Hollywood studios are split over Redbox, the $1-per-night DVD rental kiosk company: They could supply it with cheap wholesale discs and ride its massive growth, or starve it in the hopes of preserving higher-priced purchases. News Corp.'s 20th Century Fox fell on the side of starvation this week, joining General Electric Co.'s Universal Pictures, whose withholding of discs prompted a lawsuit. On the flip side, Sony Corp.'s movie division signed a five-year deal just last month to supply Redbox. As part of the deal, Redbox would get discs more cheaply but would have to destroy copies after their rental lives ended rather than sell them as "previously viewed" for $7 apiece, as it had done in the past.
My favorite line is this one:
Redbox can still obtain DVDs without a studio's cooperation. The "first sale" legal doctrine gives it the right to use the discs as it sees fit after buying them, just as someone buying a book at a retail store can resell it, lend it or simply throw it away (The law is different for intangible property like movie and music downloads).