Redbox has become the dominant force in physical disc rentals in a relatively short time, as it was not that long ago when blue and yellow-painted Blockbuster signs seemed to dot nearly every corner. Now Blockbuster is history, and Redbox operates well over 40,000 kiosks.
Despite most people inside the industry feeling that physical discs have peaked, Redbox continues to weild considerable clout with the studios, as proclaimed by Galen Smith, CFO of Redbox parent Outerwall.
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Says Smith:
“We are very important to [the studios] . . . We’ve never had a compelling reason to have a contract with [Disney]. We think we can drive more value (i.e. margin) by being out of contract with them.”
An industry observer agrees with Smith that most Hollywood and independent studios see the need to play nicely with Redbox:
“We all want digital [purchases] to be the saving grace as physical used to be, but that’s not even close to being a fact . . . Everyone’s doing it. Everyone’s taking them [Redbox] out to lunch . . . Both the studio partners and Redbox realize they need each other,”
So Redbox has the disc rental market dominated as Blockbuster did just a few years ago. But as we all know, seemingly unbeatable Blockbuster fell in a big way. Will Redbox share BB’s fate?
[via Home Media Magazine]
Like going to me local Blockbuster, it was next to grocery store, so it was convenient, then they closed, and no Redbox was nearby, so I migrated to
online rentals, and like most, we are creatures of habit, so I was only using rentals via Amazon and Netflix and cable movie rentals. But like everything, what worked yesterday does not mean it will work today, never mind tomorrow, so like Blockbuster, Redbox will fade away as streaming becomes mainstream access to all TV shows, Movies, PPV, and watch what you want when you want, and without the hassles of accessing Redbox in severe weather like many suffered through this winter season. So as I see it, Redbox is not viable long term.
Redbox is clearly the bottom feeder now. As long as subscription services will be out of the budget range of many who are struggling financially, the kiosk business as a inexpensive form of entertainment.
Its a sad reflection on current economic conditions.
Sorry for the errors, I missed the last cut and paste …
Redbox is clearly the bottom feeder now. As long as subscription services will be out of the budget range of many who are struggling financially, the kiosk business as a inexpensive form of entertainment will continue.
Its a sad reflection on current economic conditions.
Until the streaming price point comes down, Redbox has a market. I can drive less than a mile and pay $1.50 or rent it on my tv for $4 or $5? I’ll drive thank you.
Until the VOD price comes down it’s a non starter for me to see new releases.
I totally agree with jamie, online streaming is way too expensive. Streaming movies should be $1 tops. They have no physical media to buy & distribute. Sure, servers cost money, but it costs a heck of a lot less than buying DVD’s and running around stocking kiosks. I have 2 Redbox kiosks within walking distance, so I refuse to pay exorbitant amounts to stream.
Three things.
1. You can’t beat the streaming price of NetFlix. $8.00 a month all you can watch. And if you want old TV shows & Movies. Warner Archives. $9.99 a month.
NetFlix in the mail three out at a time. I get 5 movies a week. That comes out to less then a buck a movie. At the $17.90 a month i am paying for the month.
2. You need to drive over and get the movie at the box. Then take it back the next day. For some that is no big deal. For others?
3. Now this can be a life boat for RedBox. The Caps that are coming to your Net Use. If Comcast get’s Time Warner. And I bet they do. Don’t count on the FCC for anything. They will put a 300 GB cap on your net use. Now people will say 300 GB. That is all kinds of space/room. But do you know if you stream 7–8 Movies on NetFlix you are pushing your cap limit. And that is not with your everyday net use. If you have a family, you are going to be over in no time.
And the next thing you know. Zip you have a $150, $175 buck Net Bill.
And this could be where REDBOX comes in. People will stop,slow down on the streaming. And go back to the Disc in hand. And REDBOX could be the place to go.. Just a thought.
Physical will eventually fade away BUT it will take some time. 1) There are plenty of people who agree with Jamie and refuse to pay several times more to stream a movie than to rent the disc. 2) Maybe not as important, but still a consideration to many, is that blu-ray discs provide significantly better video and audio quality than streaming. 3) Likewise, discs often include extras which you don’t get with streaming. So, better quality + extras for much less than the streaming price = RedBox will remain a contender until that situation changes.
A few things that will happen this year.
1. Comcast will get Time Warner. It should never happen. But it will. When it will happen? But it will be this year.
2. The Caps on your net use will start. What they will be? How much?
3. Physical disc will be here for years on end yet. And all this can be a life boat for RedBox..
Jamie and whatever, you guys hit the nail on the head, and I agree with all points. I Redbox because of price point, blu-ray, and bonus/extras. Also, Comcast has already hit me with a 300gb cap as of December. I have a large family and we don’t do any streaming, and have averaged 250-280 gb per month! So streaming just is not viable for us right now.
you guys lost me a long time ago when you started raising the price from 1.09 – 1.59…netflix and hulu + beat redbox hands down with the amount of content…
netflix and hulu are $15 total…if you buy a netgear box or roku, the amount of movies and tv shows far outweigh the price redbox is charging as mentioned above—drive to the kiosk and drive back to return the disc…if you have the internet and these devices, you can watch movies or tv shows 24 hours a day!!!…
I don’t physical media going away anytime soon, especially with the price of VOD. I like Redbox and get maybe 3-5 movies a month. Totally worth it!