Google’s recently announced Google TV platform could prove to be dangerous to Redbox and Netflix by providing wider access to video-on-demand, according to one analyst.
William Blair & Co. analyst Ralph Schackart believes that Google’s new platform could enable Hollywood to “deliver less expensive (higher margin) VOD movies directly through connected TVs.” Schackart argues that such an eventuality would be detrimental to Redbox and Netflix’s market share. Said Schackart:
“We view Google TV as a platform other applications can layer on top of . . . It will enable premium movie sales from many [third-party] stores such as Amazon VOD, [Blockbuster On Demand, Vudu and Best Buy’s CinemaNow].”
Further hurting Redbox’s chances, according to Schackart, is the fact that the company continues to place its bets on cheap DVD rentals and lacks a “concrete digital distribution strategy.”
Do you think the specter of Google TV is causing boardroom bedlam at Redbox and Netflix, Insiders? If the new platform takes off, as Google hopes, do the two companies currently sitting atop the rental heap really have something to worry about? Give us your opinion in the comments.
(via Home Media Magazine)
VOD in its many forms and flavors is not hiding from consumers right now. I don’t think google TV will change the game much. And what’s less expensive mean? Less expensive to deliver is different from less expensive to consumer. $1 a night wins far longer than most think imo.
Of course you have money invested in Coinstar so that is what you would have to say.
The reliance upon the cheap customer will be the downfall of Redbox as their loyalty is nil and attention span even less.
The future will be something similar to what Google TV is trying to be.
Anything that even takes away a fraction of support from Redbox will be devastating for the company as their profit margins are miniscule at best at the moment.
Once again you’ve supplied a flawless analysis of the landscape. Bravo!!
‘The reliance upon the cheap customer will be the downfall of Redbox as their loyalty is nil and attention span even less.’
Some family owned full priced retailer probably said this about Wal-mart 30 years ago…’The reliance upon the cheap customer will be the downfall of wal-mart as their loyalty is nil and attention span even less.’
‘Anything that even takes away a fraction of support from Redbox will be devastating for the company as their profit margins are miniscule at best at the moment.’
Yes it’s far better to have huge gross margins with massive SG&A like blockbuster and movie gallery. I understand how you don’t get the positive aspects of having low margins and low overhead. None of the stores figured it out until recently.
Yes, and with VOD you don’t really know what you are getting – will you really be able to watch the movie when/how you like or will some sort of “rights protection” kick in at the least-opportune moment? And, by the way, everyone knows what Google is best at – web search. But do you know what’s the other thing they’re best at? Advertising. If future TVs have that on them, they better have a way to turn it off!
Just what we need… more advertising on TV. I can’t wait for a pop-up ad to appear while I am in the middle of watching a commercial for a different product. Ha.
But seriously, while I do think Redbox needs to really start focusing on a digital side to their company to stay competitive, I don’t think Google TV will be their downfall. No more than Best Buy’s new VOD will be. The average renter at Redbox and the remaining B&M stores don’t watch movies online or on demand. I don’t see this practice changing anytime soon because of a few new venues.
Agree. TV won’t ever search as well as internet.
Digital…hybrid service with strong partner. That’s the way to go.
Way too many points to discuss so I’ll stick to the bigger ones. First and foremost, 1st run VOD movies will NOT be $1 or less period. From the splitting of pennies round here I gotta figure, however you dress it up digitally it’s still a $3 + charge per movie (1st run New Releases), and if people are upset with a .25 to .50 raise in price for redbox why would they embrace a 300% increase for digital?
Next, the software/hardware issues ie. boxes, wires, upgrades, connection speeds, etc.. has a cost how much is debatable but once again we’re talking about being frugal, and that’s a fraction of the issues. In my opinion most use their perfectly functional HD cable box for those just gotta have it now absolute convince driven people, driven by the ease of use and quality of content, without concern for cost (HD). Redbox and the indi brick and mortars that can survive at $2 or less per rental will fill the slot for more cost conscious need it today customers (largest %). Netflix will get the rest and is best poised for digital delivery from technology to financing.
Now on to the ball-less, spineless old morons running the studios, there is such an easy solution to their woes, FIRE a few of those noncontributing executives and hire 30 tech savvy internet pros right out of college and shut down the online piracy for the masses (torrents,streaming, etc.) and start making a few examples ie. $2500 fine to a few thousand parents, it might wake them up. And as for the foreign sites no problem, a few properly attached viruses should do the trick. Also, hire a hundred spotters or so and give them $200 for every flea market pirate-movie retailer they can have arrested. Then they should really examine how to squeeze every drop of $$ out of their movies. Tier 1 – Theatrical/ Tier 2 – Video/VOD (premium price $35-$40 per DVD/BR & higher % from VOD)/ Tier 3 Redbox / Netflix / purchase at store (reduced price DVD at $12 or less) so then redbox and netflix can keep their costs in line make a profit and deliver enough content to supply the remaining demand. This way everyone’s happy, Studio’s would make a tremendous amount more per movie, the B&M can survive providing the service and human & selection factor, and the customer has all the benefits of options and cost.
Personally, I think the ‘human factor’ at b&m stores is highly overrated…It’s like when I go into a retail store to buy something, I don’t need some blubbering clerk breathing down my neck. I prefer convenience and low price, and to just get in and out with what I want/need as quick as possible! I don’t want to pay extra for the ‘human factor’ when it’s something that annoys me more than not!
who cares what you prefer why is that noteworthy? get a life
Not everyone handles the “human factor” the same, that’s another discussion altogether, but I would only equate that to attrition in retail. If BB and other huge B&M cannot provide good interaction that will be a component of their demise.
BTW Tier 2 should have been Video Store/VOD, sorry!
Er…the RIAA/MPAA *tried* the whole “fine some people and set an example” trick. It didn’t even slow down piracy, but it did garner a whole lot of ill-will on the part of the public. These organizations gave up and STOPPED suing individual end-users BECAUSE it wasn’t working.
As for viruses, uh, there’s this thing called a virus scanner? Have you heard of it? It scans downloads for viruses and removes them. In any case, how are you gonna put a virus in a data file, which doesn’t get executed? (It’s been done before, but they rely on exploiting security holes in specific pieces of software — holes that tend to get closed up, once discovered, in an even shorter time than it takes for anti-virus software updates to clean the viruses off in the first place.) Even if you could stop piracy with a virus, how are you going to spread your virus to the millions of copyrighted files being traded out there? Your virus would have to be better at infecting other files and systems than every virus that has ever existed in history PUT TOGETHER — because their combined power so far has yet to put a permanent stop to ANY computing activity.
I’m not saying there isn’t a way to stop piracy, although if there is, I don’t know what it would be. But I can guarantee you any solution taking the form “a few _____ should do the trick” is not going to work. Listen, nobody has a greater fear of piracy than the MPAA, which claims it is losing billions of dollars per year to it. If there were a simple “a few _____ should do the trick” solution to the problem, they’d have figured it out by now. There is a LOT of incentive to do so.
this website is the best but i dont know how it works
Did your store close recently?
“Did your store close recently?”….You meant to ask, “Did you get out of Juvenile Detention Center recently?” :-)
Really, is there a modorator here to keep the 6yr old’s from trying out the new swear words !!
TY Mod !!!!
personally, I never even use B&M stores for for movies (except for a few hard to find indie titles) and were it not for the tremendous cost of video games these days, I’d neverv go in one, I think Red Box should takeover that market.
Also the last of the 3 hollywood video store in my county are closing(started on the 21st) and I’d like to see bigger strides in Red Box deversifying thier selection of both DVD and Blu-ray titles seeing as how I know blockbuster is not very far from collapsing itself.