We recently posted a story discussing Redbox’s limited sellthrough kiosk test currently taking place in Southern California. The black boxes carry the Vidigo brand name and hold about 200 discs, priced up to $20.95 for DVDs and from $24.95 for Blu-rays.
While Redbox has not yet determined an end date for the kiosk test and is reserving judgement on its success, several analysts from respected firms have spoken out against the black DVD vending kiosks in recent days.
According to Home Media Magazine, analyst Michael Nathanson of Sanford Bernstein in New York said the tests “represent a goodwill gesture to the studios and not much else”. Additionally, Nathanson said the fact that the black boxes are not located near large retailers such as Wal-Mart and Target “underscores their limited potential”. He summed up his analysis with the following:
“Who would buy a DVD from Redbox when it is known for the $1 rental? No one.”
Another analyst, Edward Woo with Wedbush Morgan Securities in Los Angeles, said that if Redbox doesn’t compete with or undercut retailers such as Walmart on price, the concept will fail.
“Redbox is successful because of the $1 per day rental, and unless they sell movies at a low enough value, they will remain just a DVD rental service,”
I think many would agree with Woo that twenty bucks for a DVD or $25 for a Blu-ray seems a little steep for most consumers, especially since the black boxes’ products appear to be positioned as impulse buys. Are these analysts right on the money, Insiders, or is Redbox going to be able to work some black magic with its sellthrough kiosks?
[via Home Media Magazine]