Inside Redbox is the #1 "Unofficial" Redbox Online Community for Redbox Codes, News and more. Inside Redbox is not affiliated with Redbox Automated Retail, LLC.

RedBox-LogoRedbox already made analysts nervous with the recent announcement that it will be closing several hundred of its kiosks. Now one of the company’s biggest cheerleaders is expressing some concern about Redbox’s long-term growth prospects.

B. Riley & Co. analyst Eric Wold, traditionally one of Redbox’s staunchest defenders, says that the company is entering a new phase in its business where growth will be difficult to come by. Said Wold:

“While our belief in the near-term stability of physical rental demand remains intact, with competitive pressures diminished or eliminated, Redbox will be increasingly impacted by industry changes and shifts in consumer behavior,” Wold wrote in a note to investors. “With that in mind, we project it might actually prove difficult for Redbox to grow revenues in the low-single digits (at best) as the company has moved away from promotional activity to drive traffic/margins.”

Wold also says that even if Redbox raises its prices, as it did a few years ago, the effects may not be too positive or long-lasting:

“While the previous Redbox price hike drove higher revenues per kiosk, the boost ended up being lower than the 20% increase and revenues per kiosk soon turned negative . . . Although we believe Redbox will test higher prices this year, we are less confident about the net benefit and ultimate decision to go through with an increase given potential impacts to basket size, holding period and/or necessary promotional support.”

Where do you think Redbox’s future growth will come from, Insiders? Or is the company going to slowly run out of steam?

[via Home Media Magazine]

7 Responses to “Analyst: Redbox Faces Tough Challenges Ahead”

  1. Visitor [Join Now]
    Vernon Dent [visitor]

    redbox’s ‘wheelhouse’ includes:

    -‘Soccer Moms’ looking for pacifiers for kids in the back seats of their mommy vans.

    -‘The Un-wired’ the endless number of those who can’t afford broadband, nor have the ISPs in their location.

    Just look at the title selection @ the redbox kiosks.

    There are just too many intermediary players in the streaming space and redbox’s brand is among the unnecessary.

    Does anyone think redbox will be creating something like “House of Cards” or Game of Thrones” anytime soon?

  2. Visitor [Join Now]
    DanoFive0 [visitor]

    I think there may be two sides to this to look at.

    1. If the net stays open like it is now. With no caps on your net use. RedBox will run out of steam in about a year. We must also look at the some that can’t afford the High speed net to stream videos. Are just don’t have ISP’s where they are at.

    2. IF? IF ? Comcast gets Time Warner again IF? But if they do. And start to put Caps on your net use. As they say they are. People will find they will go over the caps very fast. Just one HD Movie a day on NetFlix and you will be over your 300 GB a month limit in about 25 days. And all your other net use.. you will be over your limit in no time.
    IF the Caps come on your net use???? That could be a hand up for RedBox.. ?
    Again all kinds of IF? IF?
    So I am just going to sit and watch it all play out..
    Like many have said…. The FCC is in bed with the Cable Co’s.
    So all you can use net make be a thing of the past soon?
    just saying….

  3. Member [Join Now]

    rent 1, get 1 free M7TWZVJ3

  4. Visitor [Join Now]
    Logan Rollo [visitor]

    Redbox will run out of steam unless it is able to begin providing tv series on disc. By expanding the library in kiosks to TVonDVD series like Downton Abbey, Game of Thrones, The Walking Dead and Vikings, they can gain a huge boost in traffic and therefore rental profits. They will need to eventually change their model from a single night only to offering a choice at the kiosk to rent for 2, 3 or even 5 nights.

  5. Visitor [Join Now]
    cjc [visitor]

    sound of music

  6. Visitor [Join Now]
    tinybrat [visitor]

    Run out of steam, in a year?? Do some research.. 17% of homes in the US currently stream 1 or more movie titles per month. That means 83% of US homes do NOT stream on a constant basis.

    Also – Redbox profits have INCREASED even in the last qtr, meaning MORE rentals rather than LESS.

    Finally – Streaming services SUCK. Netflix is all about TV shows and kids stuff. Try finding any decent movies on it or Amazon. Until these companies can figure out how to stream content on day of release, redbox will be just fine.

  7. Member [Join Now]
    Chad Cronin [chadcronin]

    Streaming Rental is not cheap. Redbox is still the best place to go. I only have interest in the main titles and want Blu-ray. I am not a fan of prices increasing. I feel I have enough things going on where Movie rentals isn’t as big of deal. My local theater does $5 tuesdays, so I can see something new and not wait. If they are worried, then go back to $1 rentals and make Blu-rays $1 too. That would be great. Or maybe they should build a system that allows $1 tuesdays too and bill higher if kept more than a day