which they would not have to participate
due to the First Sale Doctrine, which allows a purchaser to sell, rent or give away
a particular lawfully made copy of a copyrighted work without permission once
it has been purchased. This would potentially place bricks-and-mortar video
stores as one of the few rental services to have new releases for rent on the date
they become available for purchase, a considerable advantage when people are
seeking out a night’s entertainment and are uninterested in purchasing a DVD.43
In fact, many video stores, both independent “mom-and-pop” stores and chains
such as Blockbuster, have explicitly marketed themselves in terms of the ability
to rent videos before Redbox and Netflix. Blockbuster began running advertisements that emphasize their competitive advantage when promoting their ability
to rent newly released DVDs before their competitors. Their advertisements for
the Sandra Bullock film The Blind Side (John Lee Hancock, 2009) emphasized
the customer’s ability to “get it today at Blockbuster,” in stores, on demand, or
via the mail. Despite this apparent advantage, Blockbuster struggled to compete
against the convenience models promoted by Redbox and Netflix.
CONCLUSION
The place of Redbox within the culture of movie rentals can tell us quite a bit
about everyday film culture. Although Netflix, Mubi, and other distributors continue to promote themselves in terms of their expansive catalogs and their ability to allow customers a deeper engagement with film culture, rental kiosks have
become a crucial site through which home audiences rent and watch movies in
the US. The popularity of Redbox’s kiosks has unsettled traditional DVD distribution patterns. As a result, studios worked over the course of several months to
negotiate a “retail window,” which would provide studios with a 28-day time
period between the “street” date that new DVDs would be available for purchase
and the date that they would be available for rental via Netflix and Redbox. This
attempt to regulate when and where movies become available for consumption
at home challenges prevailing wisdom about the web supporting ubiquitous
access to content, while also highlighting the ways in which studios and retailers
REDBOX VS. RED ENVELOPE
51
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 52
continue to negotiate the rights to control which content will be available on
which delivery systems. Thus, the negotiations between the studios and Redbox
served as a means for studios to regulate and police the distribution of DVDs in ways
consistent with the logic of controlled consumption postulated by Henri Lefebvre
and described in detail by Ted Striphas in his discussion of the book industry.
Moreover, rental kiosks help to challenge the idea that consumers are necessarily interested in access to the vast catalogs celebrated by digital utopians such
as Chris Anderson. Instead, kiosks might be productively read as a “disruptive
innovation,” one that meets the unrecognized needs of a group of consumers,
especially parents with young children seeking to use a DVD as an “electronic
babysitter.” Finally, Redbox and other kiosk services remind us that, as media
scholars, we must engage not only with the textual artifacts of a media-saturated
culture but also with the distribution cultures in which these texts circulate.
Because the DVD has vastly expanded viewer access to the “insider knowledge”
behind the making of Hollywood films, it is tempting to project an implied viewer
associated with the discourses of fandom or cinephilia. Ultimately, Redbox and
Netflix remind us that in thinking about everyday film culture, we should consider not only the shiny object of the DVD itself but also the locations where it
is rented or sold.
NOTES
1.
A. O. Scott, “The Shape of Cinema, Transformed at the Click of a Mouse,” The New York
Times, 18 March 2007, http://www.nytimes.com/2007/03/18/movies/18scot.html
(accessed 25 May 2011).
2.
See, for example, Anne Friedberg, Window Shopping: Cinema and the Postmodern
(Berkeley: University of California Press, 1994); and Derek Kompare, “Publishing Flow:
DVD Box Sets and the Reconception of Television,” Television & New Media 7.4 (2006):
335-360.
3.
Jeff Ulin, The Business of Media Distribution: Monetizing Film, TV, and Video Content
(New York: Focal Press, 2010), 3.
4.
Ted Striphas, The Late Age of Print: Everyday Book Culture from Consumerism to Control
(New York: Columbia University Press, 2009), 5. Striphas’s concept is informed by Henri
Lefebvre, Everyday Life in the Modern World, trans. Sacha Rabinovitch (New Brunswick,
NJ: Transaction Publishers, 1984), 68-109.
5.
Ulin, 4.
6.
Ibid., 4-36.
7.
Ibid., 31.
8.
Frederick Wasser, Veni, Vidi, Video: The Hollywood Empire and the VCR (Austin:
University of Texas Press, 2001), 47.
9.
Edward Jay Epstein, “Hollywood’s Death Spiral: The Secret Numbers Tell the Story,” Slate,
25 July 2005, http://www.slate.com/id/2123286 (accessed 25 May 2011).
10.
Edward Jay Epstein, The Big Picture: Money and Power in Hollywood (New York:
Random, 2006), 216.
11.
Edward Jay Epstein, The Hollywood Economist: The Hidden Financial Reality Behind the
Movies (Brooklyn: Melville House, 2010), 185.
12.
Ryan Lawler, “Netflix: The Future is Streaming,” NewTeeVee, 27 May 2010, http://newteevee.com/2010/05/27/netflix-the-future-is-streaming (accessed 25 May 2011). See
52 CHUCK TRYON
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 53
also “Netflix Business Opportunity,” Netflix.com, http://www.netflix.com/Jobs (accessed
25 May 2011).
13.
Janko Roettgers, “Good News for Netflix: Shaw Raises Bandwidth Caps,” GigaOM, 26
May 2011, http://gigaom.com/broadband/netflix-shaw-bandwidth-caps (accessed 20
June 2011).
14.
David Poland, “More Anything Anywhere,” The Hot Blog, 15 August 2010,
http://www.mcnblogs.com/thehotblog/archives/2010/08/more_anything_a.html
(accessed 25 May 2011).
15.
Chuck Tryon, Reinventing Cinema: Movies in the Age of Media Convergence (New
Brunswick: Rutgers University Press, 2009), 16-37. See also Barbara Klinger, “The DVD
Cinephile: Viewing Heritages and Home Film Cultures,” in Film and Television After DVD,
ed. James Bennett and Tom Brown (London: Routledge, 2008), 19-44.
16.
Barbara Klinger, Beyond the Multiplex: Cinema, New Technologies, and the Home
(Berkeley: University of California Press, 2006), 73.
17.
Ibid., 87.
18.
Catherine Grant, “Auteur Machines? Auteurism and the DVD,” in Film and Television after
DVD, ed. James Bennett and Tom Brown (London: Routledge, 2008), 101-115.
19.
Ulin, 171-174. See also Epstein, Hollywood Economist, 174-75. The concept of home
video as an “electronic babysitter” dates back to at least the 1980s. See Joshua M.
Greenberg, From Betamax to Blockbuster: Video Stores and the Invention of Movies on
Video (Cambridge: The MIT Press, 2008), 94.
20.
David Milstead, “Forget the Futurists—Coinstar is a Cash Machine,” The Globe and Mail, 9
April 2011, B10.
21.
Ben Fritz, “Blockbuster Tells Hollywood Studios it’s Preparing for Mid-September
Bankruptcy,” Los Angeles Times, 26 August 2010, http://latimesblogs.latimes.com/
entertainmentnewsbuzz (accessed 25 May 2011).
22.
“Movie Gallery to Close all U.S. Stores: Report,” Reuters, 2 May 2010,
http://www.reuters.com/article/idUSTRE6412SR20100502 (accessed 25 May 2011).
23.
Brooks Barnes, “Movie Studios See a Threat in the Growth of Redbox,” New York Times,
6 September 2009, http://www.nytimes.com/2009/09/07/business/media/
07redbox.html (accessed 25 May 2011).
24.
Carla DiOrio, “$1 DVD Rentals Costing Biz $1 Bil: Study,” The Hollywood Reporter,
7 December 2009, http://www.hollywoodreporter.com (accessed 25 May 2011).
25.
Chris Anderson, “The Long Tail,” Wired 12.10 (October 2004),
http://www.wired.com/wired/archive/12.10/tail.html (accessed 25 May 2011).
26.
Rachel Thibault, “The Auteurs: Taste and Gender in Contemporary Cinephilia,” presentation at Society for Cinema and Media Studies Conference, 21 March 2010.
27.
Chris Tribbey, “Six Questions: Redbox’s Mitch Lowe,” Home Media Magazine, 31 July
2009, http://www.homemediamagazine.com (accessed 25 May 2011).
28.
David Lieberman, “DVD Kiosks Like Redbox Have Rivals Seeing Red,” USA Today,
11 August 2009, http://www.usatoday.com/tech/products/2009-08-11-rental-dvdredbox_N.htm (accessed 20 June 2011).
29.
Diane Garrett, “Redbox Analysis: Kiosks vs. Studios,” Thompson on Hollywood, 24 August
2009, http://blogs.indiewire.com/thompsononhollywood (accessed 25 May 2011).
30.
Brooks Barnes mentions that Redbox president Mitch Lowe experimented with a VHS
vending machine in the 1980s, which as a Star Wars buff, he called Video Droid. It failed
in part due to a more credit-conscious customer base and because of the fragility of VHS
tapes. See also Redbox.com.
31.
Blake Williams, “Movie Magic Brings Redbox-Like DVD Rentals to Toronto,” BlogTO,
1 May 2011, http://www.blogto.com/film/2011/05/movie_magic_brings_redboxlike_dvd_rentals_to_toronto (accessed 20 June 2011).
32.
“Best Buy Bringing Online Video Service to Canada,” CBC News, 16 June 2011,
http://www.cbc.ca/fp/story/2011/06/16/4956666.html (accessed 20 June 2011).
REDBOX VS. RED ENVELOPE
53
scope,
oute
004.Tryon_20.2_Pierson 11-11-17 1:40 PM Page 54
33.
Mark Burgess, “Online CinemaNow Service Eyeing ‘Significant’ Amount of Cancon: Best
Buy,” The Wire Report, 16 June 2011, http://www.thewirereport.ca/reports/content/
12586-online_cinemanow_service_eyeing_sigificant_amount_of_cancon_best_buy
(accessed 20 June 2011).
34.
Adam Dawtrey, “Odeon Ends Alice in Wonderland Boycott,” The Guardian, 25 February
2010, http://www.guardian.co.uk/film/2010/feb/25/odeon-alice-in-wonderland-boycott
(accessed 25 May 2011).
35.
Eugene Novikov, “What’s This Hullaballoo over AMC Theatres and ‘Alice in Wonderland?’,”
Cinematical, 21 February 2010, http://www.cinematical.com (accessed 25 May 2011).
36.
Ryan Paul, “Studio Makes Redbox an Offer it Can’t Refuse, Redbox Sues,” Ars Technica,
28 October 2008, http://arstechnica.com/tech-policy/news/2008/10/universal-studiosattacks-dvd-rental-kiosks.ars (accessed 25 May 2011).
37.
Erik Gruenwedel, “Analyst: Dismissal of Redbox Claims Could Undermine Kiosk Viability,”
Home Media Magazine, 5 October 2009, http://www.homemediamagazine.com
(accessed 25 May 2011).
38.
Olga Kharif, “Wal-Mart, Target Put Squeeze on Redbox,” Business Week, 2 February 2010,
http://www.businessweek.com (accessed 25 May 2011).
39.
Ryan Lawler, “Paramount: Redbox Had ‘Minimal Impact’ on DVD Sales,” NewTeeVee, 15
June 2010, http://newteevee.com/2010/06/15/paramount-redbox-had-minimal-impacton-dvd-sales (accessed 25 May 2011).
40.
Brian Stelter, “Netflix to Stream Films From Paramount, Lions Gate, MGM,” The New York
Times, 10 August 2010, http://mediadecoder.blogs.nytimes.com (accessed 25 May 2011).
41.
Cited in Dawn Taylor, “Could 1$ Redbox Rentals Cripple iTunes?,” Cinematical, 4 September
2009, http://www.cinematical.com (accessed 25 May 2011).
42.
Barnes.
43.
Thomas K. Arnold, “Is Warner Trying to Remake the Video Rental Business,” Home Media
Magazine, 18 January 2010, http://www.homemediamagazine.com (accessed 25 May 2011).
CHUCK TRYON is an assistant professor in the Department of English and Foreign
Languages at Fayetteville State University, where his teaching and research has
focused on film, television, and convergent media, including digital cinema,
documentary studies, political video, and technology in the language arts classroom. He is the author of Reinventing Cinema: Movies in the Age of Media
Convergence (2009) and has published essays in The Journal of Film and Video,
Film Criticism, First Monday and in The Essential Science Fiction Reader.
54 CHUCK TRYON