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?
prohmimo said
May 3 2008 @ 12:14 pm
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.
Adrian said
May 5 2008 @ 2:43 pm
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.
Renter said
May 5 2008 @ 2:44 pm
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.
bob chaisson said
May 5 2008 @ 3:08 pm
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
Fred said
May 5 2008 @ 3:35 pm
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.
Dan said
May 5 2008 @ 3:52 pm
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.
mokkajavva said
May 6 2008 @ 9:35 pm
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!
jimbos said
May 7 2008 @ 8:18 pm
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.
Ron B said
May 8 2008 @ 12:02 am
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.