As the icy waters of retail death engulf Movie Gallery/Hollywood Video, Merriman Curhan Ford analyst and frequent Redbox commenter Eric Wold says that the kiosk renter should see a major revenue boost. Wold believes that former Movie Gallery and Hollywood Video customers will gravitate towards Redbox and Netflix as more and more retail locations are closed.
According to Wold, “the departure of Gallery/Hollywood leaves $1.4 billion in incremental home entertainment revenue, including $750 million in DVD/Blu-ray Disc rental up for grabs, based on the company’s 2009 revenue.” Based on those figures, Wold then factored in the average Redbox rental transaction and came up with the following:
“Assuming that Redbox gains 20% to 30% of those [159 million rental] transactions … we estimate Redbox could see an incremental … $31 million to $59 million in gross profits over the forward 12-month period,”
Wold is sometimes regarded as a bit of a Redbox fanboy—how do you think his figures add up? Will Redbox really see such a boost from the demise of Movie Gallery? Where will Blockbuster and Netflix’s piece of the pie factor in?
(via Home Media Magazine)