Fresh on the heels of a lawsuit against Twentieth Century Fox for delaying the release of new DVDs on its service, kiosk rental company Redbox won a small victory yesterday when a Delaware judge rejected a request by Universal Studios to dismiss a case made against the studio in October 2008.
While the judge let Redbox’s anti-trust claims stand, he dismissed complaints of copyright misuse and interference with Redbox’s contracts. The anti-trust claims focus on whether Universal’s decision to delay releasing its DVDs to Redbox kiosks by 45 days unfairly raises DVD prices and restricts consumer choices.
Redbox offers DVDs for a fee of $1 per night, so the fact that its service has surprised many by taking off fairly quickly has likely made the studios nervous about what has become a big profit centre even while DVDs face their own secular challenges from different forms of in-home entertainment.
Pali Research analyst Rich Greenfield estimates Redbox revenue will grow 90% in 2009. Though in a report issued this morning (registration required) Greenfield said he was concerned about the company’s profitability. Why? It will need to buy DVDs released by Universal and Fox in retail stores when they are released — versus directly from the studios at wholesale — in order to make those titles available for rental immediately after their release.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.