There's the downside to litigation like this. Loads of people who've never heard of RedBox (like me), now do and have a cheap alternative for Disney movies.
Same here. I occasionally rent movies from Redbox and I wasn't aware of the codes. They're typically far cheaper than renting from Amazon. Sometimes I'll find a relatively newly released movie that I want to watch, and Amazon will want $5.99 to rent it (eg Blade Runner), versus ~$2.12 for the blu ray from Redbox. Amazon's digital rental prices are semi obnoxious at times; Alien Covenant is an ok movie that has been out on disc for a while, Amazon still wants $5.99 to rent it, you can buy the used blu ray from Redbox for $4.23 or rent it for half that. I have a box not far from my house, so I'll just grab the disc while out doing something else.
As a note, it's not Amazon deciding to make the rental price "obnoxious" to take high margins - it's driven by the wholesale prices that they are charged by content licensors for digital rentals.
(I know, this fact doesn't make the digital rental any cheaper...)
I used to work at Amazon (in a different area, but collaborated with people in the video business) and I now work for a company that competes with Amazon's transactional video service.
The world of physical rental - at least in the US, not commenting globally - can rely on the First Sale Doctrine, which dramatically alters the economics.
Also it's very common that getting the CD from amazon is cheaper than the $9.99 that they charge for albums. This is double crazy when you realize that buying many (most?) CDs on amazon cause the MP3s to be added to your amazon account as well.
That's kinda the point of the lawsuit: they can't. Redbox is buying Disney movies at retail. The only way for Disney to stop Redbox from doing what they're doing is to stop selling physical copies of movies.
They are working on their own streaming service so they could stop selling retail copies. I'll admit this won't happen in the next 5 years (depending on the success of their streaming service).
They can stop selling the retail copies with the code included. That would pinch off Redbox, but upset customers.
They could stop offering download codes and instead allow people to register their retail copy to the streaming service with a copy of their receipt. Again, not very consumer friendly, but Disney is big enough to possibly get away with it.
I can see that happening in the next few decades. Once sufficient amount of people have reliable access to internet, the physical option can be dropped completely.
Which ends up hurting us (the consumers) in the end. I will be sad to see digital download codes go the way of the dodo so some corporate fat cat at Redbox can double dip into their profits.
That is what they're doing already, buying discs at retail. So no, Disney can't stop them unless they stop selling physical discs (or stop including digital copies with their physical discs).
They could also do a deal with Redbox to sell bulk rental-version discs at a lower price, which would not include the digital download code included with the retail copies.
But they won't, because Disney is the 800 lb. gorilla that can get whatever it wants by beating its chest and charging...
...the lobbying and litigating costs to its colossumongous IP protection budget.
Well, right, they could contract with them to mutually agree to stop by incentivizing them as you suggest, but I was talking more from a unilateral standpoint.
