Movie fans might have to wait to rent new DVD releases

For those who like renting movies, Hollywood may soon have a message: Prepare to wait.

In an effort to push consumers toward buying more movies, some major film studios are considering a new policy that would block DVDs from being offered for rental until several weeks after going on sale.

Under the plan, new DVD releases would be available on a purchase-only basis for a few weeks, after which time companies such as Blockbuster Inc. and Netflix Inc. would be allowed to rent the DVDs to their customers. The move comes as the studios are grappling with sharply declining DVD revenue, which has long propped up the movie business.

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First sale doctrine

How would Hollywood make this work?

If they sell the DVDs to the public rental stores could just buy a copy and rent it out. Under the first sale doctrine (17 U.S.C. Sec. 109) a legally purchased copy can be rented.

In the bottom of the story you will see this line paragraph:
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Depending on the details, however, a sales-only window might not hurt the bottom line of major rental companies. To get them on board, studios probably would have to offer them a lower wholesale price than that paid by retailers, currently $18 for most standard DVDs and $25 for high-definition Blu-ray discs.
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The key language in the above paragraph is "getting them on board". To get rental companies to not rent DVDs for a certain window they have to give up their first sale rights. To get them to give up their first sale rights the studios could sell two versions. One version would come with contractual restrictions about when the DVD could be rented. To get rental companies to take such DVDs they will have to be offered a lower price.

Shrink wrap license?

Can the studios include (and enforce) a shrink wrap license that prohibits rental?

Good question

Good question. I don't think so but I am somewhat unsure. I did some initial research but was unable to come to a definitive answer. If the sale could be controlled with a shrinkwrap license I think the studios would have been using them already. I know shrinkwrap licenses have been used for software but I think something in the law distinguishes software from DVD.

Even So

Shrink wrap licenses have proven ineffective in enforcing anything. I haven't really looked for one, but I haven't seen a shrink wrap license on anything for a long time. Why?

Because what happens if a blind person buys something and then opens it? What happens if a minor buys a DVD or a piece of software and opens it? Neither be held accountable to the terms of the license. The blind person couldn't read the license and, since a shrink wrap license is the same as a contract, the minor cannot be bound by a contractual obligation.

Besides, can you prove that I opened the shrink wrap? Maybe my friend did. But if I didn't open it, then I'm not bound by the shrink wrap agreement for the same reason I'm not accountable to a contract with someone else's signature on it. I seem to recall one instance where someone had trained their pet to break the wrap on packages. Since the pet opened the package and not the person, there's no agreement.

Point is, even if the studios tried a shrink wrap license, it's been shown in court that it's damn hard to enforce. Many of the shrink wrap licenses referred to terms located inside the package or referred to websites with additional terms. Since the purchaser couldn't review all the terms before buying, then any agreement was nullified.

Some books contain the machinery required to create and sustain universes. Tycho (Jerry Holkins) @ Penny Arcade

Problem

There is a problem with your argument. The studios are not looking at enforcing these arguments against Joe Public but against rental chains like Blockbuster, Redbox, etc...

If the shrink wrap agreement says you cannot rent the DVD for one month after release and Redbox starts to buy up copies and put them in their machines in violation of the shrinkwrap agreement it is not going to work for a company that bought a 1000 copies to say, "Oh, we didn't see the shrink wrap agreement."

I still think there is a question of whether the skrink wrap agreement is good on its face but if it is a defense of "I didn't see it" is not going to work for Redbox and that is who the studios are targeting.

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