Uh oh.

That’s about all you can say for the upstart video rental kiosk outfit Redbox.

It seems that the strategy of studios issuing embargoes against new releases is starting to give Redbox some serious problems in its supply chain.  The newest DVDs are simply not hitting Redbox as fast as they are any other video rental operation.

Thus, in a bid to try and get the product something CLOSE to the release date, Redbox is getting its titles direct from retailers, buying them from Wal-Mart. This was workable, albeit inconvenient, back when Redbox was only under Universal’s embargo.  But now, Redbox is facing embargoes from Universal, 20th Century Fox and Warner Brothers.  Naturally, Redbox is suing, but if Redbox loses the suits, the problems will only get worse.

And Redbox may well find itself out of the market.