Not all analysts think Redbox’s recent disappointing Q2 numbers will be improving any time soon, it seems. William Blair & Co. analyst Ralph Schackart, for one, believes that the impact of Redbox’s 28-day delay deals on new releases from the Hollywood Three will continue to haunt it. Not only that, but Schackart also sees more studios jumping on the delay window bandwagon in the not-too-distant future.
Says Schackart:
“We believe the impact of an increasing number of titles delayed 28 days is still too great a risk to get positive on [parent Coinstar] shares . . . Over the next couple of years, we expect all major new releases to move to this model.”
Is this bold prediction on the money or way out there? What would the future look like for Redbox if it was saddled with new release delay window deals from all or most studios?
(via Home Media Magazine)
What would the future look like for Redbox if it was saddled with new release delay window deals from all or most studios?
Its irrelevant if *all* kiosk/mail-order merchants are faced with “quarantine issues”.
redbox’s biggest mistake is eliminating/restricting promo codes!
If it brought back promo codes to the 2009 level, its revenues and contributable earnings would rise. Everyone knows that the average rental period is *~2.5 days*, but without the promo codes, rental volume decreases.
Of coarse volumes decrease, but if people are not paying for that volume cause they get it free then it wont increase profits. Promo codes are only good for the locations that the redboxes are in to get people to go to the walmart for example for a movie and end up shopping “while their out”……
And when you got places like on demand advertising “why wait for redbox get it here now”……. Redbox stands no chance.
http://www.wisebread.com/never-pay-for-a-redbox-dvd-rental-again?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wisebread%2Ffrugal-living+%28Wise+Bread+%28Frugal+Living+posts%29%29
..Prime example, people like him bragging about how he never pays for movies because of the flawed promo code system. to quote from it …
“Why pay anything for a DVD rental ever again? For the last month, I haven’t paid for one new release movie at RedBox, and sometimes I’ve rented two or three in one day. It’s legit, it’s easy, and if you ever pay even one cent for a DVD rental again, well, you’re paying too much.”
Not going to click the link, but is it about the ‘redbox code generator’ ? I was googling for current Redbox codes on different coupon sites last week and came across something on youtube video for a free download for a ‘redbox code generator’ whereas it generates unique Redbox codes for you. Said it was how Redbox generates its codes and it was ‘legit’ –but I don’t see how! Because I’m a coward and not wanting to chance getting a computer virus–Try it for us Peter, and report back with a few dozen ‘legit’ generated Redbox codes!
In a competitive world it would seem unlikely that all the studios would fall in line. If all the studios were were at a 28 day delay wouldn’t one or two of them go the other way to get an edge in distribution? Also doesn’t have to be all or none. Studios could demand certain titles, based on box office, go into the delay bucket. No reason to keep all titles on a delay.
Studios will start to evaluate which titles they want day delay ons:
Expect Iron Man 2, Toy Story 3, and the A-Team as these will be
the big Holiday releases to be delayed at rental to push Q4 sales limits.
Redbox, in the short term will have to increase titles where and when it can in kiosks, so expect WAAAAY more ‘Redbox Replay” titles eating up the
week’s new release period ( this week alone saw 7 , yes 7 replay titles
released in the mix), as well as more indy /documentary fare filling the slots.
Also on the rise, more “mini Series” that played on TV will be released
as “complied movie titles” onto disc, example being the release of
the BBC serial Killer mini, “Red Riding”.
As for Promo codes, Redbox is going to let those go, get used to it.
They are in business to make a profit, and this Q2 report shows that
they got turn up the heat in making a buck, not saving you one.
The 28 day window makes no difference. People will tire of the red box soon enough. My few experiences with red box have been total disappointments. There is so little selection and the discs are in terrible shape. The little video store across the street has all the new releases AND awsome air conditioning. IMHO redbox is just a passing phase. I wouldn’t invest in it…
So you are outside the bell curve. Lots of people hate netflix but many more love the service. Same is true of redbox. My little video store doesn’t allow you to reserve ahead.
Redbox growing, stores closing…which is more of a passing phase?
I agree with Redbox being a disappointment. You can’t ask a machine questions like: is a movie good, when is a movie coming out and many others. With video stores the employees know stuff like that and can help you. Plus, with fox-universal-warner bros. 28 day delay it will increase revenue for these stores and the studios sales because of anticipation. Redbox can’t hold a good selection like video stores with new releases, games and old category movies plus their sell items.
Redbox can’t compare and i hope more studios go to 28 day delay.
You could order online,and goggle the movies you want to see.. just cause you goto a movie store don’t mean they are going to know the lame movies you are interested in, or have the time to be bothered by you annoying questions. They are there to rent you the dvd’s not make decisions for you….
i think you are missing the point of Redbox. it’s not supposed to have a huge selection. it’s a small collection of current titles and some re-plays. enjoy your video store. i’ll be across the street getting my movie from Redbox. no line, reserved ahead of time, and no mind numbing chit chat.
I still think the RB phase will pass and any video rental stores (besides blockbuster) will come out the winners. My rental store allows you to reserve movies and the owner will tell everyone that what he really sells is customer service. I’ve never seen anyone leave unhappy and actually hear a lot of gripes about the RB. Time will tell I guess…
Hard to imagine the kiosks losing to video stores at this point. Kiosks are so damn efficient. That being said there is no reason why the better run video stores can’t survive. The first law of nature is survival of the fittest.
You obviously have no clue on video business. It will be a close race but in the long run video stores should prevail. (are you wanting machines to take peoples jobs.) Survival is the key! The stores have better selection, help, movie return time, and most have special promotions for the big releases. TWILIGHT for example: my store was selling at midnight and was cheaper than Wal-Mart.
Redbox can’t do promos like chain stores.
‘…but i work at a grocery store…’
‘Sony and Lionsgate are rumored to try the 28 day delay in 2011’
So you work at a grocery store and hear rumors about Hollywood deals? Nice one. Do you sell lotions of the month perhaps as well?
Yeah stores are better but they charge more and are less convenient. Surely there must be some reason so many people use kiosks? Can you think of any reasons?
They can make money at a $1 because they don’t employee as many people per square foot. If this causes others to lose jobs that is just how America works. Those would be video clerk salaries are being added back to middle class families pocketbooks. That’s a good trend overall.
If only Coinstar could actually make a real profit on $1.00 rentals then you might have a point FLON.
But as they pointed out in their quarterly report, when their lotion of the month ain’t so great, they see numbers collapse.
Welcome to the real world Redbox.
So you are back to saying redbox doesn’t make a profit? Tough quarter and they still made some shekels.
I’ll still use vending machines over expensive stores or mail services anytime. I’ll wait even longer if I have to, its not like the movies they make these days are that good that I have to get them right away. If a movie was that good, I’d go see it in the theater. If vending machines go away, I’ll wait even longer and get my movies from the library…
I’m calling B.S. on that one Carson. My video store is cheap and you can rent it for 2 or 5 days plus the store down the road has $1 rentals like redbox. People are not going to wait to see a movie that long. My area has 2 video stores, 2 Redboxes and we use to have a Blockbuster but it closed this past month and they are all with in a couple of miles from each other.
How can redbox make its money if its just $1?
They probably have deals with walmart, mcdonalds, sonic, walgreens etc, because if people are coming there to get DVDs they will shop while there, and then they have to come back the next day to return it….. win/win Same reason stores have sales to get people into the store for 1 thing and sell them 100 other things.
I think you nailed it there with “the store down the road has $1 rentals like redbox.”
If video stores want to survive they are going to have to drop their prices. Gone are the days of $3 or $5 rentals for me and many, many others. Especially when you can buy the movies so inexpensively. I’ll buy the movies I really, really like and can wait 28 days for the rest. For everything else, there’s TiVo.
Since I live in a congested area of Chicago where store rents are high, RedBox and NetFlix are the way to go. We will become a ATM and automated machine society. You can buy proactive and an IPOD from a machine already. All you need is individuals to stock and repair the machines.
All the video stores here are too expensive or nonexistent because of the high rents. I think that RedBox is much more profitable instead of these rents. However, 7-11, Albertsons/Jewel will want more of a kick-back in the future from Redbox.
@Underwhelmed that is 1 independent video store. That’s certainly not the norm. Traditional brick and mortar stores are the way of the dinosaur with kiosks, VOD and streaming to watch content.
Look i don’t see where the 28 day window is hurting Netflix any. If more studios do this and then Blockbuster folds, then what? The movie studios really are going about this the wrong way as most people will not buy a movie without having seen it first either in the theatre or by rental.
That’s a great point. If blockbuster ends up being the only place without the delay and they go out of business, well then there really isn’t a delay after all. I already look at it this way. They have been been releasing titles earlier and earlier so to me having the 28 day delay has no effect on me what-so-ever. I actually don’t look at release dates at all except on the Redbox machine itself.
I don’t know where u live but i work at a grocery store with a video store and its a big chain. No one here want to use credit cards so we get their business. We are growing and expaning every year. Right now we are in 3 states and have over 150 stores.
I live in the midwest, so we don’t have this chain you won’t mention cause I know none here have rental anymore. I enjoy sliding my debit card in a slot over having to handle dirty money any day. If people have other options, good for them. I am looking at things nationally. For more and more people there is less places to rent and they are more out of the way then Redbox. Also all the greed makes people care less about rushing out to see mediocre movies that rehash the same scripts with the same old tired actors.
Video on demand has no delay, and is hardier to pirate
I like VOD. If they could perfect the fast forward, rewind, slo mo, and zoom, plus offer HD @ a fair price, then I would like it, but paying my cable $4.99 for 1 speed level for ffwd and rewind is not very appealing.
I find it hard to belive that EVERY studio would do this. I certintly hope they don’t. I really don’t understand the 28 day delay. It seems like the big 3 companies are just doing this so Blockbuster can get more buisness.
Blockbuster isn’t getting that business- they are closing stores every year. Plus, the companies make more money when they do the 28 day delay because no one wants to wait for a big release.
Oh, I see. The new article that was posted make me realise that more
This “analyst” obviously doesn’t listen to studios feedback regarding the delay. Many of the studios have stated that a delay would hurt their revenue streams and do nothing to help studios bottom line. If I were to put money on it, I would bet the opposite, that the main 3 studios will void the 28 day delay within the next year or two.
I would take that bet. Sony and Lionsgate are rumored to try the 28 day delay in 2011.
This is a quote yesterday from Jeff Bewkes-CEO of Time Warner.
Early agreements from Netflix (NSDQ: NFLX) and Redbox to delay renting new titles until 28 days after they are first available for purchase in stores is already having positive results for Time (NYSE: TWX) Warner’s film segment, said CEO and chairman Jeff Bewkes. He said that Time Warner was able to take advantage of the 28-day window for big titles and Bewkes claims that releases for The Blind Side and Sherlock Holmes sold more briskly than they might have otherwise. “Other studios that have taken advantage of the delay in rentals are seeing similar sales growth of DVDs, while other studios not using that window structure appear to be under-performing,” Bewkes said, though he did not offer specifics.
Brewer is only looking at the two opening titles in the 28 day delay window,
when Consumers din’t have other choice or didn’t know any better.
“Sherlock Holmes” and “The Blind Side” were two of the big four titles
that were the “test” in the 28 delay. Of course they would have high numbers,
because the consumer got blindsided by this.
I bet if we take a poll of sales figures on titles now, there number s don’t match
Sherlock Holmes or The BlindSide’s numbers. For that Matter, Alice in Wonderland’s
numbers beat Sherlock Holmes, and it wasn’t delayed…..get your facts
right Bewkes!
what bewkes said falls under “duh” i don’t think anyone other then paramount and disney trying to talk up their deals with redbox denies that sell thru is better off with the delay. I agree also that by fourth quarter more studios will delay titles even with the deals they have in place.
4th quarter is the biggest one of the year. so for sales redbox will fall hard because most people will purchase rather than rent- its a holiday quarter “duh”. Video stores will be on the rise.