On Friday, the Chicago Tribune ran a story chronicling Redbox’s history, its recent scuffles with some major Hollywood players and its rise to become one of the titans of its industry. It’s an excellent article and well worth a read for any Redbox fan (or foe). Here are some highlights:
One Billion Dollars
Redbox reached sales of $388.4 million last year, and is on track to hit $1 billion in sales in 2010, according to analysts not cited in the article.
Market Share Multiplied
The percentage of videos rented from kiosks (among which Redbox is the dominant player) has leapt from 2 percent in the first quarter of 2007 to 19 percent today, according to research firm NPD Group Inc. Blockbuster and other traditional brick-and-mortar stores have seen their market share reduced to about 45 percent, while Netflix and similar businesses comprise the remaining 36 percent.
Old School Origins
Back in 1984, Redbox CEO Mitch Lowe started a company called Video Droid. Lowe had been a partner with a video rental company and was tired of the overhead costs associated with the business. With some partners, he retrofitted regular soda vending machines to dispense VHS and beta tapes and placed them in grocery stores. Lowe built 60 machines before the business failed.
Nearly twenty years later, Lowe was a consultant to McDonald’s and became part of the Redbox project team that developed the kiosks with Coinstar. This time around, Lowe has been able to see that his video vending machine idea had potential after all.
“I hate losing,” Lowe said. “I hate the fact that I failed with what I thought was a great idea.”
Give the People What They Want
Redbox gets its consumer data from biweekly surveys of 20,000 to 40,000 customers. Lowe credits much of the company’s success to its habit of listening to its customers and giving them what they want:
“(Our customers) are telling us that they have really fallen in love with Redbox. But they’re also telling us that they really want films in lots of different ways. . . We’re going to let the customer decide.”
As they explore new options, including downloadable videos and video game rentals, Redbox is clearly listening to its customers and not resting on its studio-infuriating laurels. Whether you are a dedicated fan or an angry opponent, there’s no denying the company has accomplished a lot in its relatively short history.
With many opportunities and just as many challenges approaching in the near future, where is Redbox going from here, Insiders?
[via the Chicago Tribune]