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Redbox Going Public – IPO on the way…

Redbox has issued a press release telling of their intention to file an IPO. They will file their registration statement sometime this quarter, 2Q08.

Text from the press release as follows:

OAKBROOK TERRACE, Ill.–(BUSINESS WIRE)–Redbox Automated Retail, LLC, which provides a fully automated DVD rental system featuring new release rentals for $1 per night, today announced that it intends to file a registration statement for an initial public offering of common stock, subject to market conditions. Redbox expects to file the registration statement with the Securities and Exchange Commission during the second quarter of 2008.

So, do you think Redbox will be successful with this move? Will you buy Redbox stock?

29 Responses to “Redbox Going Public – IPO on the way…”

  1. Visitor [Join Now]
    prohmimo [visitor]

    Will I buy Redbox stock? I rent their movies for one day for free with codes, and I think even on the margin they lose money on me, because they have to pay a fixed fee each time they put temporary authorization on my credit card. I’m definitely not profitable for Redbox, but will they ever be profitable overall, earning money from others? Vending machines will outlive Blockbusters and other b&m stores, and will be around for the next 10 years, but in the long run the winner is movies-on-demand technologies, with unbeaten convenience of getting movies with a press of a button.

    I will not buy Redbox stocks, but Redbox is likely to be successful for some time. There is a significant market to pick up. But instead of installing redboxes evenly across city and the country, they have to take markets one by one. Installing only one redbox on a university campus with 30,000+ students is a wrong business decision. There should be more, much more. They have to dominate the market. They have to become a brand, to be the first answer to a question where to rent a movie. On numerous occasions I have to wait to get a movie from the only redbox on campus. But there is also a redbox in a MacDonald in the other part of the city near a highway. I have never seen anybody taking movies from there. They have to think better on where to install the redboxes. They have to be a bit more flexible with pricing schemes, and in addition to $1/night, they have to clearly beat Blockbuster by price on the their terms (i.e. 5 day rental for $3 or so). And finally, these are vending machines, and disks and disk boxes get dirty. When servicing the redboxes, they have to check to be sure everything is clean. They have to be appealing to higher ends of the market as well. Richer customers – higher profits.

    • Visitor [Join Now]
      john [visitor]

      I think redbox will do well…i use it all the time..fyi promo codes only go so far..i could see if they had 10,000 working promo codes floating around on websites for anyone to snatch up…plus u can’t use them again once you’ve entered them in.. they do have websites for promo codes but not many work…trust me i’ve tried…

    • Visitor [Join Now]
      Infoadviser [visitor]

      This is a reply to Prohmimo..You are profitable to Redbox but too dumb to know it! Just to let you know, I’m guessing you don’t or you would have mentioned it in you blog but McDonalds..(not MacDonald) maybe you were thinking of Old MacDonald had a farm…owns Redbox along with CoinStar. Do you think these very large and successful corporations don’t know what they’re doing? Do you think they would send you 2-FREE movie codes per week if they were losing money? NO…they are not losing money. There are over 8,000 Redboxes in the U.S. A couple weeks ago I received an email from Redbox thanking me for helping them set a new one day rental record of 1.1 million DVD’s. IN ONE DAY! Does that sound as if they are not making any money? The other thing I’d like to bring up is regarding Blockbuster. You mentioned a 5 day rental for $3.00? Closer to $4.00. But in any case by using Redbox over Blockbuster, you’ll be saving money. I don’t think there are many people that want to rent a movie for 5 days. I would rather rent it for 1 or 2 days with Redbox and save 2 or 3 dollars. Doesn’t that make sense? Another thing is that you said you have to wait to get a movie because there is only one Redbox on campus and you think this is a bad business decision. In fact, it is a good business decision. Redbox is testing the Campus and if all goes well, I can assure you there will be many more Redboxes installed within the next several months. Did you know that you can go online to Redbox.com and locate the nearest box to you and hold a movie in that box under your credit card? Did you also know that you can drop a movie to any Redbox. It doesn’t have to be the Redbox you rented from. You mentioned that you never see anyone renting movies from this McDonalds. I don’t think that is at all accurate, unless you work there. Unless you are there all day, I don’t see how you can make that statement. If you do work there, please forgive me because you would certainly know how many times during the day movies get rented. If you feel this Redbox is never used, why don’t you use it instead of complaining that it takes to long to rent a movie on Campus? As far as your statement… these are vending machines, and disks and disk boxes get dirty. When servicing the redboxes, they have to check to be sure everything is clean. *Very good! This is probably the only statement throughout your blog that made any real sense! Did you know that the people that put new movies in each week do clean parts of the box? The last thing, which I wanted to bring up first, is you remarks about movies-on demand. There are many people that aren’t able to order these type movies because many don’t have cable or satellite. For many reasons like the area doesn’t provide it yet, the cost is too high for many and a lot of old school out there that just like the old DVD player. Redbox doesn’t want to be a cable company. If they did, you wouldn’t have a great way to rent DVD’s at a GREAT price! So that’s it! I could go on but I don’t think you would really understand. I just hope you are not in business marketing but if you are on those lines, try thinking out-of-the-box, but not redbox!

  2. Visitor [Join Now]
    Adrian [visitor]

    I agree prohmimo. Redbox will be successful once they go “public.” They could take the majority of the market from B&M stores/Netflix and possibly VoD (until high-speed internet connections become ubiquitous).

    Redbox, however, needs to rethink the design of their kiosks. Being a Linux user I think they should port over to a fast, stable flavor of Linux. It would be much cheaper than buying MS licenses for each of their machines. I find the current interface is sluggish. Also, as you said, more kiosks in key locations would greatly increase their chance for success. Unfortunately, I don’t think they will be as liberal with their free promo codes as they become more popular though.

  3. Visitor [Join Now]
    Renter [visitor]

    I just have to disagree with appealing to higher ends of the market. Richer customers = higher profits? We’re talking about $1 movie rentals installed at locations like McDonalds.

    They are targeting people who frequent places like this, and they’re betting on people keeping movies for more than a day….forgetting to return the movie, losing it, etc. The whole way it is setup is similar to a credit card. Buy now, get your movie now….pay later, let us get a few extra dollars out of you before you return the movie. The richer customers are richer for a reason….they are the ones that will rent a movie with a promo code and return it the next day. They are not the target market.

    The higher end customers will be the ones to take advantage of movies on demand….but they wont ever be a big source of income for the redbox.

  4. Visitor [Join Now]
    bob chaisson [visitor]

    it is a good investment. should be able to open an account and put in 25.00 and be able to use it up with auto refill. better than putting thru 25 individual 1 dollar charges. yes i will purchase ipo

  5. Visitor [Join Now]
    Fred [visitor]

    Redbox, has been a good thing for me overall… but will agree with much of above…I also use the codes as often as possible.. why pay if you can get for free…? Also ually there will be better ways to get movies faster (cheaper?) without having to leave your home. The one thing that bothers me most about Redbox is the lack of selection. Yes, each week a few new movies come out, but I am sure I am not the only one who has noticed the plethora of “B” and “C” movies, and crummy TV shows.
    I would say that in the short run, Redbox may make some money, but I will not be investing in their IPO.

  6. Visitor [Join Now]
    Dan [visitor]

    It’s impossiable to tell if it’s a good investment or not, until after the details of the share offering is disclosed. If it’s priced right, and you agree with their marketing concept, it could very well be a good investment. Don’t be looking for a long term investment. This company will be bought out by a larger company within 24 months.

  7. Visitor [Join Now]
    mokkajavva [visitor]

    There are a few ways to predict a successful IPO. First, read the Prospectus to understand the leadership of the company, its general organization, and for what purposes the IPO proceeds will be used. Second, keep an eye on the big corporations purchasing the stock. These companies get detailed financial statements and perform their own valuation analysis. If a company like Goldman Sachs is purchasing the stocks, then that’s a good thing. Third, as more of an opinion, consider the market that RedBox targets…people who frequent wal-mart, bloom, macdonald’s, etc…these are the people who do not bookmark insideredbox.com to rent with only free codes. Also, RedBox is targeting this market (like college kids) because they are most likely NOT to have Video On Demand. I’m very intrigued and can’t wait to see the Prospectus, especially considering RedBox’s extremely fast rise. Either way, it’s going to be a really interesting IPO!

  8. Visitor [Join Now]
    jimbos [visitor]

    Dudes, this is from Idaho. There is a recession. Red box is a buck a night! Every weekend I see huge lines at red boxes at the local Albersons. I don’t go to McDonald’s so I wouldn’t know about their sales. Not to mention that Blue Ray is too expensive for the current middle income market to bare. There are other bennies to this model like always having the most current movie when the competition, (hollywood) is sold out and being able to return it to multiple locations. Depending on how much the IPO is, I will buy. There are many many people that rent a lot movies for just one night (connect the dots). I am speaking from an end user consumer standpoint not a market analysis. Although I don’t have much to spend on investing, I have never lost money using my consumer standpoint method.

  9. Visitor [Join Now]
    Ron B [visitor]

    As this is something I use, I can see its appeal. I have purchased other stock without really knowing what the primary business they are in. So yes, I would likely invest in an IPO.

    I liked some of the comments to improve the business model. I really liked the purchase of a credit of say $50 which would get “replenished at $25. Of course that would limit you to only one movie at a time. If you wanted to rent more, you would have to use a credit/debit card.

  10. Visitor [Join Now]
    jjb [visitor]

    I don’t know whether it is a good idea to invest in redbox, but let me tell you one thing: their service is phenomenal. For one dollar a night, I can just go over to my local Albertsons and rent dvds for barely anything, and if the thing is scratched, I can just call the company and tell them my situation and they’ll send me a new promo code (that works). Whether this is good business practice? Well, although it does seem to be loosing business by giving out free rentals quite easily, these DVDs don’t cost much for the company. They cost probably 20-25 cents a disc. Plus, each of these DVDs are being rented at a dollar a night by lots of customers. The people running the company seem to be normal people like us, that want to just watch a cheap movie for one day without any hassles with fees. I say it would be a great idea to invest in them-I see a lot of short-term growth for the next 2 years, and their friendly business practices will probably steal a lot of customers from Blockbuster and Netflix. I mean, try complaining about a broken DVD to blockbuster!

    I say buy.

  11. Visitor [Join Now]
    RC [visitor]

    I have been trying to find out when I could purchase stock into
    Red Box, because this is the current way to go it is cheaper and for some people who are like me and don’t want to take the longer drive to Blockbuster especially with these pathetic gas prices.

    Even if they increase to $2.00 they will still beat the competition because you still have to wait for the movie to arrive in the mail.

    And on the contrary High end customers like good deals too, how do you think they obtained that position, “seeing good investments from ground floor”.

    “When

  12. Visitor [Join Now]
    snafxobder [visitor]

    To prohmimo, college campuses will not be good locations because the school halts during summer and winter breaks.

    while groceries and convenient stores have people constantly coming in and out.

    i agree that redbox should create a brand name for itself nationwide first. the rollouts to walmart and walgreens (5000 + 2000??) will help their brand for sure. THEN they should go for something else.

    my 2 cents

  13. Visitor [Join Now]
    Aurelius [visitor]

    Great opportunity. I’ll buy. A buck a night in a recession with the bonus of codes to keep it interesting. Online reservations a big plus. Likelyhood of major retailers installing vending machines a real possibility. Only downside is waiting in line for new releases and weekend nights.

  14. Visitor [Join Now]
    Jeremy [visitor]

    Do you guys know how many people go to walmart and mcdonalds on any given day? What can you buy for a dollar at those places? A bun with a piece of meat so small you can not taste it? Not even a 20oz coke. The coke vending machine right beside the redbox is $1.25. The coke is more than the movie!!!!! Blockbuster next door is $4.50 for a movie. Everyone has a debit card these days???
    Everyone goes to walmart at least twice a week. And this provides these same people with CHEAP entertainment. There are a lot more middle class and lower class people now than the last 20 years simply because inflation. By the way have you seen WMT stock price? I would love to have my business inside their front door. People are watching their money close. The more things you can get at one stop the more people will spend to save gas money. Great idea!!!!! If it is priced right I WOULD LOVE to own part of the company with what I have seen thus far.

    • Visitor [Join Now]
      Cyndi [visitor]

      I so agree with you and I am now trying to find out where I can invest in Redbox stock. I would love to get in on the ground floor of this and if I could put in my own machines, with more choices and more locations, I would do it in a heartbeat as I believe that this is the best deal for the buck and just about anyone with a dvd player can come up with a few bucks each week to at least catch the big name movies out. Wal-Mart and McDonalds are the perfect locations to start a francise like this, I only wish I had had the money to do it first!!!!!

  15. Visitor [Join Now]
    Keithsaari [visitor]

    Are you kidding? In a heartbeat. I just want to know when so I can make sure I can get in on it. It’s a great idea and they have a great selection of movies. My only complaint is the line is too long because so many people are using it. But everyone I talk to absolutely loves it. And it is so easy to use. This might be the demise of Hollywood Video and Blockbuster who have been way overcharging us for years and even a better concept and pricing model then Netflix.

    • Member [Join Now]
      erickwookie

      Actually, Hollywood Video has the best deal around if you have one close enough to you. You can’t beat their basic MVP plan. Under 16 bucks a month, you can rent unlimited rentals 3 at a time. You have to wait a few weeks for the brand new releases to become part of the basic plan, that’s the only downfall – but you’re free to get anything else that’s been out more than a month. If you don’t mind the wait on new releases, then you got it made. I used to go there every day when I lived a couple blocks away. Rent 3, take em back, get 3 more. No money to hand over. If you don’t rent many movies than Redbox is the best – as long as they got what you want.

  16. Visitor [Join Now]
    Les Ismore [visitor]

    Redbox will be very successful launching its IPO. I see it going as big as Mcdonalds or Walmart’s stock. This is a company which in 2 years (since major take-off) has gone from 200 machines to 12,000 machines nationwide. There is only one place to go and thats up. Blockbuster & Hollywood Video will fall by 2009 unless they drop their prices to $1, which they can’t afford to do. You can’t compete against a Kiosk.

    • Visitor [Join Now]
      Max [visitor]

      anyone have any info on the ipo date and who the underwriters will be? i can’t find any information about it………

  17. Visitor [Join Now]
    NewInformation [visitor]

    Yes. RedBox is good for those times for Hollywood new releases. Other than that, they have no chance to compete with the variety of video stores. Besides apple and amazon.com will be taking over this world very shortly, so before you invest too much in RedBox, diversify and pay attention to TECHNOLOGY. It is the way of the future and in this case entertainment.

  18. Visitor [Join Now]
    Luke Marcus [visitor]

    Most definitely will become a major shareholder of this security. It’s the third quarter, when will this be available to the public

    • Visitor [Join Now]
      Tev [visitor]

      Redbox delayed their IPO because of the poor market. That sucks because Redbox is getting more popular by the day. Another six months of recognition will for sure get priced into the new IPO price. IMO.

  19. Visitor [Join Now]
    Cyndi [visitor]

    Please let me know where to but stock before it gets to pricey and this poor girl can’t afford it, I have been trying for the last year since I first saw a “Redbox” to find out about the stock. I have a gut feeling on this one and I believe it will be a good short term investment, providing one can get in on it soon, may be that it would be a good long term investment if they market better, more kiosks and more selections even in same locations, if not bigger boxes to hold more. I could suggest a few locations that I know would benefit the company, but then I’d be giving away valuable marketing info for free and they possibly know these suggestions anyway.

  20. Visitor [Join Now]
    john [visitor]

    Every single Walmart nationwide is getting a redbox.

  21. Visitor [Join Now]
    Grant [visitor]

    Anyone heard the latest on the IPO? Anyone speculate what the price will be?