Audio Video News

Chalk up another one for the big guys. A San Antonio, TX judge has dismissed price-fixing charges brought by independent video dealers against video retail giant Blockbuster, Inc. and several Hollywood studios.

"There is insufficient evidence of conspiracy to support the plaintiffs' conspiracy-related claims and insufficient evidence of causation to support the price-discrimination claims," US District Court judge Edward Prado ruled Thursday, June 27. The ruling came after two weeks of testimony, including appearances by studio executives from Disney International, Universal Studios, and 20th Century Fox, Blockbuster CEO John Antioco, and Viacom chairman and CEO Sumner Redstone. Viacom is Blockbuster's parent company.

Blockbuster and its Hollywood partners had been accused of price-fixing and anticompetitive practices in violation of US antitrust law because of revenue-sharing deals that Blockbuster had negotiated with the studios. The deals provided Blockbuster with what the plaintiffs claimed were disproportionate numbers of hit movies at discount prices in exchange for sharing a portion of the rental fees with the studios. Blockbuster's share of the video marketplace rose from 40% to 60% after the policies were put in place—evidence, the plaintiffs said, of a conspiracy to drive them out of business.

Judge Prado agreed with Antioco, who told reporters after the decision was announced that the plaintiffs had "no facts to support their claims." Plaintiffs' attorney Jim Moriarty called Prado's ruling "ridiculous" and "another case of the rich and powerful winning out over the poor." Moriarty plans to appeal the decision.

Approximately 4000–5000 independent video stores have gone out of business during the past three or four years, according to Moriarty, who blamed Blockbuster's "predatory policies." It should be noted that, during the same period, sell-through DVD has consumed a large chunk of the rental market.