Not content to learn from the 10 plus years of mistakes by the recording industry, the movie industry is stampeding its way to obsolescence.

First, Fox and Warner Bros. have joined Universal in its battle with Redbox, the successful rental kiosks found outside supermarkets and fast food joints. Redbox rents movies for $1 a day, legally purchasing the movies from wholesalers. Redbox will even sell used DVDs for about $7.

Fox, Warner Bros. and Universal have sued claiming Redbox is infringing on their copyrights and are ordering wholesalers to refuse to sell their movies to Redbox before several weeks. The studios are demanding revenue sharing from the kiosks.

Redbox is countersuing for antitrust and abuse of their copyrights.

Redbox, while relying on the movie studios, is in a stronger position. Sony and Lions Gate are backing the kiosks with their movies, recognizing that movie fans love the price and convenience. DVD sales are down 13 percent while rentals are up 8 percent.

Next, the movie studios recently won two important court cases, both likely to cause more damage to the industry rather than help.  The first was the studio’s win over Real’s DVD copying software.  This copier circumvented the DVD’s DRM, which is illegal under the DMCA, but then put new DRM in its place so users couldn’t share their movies.

Now, copying for personal use or backup is considered legal and a fair use of a copyrighted work. But because of the DMCA’s anti-circumvention laws, you can’t backup the DVD you legally purchased.

What’s silly, is Real’s copier cost $20 and used DRM making it a somewhat worthless copier, especially when there are dozens of free DVD copiers without any DRM. So by suing, the movie studios 1) promoted that people could copy movies and 2) sent them to free, DRM-less alternatives.

For their other lawsuit, movie studios won their appeal against Kaleidescape, which is basically an iPod for movies (or a DVD jukebox, if you will), but costs $10,000.  Movie studios of course feared this system would be a haven for piracy, but again, it’s $10,000. It’s for high-end movie fans with lots of DVDs who don’t want to keep switching discs. They backup their discs on Kaleidescape and then watch them on their TV. But because of the DMCA’s anti-circumvention laws, users can’t do what they are otherwise legally allowed to do. And the movie industry gets to stamp out innovation and technology that is trying to help make DVDs and movies more valuable.

How are legal remedies helping here? The movie studios are trying to crush three different companies who are trying to help make DVDs more valuable at a time when consumers are showing DVDs are less worth purchasing.

I missed posting about the Watchmen fiasco. Basically, Fox once owned the rights to the Watchmen movie and actively decided not to make the film. So a few months before Warner Bros. releases their version, Fox sues saying it still owned the rights.  To keep its release date, Warner Bros. settled, paying off Fox for doing nothing. Copyright doing its duty, right?

Activision, likely giddy at the prospect of being its own Fox, is threatening to sue EA for publishing a game Activision gave up on.  Activision merged with Vivendi Games and in the merger, Activision dropped several titles including Brutal Legend, which EA picked up. Now that Brutal Legend is getting hype and an anticipated release, Activision is claiming EA is infringing on their rights on a game Activision said they don’t want to release – they want money for doing nothing.  I particularly love EA’s response.

We doubt that Activision would try to sue. That would be like a husband abandoning his family and then suing after his wife meets a better looking guy.

Fox made headlines announcing several of its new series would be part of “Remote-Free TV”.  The experiment began with Fringe, featuring only 10 minutes of commercials, often minute long breaks, for an hour long show, rather than the average 20 minutes.  Silicon Alley Insider crunched the numbers and found the experiment seems to be a financial success. Nicholas Carlson writes:

Fox has only been able to charge a 40 percent to 50 percent premium on “Fringe” spots — about $343,000 according to an AdAge study.

Figure then that Fox makes $6.86 million off 10 minutes of 30-second ads — 20 ads — during each “Fringe” episode.

If, like it normally would, Fox showed 32 ads at a 45% markdown from that premium, Fringe would pull about $7.6 million per episode.

Jon Nesvig, president of sales for Fox Broadcasting, thinks with more time, Remote-Free TV ads can be sold for an even higher premium.  What’s uncertain is how Remote-Free TV affect ratings.  Fox premiered Dollhouse last Friday with Remote-Free TV with modest ratings (though Friday nights have notoriously low viewership).

What it does show is more money can be made showing fewer ads, maybe even to fewer people.  Fox realizes viewers hate commercials and are buying DVRs and time-shifting technology with the purpose of skipping their main source of revenue.  Instead of fighting viewers, Fox is providing customers what they want – more TV, less commercials.  This encourages viewers to watch the show without waiting and even sit through a few short commercial breaks (sometimes even with higher quality commercials).

Instead of guilting viewers to watch, using DRM, or just packing shows with more commercials to offset lower revenue from time-shifting, Fox is trying to attract customers with more value.