×

Redbox Staffer Threatened With Prison Time for Buying ‘Coco’ DVDs

Disney is taking the gloves off in its battle with kiosk operator Redbox, working to make it significantly harder for Redbox to obtain DVDs of recent Disney releases.

According to an amended complaint filed on Tuesday by Redbox, Disney has recently retained Anderson Merchandisers, an in-store merchandising company, in its effort to limit Redbox purchases of Disney DVDs. Redbox alleges that a major big-box retailer has been instructed not to allow Redbox employees to buy more than five Disney DVDs. The retailer is not identified in the complaint, but Anderson has a close relationship with Walmart.

Redbox alleges that Anderson employees have followed its own staffers around in stores and taken photographs of them, and in one case threatened a Redbox staffer with prison time.

“On February 27, 2018, a Redbox employee was threatened multiple times with imprisonment in a federal prison for purchasing combo packs of ‘Coco,'” the complaint alleges. “Upon information and belief, the threats were made by a representative of Anderson or Disney.”

The legal battle arises from Redbox’s practice of buying up DVD combo packs, which include codes for a digital download. Redbox then separates the codes and sells them separately through its kiosks, at a steeply discounted price compared to the cost of a download from iTunes or Amazon. Disney filed suit last fall accusing Redbox of copyright infringement, while Redbox contends that its practice is perfectly legal and that Disney is seeking to starve a low-cost competitor of content.

“Disney is seeking to expand its role in the distribution market itself as a competitor to retailers like Redbox and Netflix, and, on information and belief, to eventually remove third-party retailers from the distribution chain altogether,” Redbox alleges. “Disney wants consumers to be inured to higher prices so that they will not object to them once Disney expands into that market.”

In February, a federal judge denied Disney’s request for an injunction to block Redbox from selling download codes. On Monday, Disney renewed its bid for an injunction, saying it had updated its terms and conditions in response to the judge’s ruling.

Redbox argues that the issue is broader than the digital codes, saying that Disney is seeking to block it from obtaining physical discs, which it unquestionably has the right to re-sell. Redbox’s suit alleges that Disney is abusing its dominant position in the market, and will only have more power over retailers once the Fox merger is completed.

“Disney is unlawfully using its market power to reduce output and prevent Redbox from meeting consumer demand for Disney titles,” Redbox states. “Only a company with substantial market power could dictate terms to major national big-box retailers that ultimately lead those retailers to sell fewer units.”

In response to the updated complaint, a Disney spokesman said, “Redbox continues to infringe our copyrights, and we have filed a renewed motion to stop its sale of our digital codes. While Redbox has filed a counterclaim to distract attention from its infringing conduct, we remain confident in our position and look forward to pursuing our claims in court.”

Popular on Variety

More Film

  • James Bond Spectre

    James Bond Movie Title Revealed

    The latest James Bond adventure finally has a title. The 25th entry in the action spy series will be named “No Time to Die.” In the upcoming movie, Bond (Daniel Craig) has left active service and is enjoying a tranquil life in Jamaica. His peace is short-lived when his old friend Felix Leiter from the CIA [...]

  • IFC Midnight Buys Brighton Sharbino Survival

    IFC Midnight Buys Survival Thriller 'Radioflash' (EXCLUSIVE)

    IFC Midnight has acquired U.S. rights to “Radioflash,” a survival thriller starring Dominic Monaghan and Brighton Sharbino, Variety has learned. The company will release the movie on Nov. 15. The film imagines a dystopian future, one in which an electric-magnetic pulse strikes America, knocking out all the power and pushing the country into the Dark [...]

  • Lee-Daniels-headshot

    Lee Daniels Entertainment Announces Diverse Creative Workshop

    Lee Daniels Entertainment and the online entertainment network Represent by OMV have launched a diversity-focused creative workshop to promote a diverse group of new writers. The workshop will be held from Sept. 25-28 in Los Angeles, with travel provided by American Airlines. Industry professionals will mentor aspiring creatives from underrepresented communities with workshops, meetings with [...]

  • Peter Fonda Obit Remembered

    Remembering Peter Fonda, Indie Revolutionary and Counterculture Icon (Column)

    Captain America has died. Not the spandex-clad Marvel superhero, but counterculture poster boy Peter Fonda, who shook up Hollywood and revolutionized the country’s sense of itself by co-writing, producing and starring in “Easy Rider” 50 years ago this summer — the same summer depicted in Quentin Tarantino’s “Once Upon a Time … in Hollywood.” Culture [...]

  • Knives Out

    Rian Johnson's 'Knives Out' Sells to KKR's New Distribution Company in Germany

    Rian Johnson’s “Knives Out” has been picked up for Germany by the newly established distribution company owned by New York-based private equity group KKR. Fred Kogel’s rapidly growing, but still unnamed, German independent production and distribution operation has taken all rights for Germany and Austria on the all-star whodunnit, which stars Daniel Craig, Jamie Lee Curtis, [...]

More From Our Brands

Access exclusive content