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Archive for September, 2009

Redbox recently announced that it has passed the 500 million movie rental mark. In just a few short years, it has gone from a tiny upstart to one of the major players in the DVD rental industry.

In light of such a tremendous accomplishment, it seems appropriate to take a quick look back at Redbox’s history and share a few fun facts:

  • Redbox began in 2002 as a joint venture between McDonald’s and Coinstar. 140 rebranded kiosks, operated by DVDPlay,cake were placed at McDonald’s restaraunts around the Denver area. Coinstar purchased full ownership of Redbox for $175 million in February of this year.
  • In 2007, the number of Redbox kiosks passed the number of Blockbuster Video locations.
  • Redbox reached 100 million DVD rentals in February of 2008.
  • The DVDPlay machines were phased out in 2005 in favor of a new, custom-designed machine. These machines can hold more than 600 discs, and contain anywhere between 70 to 200 titles.
  • The average Redbox DVD is rented 15 times during its lifespan in the machine. Used DVDs are returned to suppliers or sold at a reduced price from the kiosk.
  • Redbox plans to have more than 20,000 kiosks in place by the end of 2009.

It took Redbox six years to reach 100 million rentals, and now it’s crossing the half-billion mark just 18 months later. What say you, Insiders—Facing increased hostility and intransigence from studios, can Redbox keep the momentum going? Is the one billion mark right around the corner?

[via Associated Content and Wikipedia]

I have actually run into quite a few photos over the years of what the inside of a Redbox kiosk actually looks like, but I don’t think I have ever posted about it. So, here is a photo for your viewing pleasure. [click photo for larger view]

Most of the space is taken up by the DVD “carousel” that holds all of the movies. You can also see the touch screen, the computer that runs it (black box on bottom left), and the white box at the bottom that holds the guns.

Do you see anything else of interest? Any surprises for you? Share your thoughts in the comments.

Thanks to reader ‘timscarlet’ for sending this in.

What is this – some studios are coming to their senses? For the second time in 24 hours, Redbox has been praised by a studio exec. Who was it this time?

The answer: Jeffrey Katzenberg of Dreamworks Animation.

“For us, they’re great – bring them on,” said Katzenberg, Dreamworks Founder and CEO.

Read the rest of this entry »

Blockbuster Inc. has been able to slow its drift towards oblivion with a flurry of capital raising and refinancing. Yesterday, the video rental giant’s Chief Executive, Jim Keyes, announced a doubling of the company’s private note offering to $675 million. The influx of funds will let Blockbuster continue expanding its digital offerings and kiosk network. IR---Blockbuster-Reaper

“The new financing will allow the company to make investments designed to grow the business. . . In 2009, we’ve been cash flow starved, but we’ve just eliminated a lot of that pressure,” said Keyes.”

Keyes also got a dig in at rival Redbox, saying the following about the recent nastiness between Redbox and several major Hollywood studios:

“Redbox will have difficulty in purchasing titles,” said Keyes, who said he supported Hollywood’s position for a ‘vending rental window,’ which would keep hot new releases out of kiosks for a few weeks.”

Well, if there’s anything the last couple of years have taught us, it’s that taking on ever-increasing levels of debt NEVER comes back to haunt a company. How ’bout it, Insiders—has Blockbuster managed to roll back the doomsday clock by a few hours or a few minutes?

[via Reuters]

Paramount Loves Being in the Red

Philippe Dauman, CEO of Paramount’s parent company Viacom, has had some nice things to say about the recent trial deal Paramount struck with Redbox.

IR---Paramount-GraphicDisplaying an attitude that contrasts sharply with that of certain other studio heads, Dauman stated that the Redbox deal has had a twofold benefit for Paramount: it has added rental revenue to the company’s coffers and has provided valuable marketing data from specific markets. Dauman’s praise came during the Goldman Sachs Communacopia XVIII Conference in New York City.

“Redbox has obviously resonated with customers,” said Dauman, who estimated that a typical Redbox customer spends $2.50 on a rental because of multi-day rentals. “We felt that rather than litigate this, let’s test this, especially if Redbox proceeds with differentiated pricing for certain releases.”

The fourth quarter of this year will be an interesting test of the Paramount/Redbox alliance.  Paramount’s Transformers: Revenge of the Fallen and Star Trek, two of the highest grossing films of the year, are coming out on DVD in October and November, respectively. While these huge films most likely would have done well regardless, you can be sure Paramount will be watching the rental numbers very closely looking for an extra boost from their less restrictive distribution. Your thoughts, Insiders?

[via videobusiness]

Embattled rental giant Blockbuster plans to close up to 960 stores, or about 20% of its locations, by the end of next year. The decision was made after a company-wide analysis found that 18 percent of Blockbuster’s stores fail to turn a profit.

This is both good and bad news for Redbox. While hundreds of brick-and-mortar Blockbuster stores will be closing over the next twelve months, the company’s plans for a major expansion of their kiosk business remain in place. By the middle of 2010, Blockbuster plans to have 10,000 kiosks in place, outnumbering traditional stores for the first time.

With fewer retail locations, but a vastly increased number of  movie distribution points, will Blockbuster be getting more of your video rental dollars in the coming year?

[Via CNET]

And Away We Go…

Hey Insiders! I wanted to take a minute and introduce myself before the posts start flowing. My name is Shane, and I’m the newest ingredient in the delicious stew that is Inside Redbox. Like you, I love the movies and I love the convenience of Redbox. Michael (Inside Redbox’s founder) has taken his love of the two and turned them into this fantastic site, which I’m now happy to be a part of.

A little about me: I’ve been into movies for as long as I can remember. When I saw Return of the Jedi on the big screen, my pre-school mind was altered forever (I’m sure a certain gold bikini helped with that). Since then, my love of film has only grown, and it’s a thrill to be able to share that with the Inside Redbox community. I’ve been a writer, editor and marketing manager, and recently started my own marketing company, Stickyfoot Creative (website coming soon).

Enough about me. As you know, there’s a lot going on right now with Redbox, its competitors, and the industry in general. Let’s roll…

Give a Warm Welcome to Shane

Just wanted to write a quick post welcoming new Inside Redbox blogger Shane Smith.

Shane was chosen for the position we opened a few weeks ago, and I look forward to seeing what he brings to the Inside Redbox community. I will allow him to introduce himself in his first post, but just wanted to share the news with everyone.

Also, a big thank you to everyone who applied for the position. The choice was not easy, and many of you are very qualified. I will be opening up 1 or 2 unpaid (bonus-only) intern positions next week, so if you are still interested in working with us, stay tuned for that.

Again, welcome Shane!

Coinstar has recently created a promotion where they are taking away the fees for using their coin-counting kiosks when you take a gift card or e-certificate instead of cash.

Now you can exchange your coins for FREE when you load the value onto a card or eCertificate for big name brands. That’s right, there is no coin counting fee when you choose this option. So grab your coin jar and change your coins into something you love.

They have partnered with major brands such as Amazon, Borders, iTunes, Cabela’s, Lowe’s, Starbucks, Old Navy and others. [full list here]

While I see this as a great way to drive more use of their coin-counting machines, and creating a win for consumers and partners, a very important brand is missing from the list – Redbox.

As I have mentioned before, it only makes sense for Coinstar to drive more traffic to Redbox, and this is an easy way to do it. How about letting consumers print promo codes in lieu of cash?

Do you use Coinstar’s coin-counting services? Would you use it more if you could turn spare change into Redbox rentals without paying the usual fees?