The battle for control of the DVD rental business continues to heat up.

Redbox, the Coinstar (CSTR) unit which operates more than 15,000 DVD rental kiosks around the country, today announced that it has filed suit against 20th Century Fox over new proposed distribution terms which would prevent Redbox from renting the studio’s DVDs to consumers until at least 30 days after they are released to the public.

As I noted in my May 18 column in Barron’s, has a similar suit pending against Universal Studios. The issue: Redbox rents movies for $1 a day. The price is so low that the studios fear that consumer will be incented to stop buying DVDs, thus wrecking a lucrative component of studio revenues.

Not all of the studios are at war with Redbox; the company yesterday announced a multi-year distribution deal with Lionsgate, for instance.

But the issue is a serious one for Hollywood. In a blog post today, Pali Research analyst Richard Greenfield asserts that the Redbox business model “poses a substantial risk to the future of the movie industry,” since it sets an ultra-low price point for movie content. He contends the price is so low that it could incent retailers to discount down to zero to drive traffic.

Disclosure: 20th Century Fox is a unit of News Corp. (NWS), publisher of this blog.