Disney’s lawsuit against Redbox is over, and it didn’t work out well for Redbox. The two parties have agreed to a settlement that will have Redbox stop selling movie download codes from Disney disc packs. Attorneys for Disney accused Redbox of violating copyright by offering the codes separately from the discs that went into rental kiosks. Redbox had accused Disney of anti-competitive behavior and succeeded in thwarting a preliminary injunction that would have blocked sales, but the defense fell apart after Disney reworked the disc packs’ terms making code access contingent on how you bought the movies instead of physical ownership.
This change led a judge to grant Disney an injunction, and Redbox lost all of its counterclaims except for one accusing Disney of false advertising. Basically, it had run out of options. The settlement does help Redbox avoid potentially worse consequences that might come from fighting longer.
Redbox started selling codes after downloads and streaming threatened its disc-based rental business. The company has tried it’s hand at digital services, but it has never really took off to compete with the big boys like Netflix or Apple. So now Red box has one less digital option and the competition won’t get any easier for them.