Hot on the heels of yesterday’s commentary on customer choice from Mitch Lowe, we have some more insights from the head of Redbox. In a recent Q&A session with Forbes, when asked if some studios are behaving emotionally and irrationally by trying to cut off Redbox’s access to new releases, Lowe concurred with that assessment:
“Historically, they have been [acting emotionally and irrationally]. I dare them to show that we’re cannibalizing their sales. Not one studio has gone public with any proof of that. They just assume that renting at a low cost hurts their sales.”
Lowe goes on to state that Redbox has become “a convenient scapegoat” for the studios’ DVD sales woes, when at least some of the blame should be placed on increasing consumer discretion when it comes to film buying.
“People’s shelves are full of movies. They’re being more selective about what they’re purchasing.”
When asked why Redbox doesn’t agree to higher rental fees, which will translate into more profits for studios, Lowe stated the following:
“We pay the same money for the movies as Blockbuster–sometimes even more. So why shouldn’t we charge less to rent? Maybe the question should be: Why doesn’t Blockbuster charge less? The most amazing way to deliver movies to people is where they shop. We cut out real estate costs, and we’ve come up with a much more effective model.”
Half of the major studios love Redbox and “get” the opportunity it provides with its massive kiosk network, Lowe says. The other half needs to understand that instead of imposing restrictions, they should be acknowledging the boost to profits that Redbox can provide. Lowe thinks that the studios that “don’t get it” aren’t basing their feelings on facts and will change their minds at some point.
“…With our huge presence we can help promote films. For example: Management. It didn’t do well in theaters, but we promoted it heavily, and it made more in the first week in rental than it did during its entire theatrical run. . . We do a lot for our partner studios. We promote theatrical releases at no extra charge to the studios.”
Is Lowe talking sense, Insiders? Do you think that the rest of Hollywood will come around to his way of thinking? Give us your thoughts in the comments.