The “shot heard ’round the internet” continues to reverberate. With the furor still growing over Netflix’s price increase for customers who want streaming and DVD service, several analysts believe that Redbox is in a great position to absorb defecting Netflix customers.
John Kraft and Douglas Greiner, analysts with D.A. Davidson & Co., believe that Netflix customers who don’t want to subscribe to its DVD offering in order to obtain newer releases could become Redbox customers. Said the analysts:
“With most new releases not available for streaming, Netflix subscribers choosing the streaming-only option will have to turn to other sources for these newer releases . . . In our opinion, this will create incremental demand for alternative low-cost DVD rental services such as Redbox.”
Merriman Curhan analyst Eric Wold agrees:
“While it’s a known fact that consumers are more likely to comment negatively than positively, we believe this level of complaints is worth noting . . . Netflix defection would benefit Redbox traffic. For those Netflix subscribers who still utilize DVDs, we would expect this price increase to force them to re-evaluate their subscriptions — with a potentially meaningful percentage of them canceling their subscriptions altogether.”
Is Netflix going to regret its decision? Is Redbox going to celebrate it? Hit the comments and let us know what you think, Insiders.
(via Home Media Magazine)
While Redbox can be very convenient (because they’ve saturated many locations with kiosks) & they’re cheap, selection is pretty limited at a typical machine. This is particularly true since they’ve added Blu-Ray titles and games. I sometimes take a look at the two Redbook machines at the nearby grocery store where I shop, and it is really hard to find a title I’d really want. I know Redbox serves the needs of a lot of people, but the choices on Netflix make it a different product.
Agreed!
That’s why you do it online! If you expect every title available at every kiosk, you are not living in the real world. You can even use your cell phone to access the website to search as you do your shopping!
That is how I normally go, I make sure its available online first and then rent it that way. I think if this pushes more Netflix over to RedBox, then perhaps it may force RedBox to provide more DVD’s b.c of the demand of it. Not sure.
The price increase for us will force us to either just go RedBox since they are all over the place. Or just demote down to Streaming Only… unsure yet… I have a month to decide…
There are around 12 Redboxes in a 5 mile radius from my home. 6 of them within 2 miles. I never worry about getting the newest movie because like you say above I reserve them online and just go to the box that has my movie available. I do this once a week, and one week of the month the rental is free. So I stream from Netflix for 8 bucks and spend another 4 for 4 movies a month from Redbox. Not a huge savings but no waiting for the disc to come in the mail, no never ending Q that never sends me the newest movies until they are no longer new to Netflix.
Using neighborhood Family Movie because I’d rather browse their store for newest releases than any of the local Redbox kiosks limited supply. Two days ago, checked with a Wal-Mart Redbox and I along with three other potential consumers walked away sorely disappointed with the selection!
Seldom have I not been able to find a title I’ve been looking for. I simply go online, find the movie, then click to find the nearest Redbox. I have five within 2 miles of me, with three right next to each other. Go online, you won’t be surprised.
I agree put the games in a different box.
I have netflix and I’m not happy with the price increase. I will just go to streaming and use the red and blue boxes to get my new releases for 1.00
Redbox will benefit quite a bit from this in the long run. The way I see it is like this: Its going to cost an extra $8 per month to have DVDs with Netflix, that means I have to watch 8 movies or more per month in order to make it a better deal than Redbox. However, this plan only allows 1 dvd out at a time. I request a dvd from Netflix, it takes a day to ship, a day to arrive, I may watch it that same day if I can or perhaps the next, then I send it back and it takes another day to get there. Sometimes it takes another extra day for them to ship out. So it can be a 3-5 day venture to watch a dvd from Netflix. So now if I rent 8 dvds to make up the cost difference, we are talking 24-40 days total time involved. I honestly don’t think the $8 is going to justify staying a member of Netflix. With Redbox, if I decide I want a movie, I can reserve it online and go pick it up at my convenience and I have my movie the same day I pick it. And if I decide I want an older title, there are still some video stores around which rent 99 cent movies. Netflix isn’t going to get a dime from me for DVD rentals any longer.
I just don’t get it with the price I mean the online section isn’t that great to start but it supplemented with the DVD which has a huge section now you separate them and the service isn’t worth it, it takes 2 days to get the movie 1 day or more to watch it and another day too get back to them we only got maybe 5 DVDs out of a month, and in-between we watched old crappy movies or outdated tv shows to make up for it
We already cancelled and took p blockbuster on there offer for x Netflix customers 9.99 a month and we get blu ray DVD of video games and we don’t have to wait 28 days for new releases
This isn’t about the money for most people it’s about netflixs attitude in public comments about it’s customers ” we know we will loose customers we don’t care it’s the cost of a couple lattes for most people” that right there is what is wrong with corporate companies and I’m sick of it so I won’t support them no matter what we havenother options
Now if red box had a streaming service I would be on board with them I’ve always like that company but for now blockbuster mail service isn’t bad
Well said. I am trying Block Buster also. Two out at a time. And then I can take them to the store here in town. Get two more for free.
$15.00 a month. Now if I can get two in the mail every week, watch one, take it back to the store. Get on for free. Watch the other one that I got in the mail. Take it back the next day. And so on. I should get about 12-14 movies a month. $15.00 + tax. I will give them a month. It is a free month.
I will see how it goes. I have NetFlix On hold for 60 days. I will see what BlockBuster does here!
I would say Redbox doesn’t have any selection to be able to take advantage of Netflix customers. I have a locally owned Kiosk in my town that has new releases and you will see lines there but I have yet to go by the Redbox and see anyone there.
You really think your local kiosk is superior to redbox? Really?
Not overall. But it is very possible in a local market.
For those people that want new releases and normally pay “full rental” prices, after 2 trips to RB with no movies available the local kiosk would be the first place they go.
I still like redbox’s dvd rentals, but bluray and games can really add-up after a lot of rentals. I’ve had Blockbuster and I’ve enjoyed every minute. Games and movies (even bluray); they even have free membership deals for ppl dropping Netflix and adding Blockbuster.
This would be great if there werent only 1 bluebox in this state (or large area), and only 1 Blockbuster within 20 miles and I live in the city!!! … Blockbuster went on a closing spree here a cpl years ago.
Yeah you need a GPS to find a Blockbuster kiosk.
I maybe rent 2 blu-rays ever other week out of Redbox and alot of time I have codes and such but even w/o it’s cheaper than getting a Netflix 1 out plan for $7.99. I also have the $7.99 streaming to watch old shows and various movies. If the premium movie channels didn’t have tv shows I like to see I wouldn’t even want to have them anymore. I think this is the beginning of rising prices again. It won’t be too long til Redbox goes up unfortunately but for now they are still by far the cheapest and most convenient way to see new release Blu-rays and I am still thankful for that.
The increase discriminates against those of us who are hard of hearing or deaf too. I have yet to find a non-foreign streaming Netflix movie that is closed-captioned or sub-titled. I watch only foreign streaming movies, since nearly all of them are subtitled.
They just lost me as a customer–at least until they start adding writing to most or all streaming movies.
Hi,
I have found all kinds of them on NetFlix About 50 pages worth. And More on the way. I also need CC are SDH. NetFlix is doing better. But has a ways to go. But they have about 150 US movies that have CC are SDH on the streaming…
I am a recent viewer of the Netflix streaming service and a long time Redbox user. I am not highly impressed by the titles offered via Netflix’s streaming option. Most of the stuff that’s worth watching has already showed up at Redbox first. I enjoy the immediate gratification of Netflix, but finding something I actually want to watch is the problem. They really need to concentrate on adding current titles before jumping prices. I really don’t know if I will stay a member of Netflix very long in it’s current form.
My wife and I canceled our Netflix as soon as we saw the price increase. RedBox will have all of our business because of it’s convenience and price.
The ones who are hurt are those of us out in the boonies! My closest Redbox or Video store is 20 miles away. I use Redbox a lot on vacation, but for day to day we are pretty restricted to mail order option. I’m not sure what we are doing yet about Netflix. :(
That’s a dis-advantage to people who live further out, maybe they need a bigger machine to ensure you get a good selection. I live in a large suburb, and I can count a dozen machines only a mile away.
Totally agree or add more boxes. I have started to see an increase of multiple RedBoxes per location around here…
I simply don’t get corporate America. Why would you POSSIBLY want to alienate customers by increasing the cost of their service by 400%..!!! It’s LUDICROUS. Have they FORGOTTEN that they got start as a DVD by mail company…? And now, they simply want to abandon all those customers that brought them to the video streaming business. SHAMEFUL..!!!
I am also disappointed about the increase. The titles available for sreaming leave a lot to be desired. I am going to cancel one or the other, not sure which one yet. I like streaming when we need something fast, but also, Netflix has some great documentaries available by mail. I’m just not going to pay $16 a month for both, no way! I have also tried Blockbuster by mail, and I had a problem with a lot of my selections being on a long waitlist. I think that Netflix is being greedy and I hope everyone stands up to them by dropping at least one side of the service.
I for one benefit from the new price plans. I live in the boonies and my bandwidth is capped so I will never be able to utilize Netflix streaming. Why should I have to pay for something that I will never use. My monthly fee dropped $4, which I can now use to rent more new release movies from Redbox.
I got into Netflix when it was $8.99 for streaming and 1 DVD out. I was a little disappointed when the price went up without any change in service to $9.99. Now with the over-the-top price increase it is good-bye Netflix.
I sincerely hope that both Redbox & Blockbuster Express see significant benefits from the terrible move made by Netflix. I have been a streaming & DVD customer since the beginning, but won’t be anymore. I already use Redbox for current movies and I’ll be getting my TV & older movies from my local library system. I haven’t decided about streaming yet, but I may move to Amazon. Even if it costs me a little more, I want to make Netflix aware of my dissatisfaction with both the amount of the price increase and their “thumb their nose” attitude toward their customers. Makes me sorry that I’ve recommended their services to so many friends. I’ll be recommending that they drop their memberships as well! Shame on Netflix. I’d love to see them go under for treating their customers so badly.
I seriously doubt RedBox will see much of an uptick in business due to Netflix’s price hike. Lets face it, outside of the 2-3 BIG titles RB has every week the rest of their selection is utter garbage. If you really like movies then Netflix is the only choice. I might stream a movie once or twice a month but my alliegience lies with mailed dvd’s. I’m on the 3 at a time plan and can generally get 5 titles per week thru Netflix. Figuring out how to use their system really helps. I like all kinds of movies and Netflix is the only game in town for that. I no longer have any brick and mortar rental stores within 100 miles of me so ‘by mail’ is the only alternative. For those who don’t care about the movies they watch then Rebdox is an O.K. alternative. I wouldn’t do business with Blockbuster for any reason. They have a limited selection and shipping can take 3-4 days. With Netflix I have NEVER had a problem getting the movie the next day and returning it just as quickly. My new rate for unlimited streaming and 3-at-a-time only went up $4.
That’s hardly near the 60% price hike that the media has reported.
Netflix is still the best bargain on the planet.
The 60% rate hike reported is for those of us that were on the one-out plus streaming plan. We were paying 9.99. With the reorganization, we would now be paying 7.99 for streaming plus 7.99 for one disc at a time. 15.98 total. That’s a 5.99 increase per month, or 60%.
I’ve already dropped the disc portion of my account. I’m keeping the stream for now because my teenaged daughter is blitzing through Star Trek before she leaves for college in September. Once she’s gone, I will probably leave entirely and go to Redbox for newer releases and my local mom-n-pop physical store for older stuff. It’s a little sad because I’d been a Netflix subscriber for just under a decade.
I too, will be dropping the DVD service from Netflix. I will keep the streaming as it is easy, fast and you can watch unlimited. I will definitely miss the DVDs as that was the only way to watch shows like Dexter, Deadwood and Tudors. The price increase is ridiculous. It’s one thing for a small increase but with the economy the way it is they will loose customers for sure. We occasionally use Redbox for those more current movies and will use that service more now. Netflix has pushed customers away.
I think this post is right on. Everyone I have spoken to with a Netflix account (including myself) is planning to defect. I only get 4-5 DVDs per month as it is. Why would I pay $8 a month when I can go online and find most of what I want at one of the bajillion Redboxes near me and not have to wait for it. I think Netflix is gonna feel it.
me and my family have a netflix account and find it ridiculous that they would expect their customers to pay a five dollar increase. So in September when they go up were canceling our account. I don’t think its very smart on their part because I feel like they’re going to lose a lot of customers. I realize that redbox doesn’t have every single movie but I still get movies quite frequently from them.
I don’t understand all the outrage. Personally I’ve always thought that for what Netflix offer that the prices were always too good to last. $8.99 was a steal to me. The new prices are what I think they should have been in the first place. They couldn’t get away with those prices forever.
I will be droppIng the DVD service because I’ve started to use streaming more and I was only watching by-mail movies twice a month. I will go to redbox for new releases for those twice a month urges to see new movies.
I’ll agree that Netflix’ prices were great. But so many of us are still reeling financially after the last few years of not-a-depression. My entire entertainment budget is $15 – $10 to Netflix for the one-out plus streaming and $5 for Redbox. Now that the one-out plan is moving up to $16, Netflix alone exceeds my budget. And yes, I am seriously that tightly budgeted and that badly in debt from 2 years of unemployment that ONE dollar is more than I can accommodate.
The shipping time for me was 3-4 day to receive a DVD after it was shipped and another 3-4 days to be logged in as returned before another DVD could be shipped. The only benefit was when I watched TV series when one DVD had around 3 hrs of view time, other than that, a regular movie was a total waste of time. The streaming service is okay but, the movies are mostly B-rated or old movies. The 60% increase in price is probably due to the fact that they were pricing service to low in the beginning. But, it is what we as consumers have grown to expect. I have cancelled mainly because it just isn’t cost effective if you compare it to Redbox.
I will be dropping netflix completely once my month is paid, I think it’s shameful of them to not issue a refund of unused time. Who on earth is running that show? They’re idiots. As soon as I heard about their change I decided to cancel and just use redbox. You just have to do your research, I got BURNED renting some stupid movie billed as a romantic comedy with Bradley Cooper. It was old and horrible.
Yes, Redbox will probably see a bit of an increase. As far as Neflix, this is obvious, but I haven’t seen anybody mention it: Netflix declared themselves as a streaming company awhile back. The fact that they may lose some DVD customers is WHAT THEY WANT at this point. That aligns with their mission statement. That’s why when you call kicking and screaming, they listen but don’t really do anything. What is happening is exactly what they knew would happen.
As a consumer, I hate to see my bill go up to $17.98 (I get Blu-Rays) when the same thing was $8.99 (I think) a couple years ago. But I knew this was coming all along. They can’t just continue to GIVE streaming away, which is basically what they were doing. They are wording it to sound like they are giving DVDs away, but that’s because of their change in mission. Whatever the case, they are running two services now and they can’t just give one of them away.
All I can say is this is a really dumb move on Netflix part and I sure hope customers vote with their wallets and send a message to the big brass and cancel all services for a couple months just to see a big impact on their churn and ARPU. I hope it also dings their precious stock price real good also. They need to see what a bonhead move it was to hike it up 60% instead of small increments over a longer period. They already have devoted customers now they are tunrning them away? Their problem is they are overly arrogant and stubborn thinking they are the only show on earth! I will downgrade to the streaming plan but like Chad is saying that is exactly their plan. They are spending more on the shipping charges to justify the 2.00 that is the current spread between the streming only plan and one out plan.
A shame as I would like to see more cancel overall just to really surprise them.
I will come back to a streaming only plan in a few months and use Redbox regularly for my DVD’s. I will say if GOOG get’s HULU then the writing could be on the wall for Netflix as Google TV will probably prevail like everyhting else they have done.
I use RB, BBX and Netflix.
If the companies that have direct access to my television through on demand (uverse, fios, Dish, Direct TV, Charter, TWC) would rent movies for $2, redbox would be out of business w/in two years. Just like Redbox went for the jugular and took down BB, I would be willing to pay $2 and stay home rather that drive to/from RB for $1. But if it costs me 5, 6, 7+ bucks to watch a movie on demand, I wlll be inconvenienced and drive to RB or BBX.
I will be dropping the DVD service from Netflix and my monthly bill will be going down 20 percent.
If i drove by a redbox everyday like many people, I would be more inclined to use them more often. As it is, I prefer the “to my mailbox” convienence of netflix.
I do wish they would have handled this increase better. or slower or something but the bottom line is, for me, netflix is still a better value.
But, only because I work from home and dont drive by a redbox everyday.
Another negative for the redboxs is the 5+ minute waits just to return a disc. I hate waiting. The machine needs a “quick return” slot on the side or something.
I am probably going to downgrade from 3 at a time & streaming to 2 at a time plus streaming and then every other month turn off streaming and increase it to 4 discs per month.
That would keep my yearly cost inline with what I paid before the increase.
The bottom line for me is the nearest redbox is 2 miles away and If I end up making a special trip to pick up or return a disc, that alone just killed the value of a $1 rental.
Even though it will seem that alot of subscribers to Netflix will close their accounts I dont believe that enough will to make a huge difference.