Great news for the movie rental world this week coming from the Associated Press. You can read the full article below, and make sure you look for an awesome annoucement coming this summer that will make us Redbox users very happy!
The article follows:
Redbox aims to bring a DVD rental machine to a lobby near you
JOSHUA FREED
Associated Press
MINNEAPOLIS – The big red vending machine at the McDonald’s whirrs and hums and spits out rental DVDs of Chicken Little and King Kong – and maybe, if McDonald’s is lucky, profits.
Machines run by McDonald’s Corp. subsidiary Redbox Automated Retail have popped up in hundreds of Golden Arches restaurants in six cities in an experiment to see whether they drive more customers into the stores. Rental chain Movie Gallery is experimenting with DVD rental machines, too, saying the machines will make rental transactions easier for customers and make its stores more efficient.
The spread of DVD rental machines comes as rental stores are struggling under a business model that hasn’t changed much from the mom-and-pop video stores of 20 years ago. The rental business has suffered from the sale of cheap DVDs, rent-by-mail services like Netflix Inc., and expanding video-on-demand from cable companies.
“We think it’s a tremendous opportunity,” said Greg Waring, Redbox’s vice president of marketing. “We think we’re providing a new model for the industry that is going to be difficult for the traditional retailers to compete against.”
About the size of a soda machine, each “Redbox” holds 500 disks and includes a touch screen so customers can pick a movie, and a credit-card reader for paying the $1-a-night fee. They don’t take cash. Customers return the movies at the machine.
Signs near the machines promote its movies – kids’ titles down low, movies for grown-ups on top. Redbox staffers load newly released DVDs each Tuesday. Redbox workers at the headquarters in Oakbrook Terrace, Ill., can monitor which titles are renting the most in each machine and adjust their selection accordingly. Generally there are 50 to 60 individual titles.
McDonald’s came up with the idea in 2003 as it looked for ways to draw more people into its restaurants. It began experimenting with the machines in Denver in 2004 and now has 750 machines in restaurants in five cities, including the Twin Cities. It’s measuring their popularity and whether they draw more people into the stores.
Its subsidiary Redbox isn’t waiting to see how the McDonald’s experiment turns out. It has placed the machines in 75 grocery stores, and has signed agreements for 400 more grocery locations, including Stop & Shop and Giant stores owned by Royal Ahold NV in the Northeast.
This summer, the company plans to let customers go online to check title availability in a particular location and rent a movie on the spot for pickup at that machine later.
Waring said their market share of all DVD rentals in Denver is in the low- to mid-teens, and that includes Netflix customers. Redboxes there average about 1,200 visits a week, including both the rental and return visit, Waring said. He said he didn’t know how many of those customers ended up buying food rather than just stepping in to rent or return a movie.
“We have some very aggressive projections in terms of our growth, led by McDonald’s locations,” Waring said. “There’s over 13,000 McDonald’s restaurants in the U.S. We foresee a day when we’re in the vast majority of those.”
In Apple Valley, a suburb of the Twin Cities, Chris and Teresa Kliner stopped at a McDonald’s for both a meal and a copy of Chicken Little for their daughters to watch during a visit with relatives in the Twin Cities. The Kliners, of Kenosha, Wis., used the machine to avoid signing up at Blockbuster to rent a single movie.
“With kids, it’s easier this way, because they’re not running all over the store,” Teresa Kliner said while daughters Olivia and Analiese played on the slides at the restaurant’s indoor playground.
While sales are growing fast, Redbox doesn’t appear to be profitable yet, according to comments made by minority investor Coinstar Inc., a vending company based in Bellevue, Wash.
Coinstar spent $20 million in December to buy a little less than half of Redbox, while McDonald’s retained a majority stake. Coinstar also loaned $4.5 million to another DVD vending operator, DVDXpress, and sales at those two businesses combined grew more than 85 percent between the third and fourth quarters of last year, Coinstar CEO David Cole told analysts in February.
But Coinstar also predicted Redbox would lose money this year – $4 million to $5 million for Coinstar’s share of the company. That works out to $8.5 million to $10.5 million. Waring declined to comment on Redbox’s losses, other than to say the machines themselves are profitable. Coinstar declined to comment on Redbox’s profitibility.
Movie Gallery, the rental chain that bought Hollywood Entertainment Corp. in April 2005, is also experimenting with DVD rental machines. Chief Financial Officer Tim Price told analysts on Nov. 10 that its machines will hold at least 1,000 disks, and some hold as many as 5,000, and can be used 24 hours a day.
“We’re very early in the results, but still very, very encouraged,” Price said. Movie Gallery declined to comment for this story.
Wedbush Morgan Securities analyst Michael Pachter said he believes Movie Gallery is aiming to see if it can cut store hours, leaving the machine to rent movies even when the store’s doors are locked. Movie Gallery hasn’t offered any clues about how well the experiment is going, or how many stores have rental machines, he said.
DVD kiosks can probably grab spur-of-the-moment customers, but Pachter questioned whether they can dent the business of stores like Blockbuster Inc. and Netflix. Most customers rent new releases, but they still like the idea of a wide selection at a store or from Netflix’s 55,000 titles, he said.
If Redbox gets into every McDonald’s in the country, he said, “maybe they’ll get up to 5 percent market share. Maybe.”
Blockbuster Inc., the nation’s largest movie-rental chain, has operated vending machines in some international markets but has no plans to do more, spokesman Randy Hargrove said.
“They don’t generate significant rental volume or significant revenue,” Hargrove said. “They just don’t have the capacity to do that.”
Jeff Smith, a McDonald’s franchisee who owns seven restaurants and runs a cooperative that buys advertising for Twin Cities McDonald’s, said he doesn’t know whether the DVD machines are bringing in more customers because so many other variables, like the weather and promotions, affect whether people eat out.
But he says his customers love the machines.
“The only thing I invest is my space,” Smith said. “We don’t get paid anything, and it doesn’t cost us anything to have it.”
Are there any pictures of the kiosk and the UI. Redbox sounds like an interesting idea but in all comes down to the implementation…
Tapeworm
I don’t know of anywhere there are a bunch of photos of the Redbox, but from my point of view the UI is more than adequate for the job. It is simple to use. Perhaps this is a good place to explain the user experience.
First off, the main Redbox system use a touch screen.
When you arrive, you are presented with 2 large buttons that take up the entire screen that say “Rent a DVD” and “Return a DVD”. There is also one smaller button on the bottom that says “Rent with a Promo Code” (this is my favorite button!)
Then, when you get into the system you are presented with images of movie jackets and movie titles below them. You can sort by release date and alpha by title.
When you touch a movie, it brings you to a screen where you can see the details, go back, and add the movie to your cart. You can add multiple movies or just “checkout” with the one movie.
The checkout is simple, you slide your card, enter your zip code, and optionally enter your email to get a receipt, and the movie is vended. If you paid for multiple movies, they are all vended one at a time.
So, thats the basics, and it is effective. If you are a frequent user and you know what you want, you can get your movie in less than 60 secs from start to finish.
Hope this helps.
What if the box was not working right, and replying that the movie was being entered wrong, several times but finally took it, how can I know that it credited the account?.
You should contact Redbox by calling their customer service number at 1-866-REDBOX3, they will be able to tell you.
I would like to know why if my husband use the movies he rented for two days you charged him 3 days and the charges are still going on. I learned about this right now since I’m revising my checking account. I will call you to find out what’s going on.
I was on a short trip to Maryland and discovered RedBox. WOW this is one great idea. When will it be available in south carolina ,Fort Mill area?
I would like to know how long one may keep a movie, and if there are any other charges than when you charge the initial dollar when you get the movie?
hi, can you tell me if there is or will be a possiblity to independently purchase a Red Box as franchise business venture in the States? thanks for your time.
tobi
how do u get started.
I need to get in touch with your company and or representative in Puerto Rico area to check out the posibility of locating your Red Box DVD rental machines at all our stores. We have 16 location with a high traffic count open 24 hours in the San Juan area.
Eugenio Cisneros
COO
7 Eleven Puerto Rico
eugenio@7-11pr.com
.
Please send me to my e-mail your contact phone number
My family and I just returned from a trip to Charlotte, NC. We saw a Red Box and used it. We loved the concept and want to know if this is a franchise opportunity, and how to get started in NJ?
For the past two weeks I have contacted Redbox three times about locating a machine at my convenience store but have received no response, are they that busy?
Was wondering if there is information on owning a franchise from redbox, please let me know
How do I get in touch with someone to find out how I can get some Red Boxes at the Oregon Coast. I have some great locations need to know how this works. Please contact be also by phone 503-659-7263 or 503-888-8413.
Very interested please contact us asap…..
Shauna Swain
For information on getting a Redbox at your location, you can contact Redbox by going here:
http://www.redbox.com/Help/B2B.aspx
ya i returned a dvd and redbox charged me 25 dollars for it a month and a half later. i know i did because i lost my baby on july 5 and i had my brother take it back they sent me an email saying that i returned it so be careful
I have rented the last three DVD’s from Harris Teeter HWY 401 & Hwy 42 Raleigh, NC.
Mid way of the show the DVD stops, and will not continue. Now 3 bucks is not a big loss, but having to drive to Harris Teeter, and then back home on three trips and then to be disapointed that I could not view the movies. The Red Box has no way to get your money back or top return and get another movie.
What do you recommend.
How close are red boxes to Venice Florida? When can we expect them? We have three Mc Donalds. We used them in the Kansas City area, they are great.
Thanks,
Larry
i really need a contact number please
cmichel1031@yahoo.com
1-866-red-box3.
Dear Redbox, I need to know the nearest redbox near me in Satellite Beach Florida, 32937
Will the Redbox machines be franchised out any time soon?
I have several locations to put them that would produce an abundant amount of revenue.
Thanks, Paul
I also have several location for these machines. Still waiting for he franchise opportunity. Contact me.
Thank you,
–Enri
Red Box continues to withdraw $3.00-$4.00 from my account on a weekly basis and I am no longer renting movies!!! I need to be contacted or have contact info please!!!!!!!!!!!
I work for a convenaince store chain. I was in a McDonalds and saw the Red Box Kiosak. I would like more info. So I can pitch this idea to replace the picture Kiosak that is in plae atb this time. I believe that that is a more profitable business venture then they presently have. Please tell me where I can get furture information on this service or Email me all pertanent info. as to your services. Thank you. Dave
I look forward to your response.
I COULD NOT BELIEVE THIS!!!! On Jan. 9, 2008 I rented the newly released “3:10 to Yuma” with Russell Crowe (?). It was released to DVD on that day in Indianapolis, In. WHAT DID I GET FOR MY DINNER PARTY? What I got was the 1957 version of “3:10 To Yuma” with Glenn Ford.
Needless to say, Red Box’s error RUINED the dinner party. We paid to see the new release and got a 51 year old black and white version of the film.
I have kept the old film. I want a refund for the film and other compensation for the false advertising.
My home phone is 1-317-885-7797.
Larry Blubaum, 466 White Oak Lane, Greenwood, In 885-7797
I would like to get info on how to become part of the franchise.
I would like to get info on how to start my own Redbox franchise.
I, too rented 3:10 to Yuma and received the 1950’s version. It is a HUGE inconvenience and would like my money back.
I rented 3:10 to Yuma and got the 1957 version. What gives? I’d like my money back and a free rental for another night.
I too rented 3:10 to Yuma on 1/14. Actually, while very surprised, we did enjoy the 1957 version. Have still to see the current one for comparison.
Did anybody who received the wrong copy of Yuma call the Redbox service line at 1-866-redbox3 ? That will notify which dvd it is and they can get it pulled so no one else has this issue with that disk. I am sure that when you call them they will treat you right about your rental issue too.
I wrongly dropped off a video from DVD Play at Red Box Kiok.- Keizer-OR…how I can get it back to me?
Thanks
Do you guys have a office? With real people? Your 1-866 doesn’t helped me at all!
interested in red box movie rental kiosk
TO all that a so lame and cant read that is your own dumb fault there are two versions available of 3:10 to YUMA
PS try again and use promo
Code: DVDONME
and have a movie on me
I am an employee of REDBOX and our cutomer service is 110 % and so our Movie kiosk’s
Wow, reading the description is half the battle. I saw Transformers NOT the new movie @ the kiosk and passed on it after almost renting it in error. The customer is NOT ALWAYS right. Admit a mistake when you make it.
i need to find a redbox closer to my house, but the website for red box,is not working properly…..
Please could you provide me with some information with regards to possible distribution of your products out side of the USA?
We rented from a grocery store 50 miles away from our home. We live in a very rural area and do not have a lot of choices when it comes to movie rental. This provides nice and cheap entertainment for the family and helps when we have to drive so far also. I hope you have a franchise opportunity coming up soon to help us in the very rural communities. This could be a great opportunity for us and profit for you as well. Thanks for such a great idea.
Please let me know!
We live in Key West Fl. would be interested to see about a franchise. If anyone has information ya or na please let me know.
Thanks