Date: 1st February 2001

Indie Video Stores Sue Blockbuster Studios


Some 150 independent video rental stores have jointly filed a restraint-of-trade suit against Blockbuster, parent Viacom and the major film studios claiming that a secret revenue-sharing deal between Blockbuster and the studios represents an unfair business practice under California law. The suit, filed on Wednesday, targets Blockbuster's "Guaranteed to Be There" marketing campaign, which, the suit says, depends on a revenue-sharing deal with the studios under which they provide new video releases to Blockbuster with little or no up-front charge and then participate in subsequent rental revenue. The suit charges that Blockbuster's deal with the studios places them at a competitive disadvantage because "Blockbuster has been able to flood its video stores with vastly greater numbers of copies of newly-released titles than plaintiffs and other class members can obtain. ... The purpose and effect of these agreements was to increase Blockbuster's market share by driving independent retailers out of business."

Source: Studio Briefing