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slc-airport-pictureRedbox, which added 2,700 kiosks to its network this past quarter, has not included its airport channel in this rapid expansion. According to Video Business, Redbox has only installed five kiosks at U.S. airports since September of this year. The company had previously installed two kiosks at Nashville International Airport  in 2008.

Redbox hasn’t revealed its future plans for airport development, nor will it discuss its reasoning for its slow airport expansion, which contrasts greatly with the company’s aggressive expansion in other channels.

Redbox obviously has their reasons for taking things slow, but at first glance this airport reticence might seem like a missed opportunity. A large installed base of kiosks at airports around the country could provide a healthy revenue stream of impulse rentals from travelers seeking in-flight entertainment who would then return the discs at their destination airport. Perhaps restrictions have been placed on Redbox by airlines/airports that don’t want the rented discs cannibalizing sales/rentals of other in-flight entertainment options. With cross-country flights only taking a few hours, it’s also possible that Redbox foresees few customers keeping discs for the two rental periods the company is accustomed to.

Over to you, Insiders. Why do you think that Redbox is slowly taxiing down the runway when it comes to increasing its airport kiosk network?

[via Video Business]

11 Responses to “Redbox Slow to Expand Airport Kiosk Network”

  1. Visitor [Join Now]
    rb [visitor]

    I forsee a headache for the airlines and Redbox if this takes off–so to speak. What if an adult–who might be sitting next to a child & family on the plane– rents a raunchy r-rated movie to watch. Because of the closeness of confined passengers on a plane, I don’t see how a person could keep the movie they are watching completely private. THEN, would the family of the child subjected to the raunchy r-rated movie sue the airline service for allowing such material on the plane; sue Redbox for putting kiosks with r-rated movies in the airport; or sue the adult watching the r-rated movie while knowing a child is sitting right next to them??? Also, what if a person rents at 11:30pm in one airport time zone but returns when they arrive in another airport time zone the next day at 9:15pm that arrival place’s time zone. If they get charged for another rental day because it’s now 9:15pm, they could always argue that it’s say still only 7:15pm in the time zone they rented it from. I think Redbox should really think this through before going all out and putting kiosks in airports. Lawsuits, lawsuits, lawsuits just waiting to happen!

  2. Visitor [Join Now]
    Wesley [visitor]

    There are already services that rent not just DVDs, but DVD players. And you can rent any new (and a lot of older) movies from them, including R-rated titles so I don’t think there’s a problem with liability. Plus, whenever I fly I watch a movie on my laptop and if I want to watch something with some violence or skin in it, I do.

    I think there are two main problems here, and both of them involve money. First, unless the person forgets, they’re going to drop that movie off 3 hours after they rent it. Now, this could mean that each movie gets rented more times than your average Redbox movie but more likely it’ll end up getting scratched up quicker.

    Second, it costs money to rent space in an airport. Far more than outside a Wal Mart. There’s a reason you pay $8 for a beer in most Airport bars. I don’t know the cost to run a kiosk but I know from experience that it’s expensive to run a shop.

    I don’t know if the added expense of parking and the added hassle of accessing the kiosk would make this appreciably worse, but it could. If the kiosks ARE more used they may require more visits to replenish, restock, and rebalance the selections. But really, I think the first two issues are the big ones.

    Redbox has a very tight profit margin, no? Anything that upsets that margin needs to be tested rigorously.

    • Visitor [Join Now]
      rb [visitor]

      I don’t know…Didn’t last year an airline force a young attractive lady off the plane because they felt her skirt was too short/sexy/suggestive to wear on their family-occupied plane? I’m just thinking that IF anyone ever brought suit against Redbox for providing r-rated movies in family-occupied airports, the person could also sue the airport as partners in the ‘crime’ saying that the airport condoned the r-rated raunchy movies due to the fact they knowingly allowed Redbox to rent airport space with their r-rated dvd filled kiosks…

  3. Visitor [Join Now]
    Ryan McLean [visitor]

    Also, while the RedBox model of “Rent anywhere, return anywhere” is a great one…think about it. You might rent on one side of town, and return to the other side of town, but it’s rare (Besides family road trips and the like, of course) that you return a DVD to a RedBox in a “district” or “region” different than the one you originally rented at.

    This naturally keeps the selections balanced at all the kiosks in an area.

    With airports it’s a whole different ballgame. People flying JFK to SFO might like movie “A” and people flying SFO to JFK might like movie “B” — so eventually your east coast and west coast kiosks fill up with movies that are less popular in that region. You might laugh at that, but ask a flight attendant — certain routes have distinct and unique personalities.

  4. Visitor [Join Now]
    John Small [visitor]

    Logistical nightmare is an understatement.

  5. Visitor [Join Now]
    The Hoff [visitor]

    A couple of insights: Redbox has one dedicated Sales Rep focusing soley on the airport channel. He has extensive experience and is an airline industry veteran.

    With that, there are several reasons for the slow airport expansion. the first is that airports, as a market, are extremely fragmented and the only similarity in each of them is that they are different. For example, depending on the city, redbox has to deal with any one or more of the following:the airport authority, the county government, the city government, a concession management company, a sub-concessionaire, airlines themselves, and more.

    Another example–just to test a kiosk–a 6-month test at the Denver airport, the test needed to be put out to bid and eventually signed off by the City of Denver City Council, eventually being signed off by the Mayor. The Mayor! Other locations simply need a letter of approval from the airline who might control the actual physical space in which the redbox would be located. e.g. American Airlines in the St. Louis airport.

    So it’s not just that there’s no urgency, it’s more that it’s a very difficult market to penetrate. The arrangements are the same as any other location in that redbox doesn’t’ pay rent–it’s simply a rev. share agreement. Granted, this is contrary to the lucrative contracts that most airport authorities are used to receiving; perhaps this is a reason for the slow expansion as well.

    The kiosks in airports do well in terms of revenue, although they do require replenishing/thinning more frequently. Of the dvd’s rented at specific airport location, each was returned at an average of 45 unique retail partners of redbox. i.e. the customer who rents at redbox is used to returning elsewhere and is comfortable with the process. Is that kiosk attracting new customers who have never rented? Good question.

    As far as redbox being sued because someone’s watching an R-rated movie–that’s ludicrous. Does 7-11 get sued because someone bought a Playboy magazine there and views it on the plane?

    • Visitor [Join Now]
      rb [visitor]

      7-11 sells sealed Playboys with the assumption that the buyer takes it home to read in private. The airport that allows Redbox to have a kiosks in their airport does so WITH THE SOLE PURPOSE that their passengers will rent/watch the Redbox movies on their air flights. Therefore, the airport that knowingly allows r-rated kiosks in their family-oriented airports has to assume responsibility for any lawsuit that might occur because of a r-rated rented movie being watched on one of their air flights. Same as how a bar/bartender can be held part responsible for a drunk-driving accident by one of their patrons who was allowed to drink in excess at their bar and then allowed to drive drunk. If that same person had bought a case of beer at a brewery , drank the whole thing at home, and then drove drunk and get in a car accident–the brewery would have no responsibility because they didn’t sell the case of beer with the purpose of allowing the person to drink until drunk the whole case there at the brewery.

  6. Visitor [Join Now]
    The Hoff [visitor]

    So it’s against the law to watch R-Rated movies on airplanes? When did they pass that legislation? I missed it. It might violate basic tenets of good taste and decorum, but it’s not against the law. The airline has every right to maintain the atmosphere on the flight and if someone’s watching a movie with extensive objectionable content I’m guessing they can insist he or she turn it off. But a lawsuit? Geez. Who else could we sue while we’re at it? The dvd player manufacturer? Duracell for powering the player? Boeing or Airbus? The ground crew?

    To suggest redbox has responsibility shows a complete ignorance of the law.

    • Visitor [Join Now]
      rb [visitor]

      Not saying it’s against the law BUT am saying it’s easy to foresee potential lawsuits for both the airport and Redbox if the airport agrees r-rated movie kiosks be in their airports with the sole purpose of watching the rented movies on their air flights… Nowadays people want to sue, sue, sue for any reason–think Laurie P. and her pending Redbox lawsuit regarding rental vs late fees! The only way I can think of to prevent potential lawsuits is for the airports to agree Redbox can put its kiosks in the airport BUT only carry movies with g, pg, or pg13 movies. I say pg13 movies included because I think airlines have an agreement that unsupervised minors can fly on their flight but only with written consent by the parent or guardian.

      • Member [Join Now]
        Mark [rb123456789]

        You are portraying a minor issue as much bigger than it is, I think.

        First of all, movies on planes are only watched using headphones. So the sound is inaudible or just barely audible to nearby passengers. The inability to hear a movie’s objectionable material avoids problems in most cases.

        In other cases, a reasonable passenger (or even an unreasonable one, if a passenger or a flight attendant makes a request) will take action to avoid exposing those around them to objectionable material. This could involve shutting the movie off temporarily, moving the screen onto your lap/chest so it’s not visible to others, putting up a barrier (a book, for example) next to the screen, switching seats, etc.

        And in most cases it’s not even an issue, there is no child or someone who would be offended within viewing range. Believe it or not, people DO sometimes read their Playboys on planes.

        Anyone can sue, true, but I see no reasonable basis that a suit would get very far. The pending late fees lawsuit is different: because it hinges on the interpretation of specific claims Redbox has made, and compliance with a specific Illiniois law, it could go either way. I believe the late fees lawsuit is nothing more than a money grab by greedy lawyers who saw an opportunity based on previous cases with other rental companies and used Laurie P as a proxy. There is no similar precedent here that I know of.