Redbox is a DVD-distribution company that operates from small vending machines deployed in popular commercial venues such as supermarkets and fast food restaurants. It was originally created by McDonald's, but was later bought by Coinstar. By December 2009, there are expected to be around 22,000 Redbox kiosks across America, substantially more than the kiosks of its closest competitor in video rental, Blockbuster.
With the demise of larger video rental stores and the rising prices of viewing movies in theaters, Redbox has become a favored option for viewing films among American consumers. The convenience of a nearby location allows Redbox to dodge the complaints of excessive delay plaguing Netflix, and its one dollar per night pricing model gives it an advantage over traditional rental stores, which charge higher amounts for longer time periods to customers who will often only watch a particular movie one or two times before returning it.
In 2009, amidst fears that Redbox rentals would devastate the revenue taken in by studios from DVD purchases, the three largest American movie studios (20th Century Fox, Warner Brothers, and Universal Studios--collectively 62% of the DVD market) each announced that their movies would not be available to Redbox representatives at wholesale rates until 28 days after their general release. In response, Redbox launched an antitrust lawsuit against the three companies, while advising its employees to acquire DVDs at full prices from retail stores if necessary. As of the time of this writing, the suit is undecided, but Redbox has secured distribution agreements with other, small studios and continues to sell its wares.