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Redbox Under Fire: VBG Strikes Back (Again)

Redbox is really getting hit from all sides lately. It is the “hit them while their down” strategy. Will it work?

This time the attacker is the Video Buyer’s Group (VBG), a group of independent rental retailers across the midwest. We have heard from these guys before, back in Mach 2008, when they tried to get R-rated movies pulled from Redbox kiosks at McDonald’s locations.

Their current argument mirrors that of the studios, that Redbox $1 per night pricing is causing the poor movie studios to get less revenue, thus making it more difficult for them to make more films in the future, causing many children everywhere to cry, culminating with the earth spinning off its axis and ending civilization as we know it!

Here is my favorite quote, from our good friend Ted Engen, president of the VBG:

“Dollar rental kiosks are to the film industry as the Internet was to the music industry,” VBG president Ted Engen said. “That’s how bad this thing can get.”

I agree with Ted 100% – at least on his first sentence. It is true that rental kiosks like Redbox are changing the film industry much like the music industry changed due to the likes of Napster and iTunes. The difference is, I see it as a good thing.

So, bring on the “bad”, Ted, while consumers everywhere cheer at their now more affordable entertainment options. A sad story, I know.

Oh, and last I checked, the music industry is doing just fine, now that they have adapted to their new environment. Why would the film industry be any different?

[via videobusiness]

134 Responses to “Redbox Under Fire: VBG Strikes Back (Again)”

  1. Visitor [Join Now]
    Linda Welch [visitor]

    I think that Redbox is the best thing that ever happened! We caught up with so many movies this summer that we would have NEVER rented anywhere else. At $1 per movie, we often rented 3-4 movies per week.

    Everyone needs to adjust to the changing market – this is good for the consumer!

    And, by the way, we went to MORE movies in the theaters than usual since we were in movie watching mode. So really, in our case, the movie industry should THANK Redbox.

    • Visitor [Join Now]
      Sony? [visitor]
      I work with VBG. To find out why this is important, click here.

      Michael, you are quoted, “Oh, and last I checked, the music industry is doing just fine, now that they have adapted to their new environment. Why would the film industry be any different?”

      The music industry is just “Fine”? You call piracy out pacing sales by over 100 to 1, “FINE”?

      Is this innovation? Redbox is preventing Digital Innovation from taking a strong hold.

      • Visitor [Join Now]
        Carson [visitor]

        People will still pay to go watch movies in the theater, isn’t that where the studios make all of their money??
        Musicians can still make money putting on concerts as well. I think the majority of their income comes from sales though, but so what if Lady Gaga has to put on a concert to make her money, they are doing what they love to do and getting paid for it….wah!! And everyone else in the music industry gets a piece.

        • Visitor [Join Now]
          Sony? [visitor]
          I work with VBG. To find out why this is important, click here.

          The studios make more in DVD sales on almost every title and not all movies go to the theaters. Half the money goes to the theater, half goes to the studios. A lot of movies do not make back their millions of dollars they spend to produce it.

          Musicians do not make that much from physical sales, they are forced into going on tour where tickets are $50 to $200. I believe that concerts were half that not too long ago, then again, I’m not that big of a music fan. I don’t think we’ll see actors go on tour, that would be ridiculous.

          There are far fewer moving parts in the music industry and far fewer dollars.

          “And everyone else in the music industry gets a piece.”, what does this even mean?

          • Visitor [Join Now]
            Carson [visitor]

            Sony-
            I just mean when Lady Gaga has a concert, she has royalties that go to that Sony catalog that Michael Jackson co-owned. Or she has to pay employees (stagehands, engineers, lighteing, A/V) to put on a show, stuff like that.

      • Visitor [Join Now]
        bob [visitor]

        You make it sound like RB is stealing all the movies they rent. You know they have to buy them from the studios. And as a former video store owner I can tell you they don’t give them away.

      • Visitor [Join Now]
        Da76 [visitor]

        Sony, r u a plant? Sure are sounding like a corp rep.

    • Visitor [Join Now]
      bikergram45 [visitor]

      I totally agree with Linda, I love redox.We have not rented this many movies a week in years. Best thing that happened to this industry,to be able to afford movies for the whole family,especially with the economy now.

      Thanks redbox keep up the good work

  2. Visitor [Join Now]
    Skyler Collins [visitor]

    I’m not sure why VBG’s anger is directed at Redbox. They didn’t rent millions of DVDs from themselves. Consumers chose to rent from Redbox rather than all the other available alternatives. Innovation like this is what Austrian School economist Joseph Schumpeter termed “creative destruction”. Cheers to Redbox!

  3. Visitor [Join Now]
    Tim [visitor]

    Well, the music industry isn’t doing that great, but that’s another story. But to try to stifle Redbox’s ingenuity is just… un-American. It’s a brilliant idea. It’s not “killing” other ways of watching material. Redbox is just one innovation in a sea of changing the way that we access movies. Streaming movies and TV shows are much more of a “threat” than Redbox. They’ll just have to ride out the storm.

    The only thing I wish Redbox could fix is the lines and people who are not adept with their index finger or making quick decisions. Sad to say, but Redbox also makes people park their cars stupid outside of McD’s — thinking they can get in and out quick. So if I see a bunch of sloppy parking outside a McD’s I know the line is long….. ;-)

    • Visitor [Join Now]
      Sony? [visitor]
      I work with VBG. To find out why this is important, click here.

      Another quote, “Why would the film industry be any different?”

      The answer to this is simple. It is far more expensive to make a movie than it is to make music. If piracy takes a hold 100 to 1 in the movie industry, it’s Game Over!!! The trickle down effect would cause a shut down in movies.

      • Visitor [Join Now]
        Rick [visitor]

        Why is piracy any more of a concern with Redbox than it is with Blockbuster or Netflix? The piracy topic is a moot point with regard to Redbox. It was only raised to scare people away from Redbox.

        • Visitor [Join Now]
          Sony? [visitor]
          I work with VBG. To find out why this is important, click here.

          Michael is stating that the Music Industry is “Just Fine”.

          I’m stating that he is Dead Wrong!!!

          Redbox has Frenzied the customer into believing that $1 is a fair price. The $1 price point would have been just fine if it were not backed up with the fact that RB has given away millions of free rentals every week to drive up it’s (Frenzy) market share. This Frenzy has created a mindset that it is either $1 for physical or digital or I’m going to steal it.

          The $1/night would not be an issue at this point if it weren’t for the fact that Redbox’s tactic of driving up it’s market share with all the Freebies.

          I’m ok with freebies, but let’s be honest here, Redbox’s intentions were to destroy it’s competition in order to make a few hundred dollars per month per machine. We all know that a high percentage of Redbox customers abuse the freebies and Redbox has done NOTHING stop it. Why; because they want to deep driving up the Frenzy!

          • Visitor [Join Now]
            Rick [visitor]

            Using your logic, we should investigate McDonalds then. They offer breakfast sandwiches for $1.00 each. None of their competitors can compete with that. They just do that to work up a frenzy among people who are hungry on their way to work. We all know they can’t really make a profit on their $1.00 sandwiches, otherwise all of their competitors would do it. Isn’t their intention to destroy their competition? We all know people who only go to McD’s for the “cheapies”. They even have the gaul to sell large Coke’s for $1.00 when the Medium is $1.29. Look at all that Coke they’re just giving away. Somebody should stop them. That’s not fair to their competitors.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            Rick,

            Does McDs give away their food product the same way that RB gives out Movies?

            I’m sure Free will drive up the frenzy more.

            Soda is Far cheaper than a movie, why not give that away?

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            McD, Wendys & BK all have $1 menus, but they do not give away free $1 items with a code every Monday!!! In addition to all the other every day codes.

          • Member [Join Now]
            moviecrazy

            What do you think Walmart has been doing for years? They have been trying to destroy (and succeeding in a lot of cases) other competitors for years but you don’t see anyone trying to shut them down do you?

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            Do they give away food items multiple times a week, every week, for multiple years? Do you have to buy anything to get these freebies like you do with Monopoly? Monopoly is not Free, you have to pay to play.

            This is the frenzy I’m talking about. I’m not against freebies, and yearly promos, I’m against the tactic that they are using to drive up market share and in the process devaluing the experience of watching a movie. You cannot compete with the blindness these freebies are obviously having.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            Walmart is too diversified for anyone to shut them down.

            However, there are plenty of vendors that refuse to allow Walmart to sell their goods. Plenty of vendors have also quit Walmart after having a decent relationship with them. Most of these situations you do not see either of the 2 parties suing each other.

            When did Walmart become the Good Guy? I thought they had the same, “I hate their Corporate Greed” perception as the Studios.

          • Visitor [Join Now]
            Tim [visitor]
            I work for VBG. To find out why this is important, click here.

            Whoever said they hope Blockbuster closes all it’s stores is clueless to the entertainment business. Even though they are stiff compitition losing the biggest Brick and Morter brand will hurt the entertainment industry. And everyone here knows that the kiosk are the bigest reason these locations are closing (along with netflix) but I don’t feel as much so . Now instead of selection in these communities people will be left with $1 kiosk that offer about 70 titles to choose from when they are available. Which we know with the studios pressure each kiosk will only be able to afford about 8 copies of the big releases because they have to be bought at retail plus they will not be there on the days of release.

          • Visitor [Join Now]
            Rick [visitor]

            Sony?,

            Now it appears that your problem with Redbox isn’t so much that they rent videos for $1/night as much as it is that they have the freebies once a month. Make up your mind. Redbox used to do the freebies weekly. Now they’re monthly. Over time, I’ll expect them to stop giving freebies on any kind of a regular basis. They aren’t doing the monthly freebies to drive their competitors out. They’re doing the freebies to increase their customer base. Once we’re all used to renting for $1/night, even without the freebies, we’ll be inclined to check what Redbox has available. The purpose of the freebies is to attract customers, not knock out competitors, but the purpose of the $1/night is probably to knock out competitors.

            Although I know it’s not a perfect analogy to this situation, I have to ask you. Do you whine at the computer printer manufacturers for using predatory pricing on their printers? Ink refills cost $35, yet they sell the printer (loaded with ink) for $40. Obviously, the printer without the included ink should cost more than $5, so why aren’t you whining about that? The manufacturers do it to gain the customer base and then make their money on the ink refills. Seems like you should go on a crusade against this unfair pricing tactic… They’re giving a $50 printer away for $5. Likewise, Redbox is giving a $1 rental away for free on a limited (monthly) basis. If I keep the rental for 4 nights, they effectively match Blockbuster.

            How about this: Would you whine at Blockbuster this much if they rented a new release for $5 for 5 nights but gave a $1/night refund for each night you returned it early. That way, they can rent the same movie more often and reduce their rental cost to their customers, allowing them to increase their customer base (who might buy popcorn and candy while they’re in the store). That’s all Redbox is doing, but they’re doing it from the other end.

        • Visitor [Join Now]
          Michelle [visitor]

          I agree, if people want to pirate anything they will do it. Either by Redbox, Blockbuster or the local video store. You can download for free pirate programs – it’s illegal but it’s out there. People have been doing it for YEARS!
          I love redbox, not only for it’s $1 a night charge but also the fact that you can get new releases without hassle. We have a local store that charges .99 – but most of the time you can’t get a new release. So that is were Redbox comes in.
          People are just upset because of the success of Redbox.

          • Member [Join Now]
            moviecrazy

            That’s exactly right. People are just upset because of the success of Redbox. But it’s funny how no one was upset at Blockbuster’s success of raping the public for years with their entirely overpriced videos! And now they are having to close a bunch of stores….Ahhwww, that’s just too bad! I hope Blockbuster closes down completely, that would serve them right for all their years of greed!

          • Visitor [Join Now]
            slidecage [visitor]

            mcdonalds gives tons of their food away every year… Ever here of the MONOPOLY promo. they give more food away there then redbox gives away free rentals..

            years ago people made 10,000+ off the game i know of 3 people personally who turn over a 50,000 profit off the game in 3 years

  4. Visitor [Join Now]
    whynetflix [visitor]

    I don’t understand any of these. In my opinion redbox is still overpriced, while Netflix is dirt cheap and it cost less than 10 bucks to watch movie online.

  5. Visitor [Join Now]
    Mike [visitor]

    “I don’t understand any of these. In my opinion redbox is still overpriced, while Netflix is dirt cheap and it cost less than 10 bucks to watch movie online.”

    A buck a day is overpriced? If you’re smart, watch the movie the first day you get it and then return it the next day before 9pm. Not to mention the promo codes….
    Plus you don’t have to get a plan which is nice if you only want one movie but don’t want to go to blockbuster.

    I’m not saying Netflix is bad, they have a bigger selection and if you return them right away you can at least get 20 movies a month (if your going 3 at a time). Problem is some movies have a long wait and if there’s a long weekend, you don’t get any new movies at least for three days or more there’s nothing you can do about it.

  6. Visitor [Join Now]
    O.o... [visitor]

    And what about those of us that actually WANT to leave the house to seek entertainment? Not to mention getting away from the computer for a little while.

  7. Visitor [Join Now]
    Davis Freeberg [visitor]

    Maybe a year or two ago they could have had more success if they would have focused their efforts more, but DVD kiosks have come too far for this type of FUD to be effective. Clearly consumers love them and will be loathe to introduce restrictions on them. Politicians aren’t dumb, a fear campaign about kids using a technology that you have to have a credit card to use just doesn’t make sense. Between the number of kiosks out there and the number or new ones being installed every single day, VPD won’t even be around by the time new laws were enacted.

  8. Member [Join Now]
    lumin47

    Ok, with the promo code on Monday, I got 5 free movies (5 credit cards)
    and then on Tuesday I got “Crank2”, free, cause I used the promo from a new card, ok, I did not realize that I also had “Crank2”
    at the top of my “NetFlix cue list”, also ; and low and behold, I am getting it again
    through “NetFlix” on Wednesday because they are trying to outdo
    RedBox, by being quicker on the new movies; (sucks because I wanted to get the
    last series of “Back To the Future III”) and now I have to wait 3 more days…
    oh well, all in all I just love the movies and very cheap prices I am getting from all
    the vendors!!!

    • Visitor [Join Now]
      slidecage [visitor]

      PLEASE PLEASE PLEASE lets suck all of the money out of the movie making business so there will NEVER BE A CRANK 3…

      who the #$#$# greenlighted that piece of #$#$#$#

    • Member [Join Now]
      grooveamatic

      Why oh why are you putting Netflix in quotation marks and capitalizing the F and spelling queue “cue” (certainly you see how it is spelled when you are on the Netflix website)????

  9. Visitor [Join Now]
    Greg Lang [visitor]

    Video Buyer’s Group (VBG), a group of independent rental retailers: They must represent the Video Rental Stores with the “Adult” sections. According to a recent CNBC Cable show “The Business of Porn” the retail porn sales/rental business is way down. Hmmm!! Must be due to the “skin” in R-rated movies from Redbox.

    • Visitor [Join Now]
      Sloppy Seconds [visitor]

      VBG has nothing to complain about. I’m the one that needs to complain since
      Redbox isn’t renting out porn – yet.

      • Visitor [Join Now]
        Sony? [visitor]
        I work with VBG. To find out why this is important, click here.

        Where is this assumption that ALL VBG members rent out porn coming from.

        I personally can guarantee that at least the one I rent at DOES NOT!!!

        But you could start a business to rent porn out of a machine if you really want to, but I guarantee someone will try to block you.

  10. Visitor [Join Now]
    Jim [visitor]

    DISNEY SOON TO JOIN UNIVERSAL, FOX, & WARNER

    Analyst: Disney Changing Tune Toward Redbox

    Up
    By : Erik Gruenwedel | Posted: 09 Sep 2009
    egruenwedel@questex.com

    The Walt Disney Co. may be changing its conciliatory outlook toward $1-per-day movie rental kiosks and Redbox in particular, according to Pali Research analyst Richard Greenfield.

    Hollywood studios have taken sides on the kiosk dilemma, with Universal Studios Home Entertainment, 20th Century Fox Home Entertainment and Warner Home Video opposed to giving kiosks new release DVD titles on street date, and Sony Pictures Home Entertainment, Lionsgate and Paramount Home Entertainment collectively receiving more than $1.1 billion from Redbox for content. Until now, scuttlebutt suggested Disney was amenable to kiosks.

    Indeed, Disney CEO Bob Iger in July during a financial call all but dismissed the DVD business, claiming that the average household was saturated with discs and no longer sought to own new releases, with the exception of Disney titles.

    Greenfield said Disney’s Hannah Montana: The Movie has become such a popular rental title that the studio has begun to realize what Warner and the rest of the naysayers already know: That the $1-per-day kiosk places the entire movie economic food chain at risk.

    “Everything looks expensive compared to new release DVDs offered for $1-per-day or often free using retailer coupons,” Greenfield wrote in a note.

    As a result, the analyst believes Disney altered license terms for the Nov. 10 release of Up, which he said could cause Redbox to purchase title quantities outside of Disney’s standard DVD rental programs.

    He said Redbox would also struggle during the fourth quarter with copy depth on Universal, Fox and Warner DVDs.

    “We believe the souring of relations caused by the Up situation could lead to Disney seeking a window around Redbox (and hopefully Netflix) in the not-too-distant future,” Greenfield wrote.

    Disney CFO Tim Staggs is slated to address an investor Q&A session today in Marina Del Rey, Calif.

  11. Visitor [Join Now]
    Joey [visitor]
    I work for VBG. To find out why this is important, click here.

    Are you guys serious. Are you honestly saying that a movie is worth less then a bottle of pop out of a vending machine? HELLO IS ANYONE HOME!!!! Are you not hearing everybody in the entertainment industry (studios,unions,distributors,independents) they are all screaming that something is broken here. Red box is giving $1.00 a day rentals, whoopie!! Meanwhile an entire industry suffers. Try and look past the great $1.00 rental and see the underlying issues.

    • Visitor [Join Now]
      Mike [visitor]

      I really don’t care if the movie industry thinks that the redbox plan is wrong. You’ve got overpaid actors, writers and directors who are making millions per film and keep raising prices on theater tickets and dvds. I can’t really feel sorry for them. And if the movie sucks, do they care that I wasted my money and want a refund? No.
      Yes, there’s some broken and it’s that the movie industry makes DISGUSTINGLY too much money and doesn’t want to give it up. And instead keeping prices low to attract customers they keep jacking up the price and then whine about Redbox and Netflix and try to get rid of them. It’s called COMPETITION! It’s good thing so companies don’t form monopolies on their products and can charge whatever they want.

      • Visitor [Join Now]
        Carson [visitor]

        Right on, No one is forcing them to work in entertainment, if their industry suffers, or if they aren’t getting enough money, then they can look for another job. That’s what I’ve had to do before…
        It’s all about the business model, if people don’t feel its worth it to pay $4 for a dvd rental, then yes, the industry is broken, and they need to find a cheaper way to operate.
        If $4 rentals was my only option, then I wouldn’t rent dvds, I would watch TV instead, or get free ones from the library. They aren’t a necessity, just a cheap luxury that *might* be worth a dollar.

        • Visitor [Join Now]
          Joey [visitor]
          I work for VBG. To find out why this is important, click here.

          I’m sure you guys are all right. Everybody in the entertainment industry should just lay down just so red box can succeed. Because this whole industry wouldn’t be just fine with out them… Oh wait I think that’s what the studios are saying that we don’t need you red box your business model is broken and either fix it or go get your movies from wallmart like joe blow. Everyone on this blog acts like it is the devine right of redbox to do business as they please regardless of the toll it takes on the entire industry. Well in fact it is, they can do business as they please as can the studios and I applaud them for the way they are not letting redbox dictate the value of packaged media.

          • Visitor [Join Now]
            Paul [visitor]

            “Everyone on this blog acts like it is the devine right of redbox to do business as they please regardless of the toll it takes on the entire industry.”

            except…it is. How can the movie industry tell another company their buisiness model is broken? Redbox is just adapting to what the market wants. If Redbox’s business model is truely broken (according to the market and consumers) they will lose money and then have to adjust or go out of business. They shouldn’t have to raise their price just because the movie industry wants to keep their artificial scarcity.

            Take Blockbuster for example. Their rental prices are high and they pay whatever percent of revenue to keep the movie industry happy. But, the problem is that they are losing (a lot) of money. Redbox took Blockbuster’s basic idea of renting movies and improved it. They reduced or eliminated a lot of the cost that Blockbuster has by getting rid of the big stores in favor of a small footprint kiosk. They reduced the employee count by having a few people that stock the kiosks instead of having 2-4 people working all the time. By reducing all of this overhead they were able to give consumers a better product in the lower rental prices.

            I would like to know how many 10’s of thousands of movies Redbox goes through in a year. Those are all movies that the industry wouldn’t have sold if Redbox weren’t around.

    • Visitor [Join Now]
      Da76 [visitor]

      Oh yeah, like we’re the problem. Just enjoy the $1 rentals while you can and stop dramatizing the issue. I am!

  12. Member [Join Now]
    yourevilmonkey

    The thing to worry most is the piracy at hand. Internet piracy is more active but $1 for a DVD and .25 cents for a blank DVD equals a $1.25 Movie you can have forever. Some of my family does this and its alot easier and less time consuming then downloading it from the internet, plus you get DVD menus and Bonus Features. This should be the biggest concern for the industry.

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

    When Redbox agrees to pay full price for their product then I agree they can be left alone.

    As it is, they barely make money paying 1/3 the cost of a DVD.

    The Redbox model is broken. It cannot be fixed. The studios are just putting a bullet in the head of this dying beast.

    Sorry folks, Redbox will be gone in under a year.

    You can all go back to pirating then ya cheap bastards.

    • Visitor [Join Now]
      Carson [visitor]

      Worse comes to worse, redbox will just have to wait 28 days for new releases, but that shouldn’t put them out of business correct?

    • Visitor [Join Now]
      Mike [visitor]

      Will someone explain to me how the Redbox model is broken? The way the market works is who ever can sell or rent a common product most efficiently and cheapest is most likely to make a decent profit. You could say they’re not making enough money but how did they manage to get locations all over the country? I get more incentive to rent 6 dvds for a buck from redbox than I would by going to Blockbuster and renting 1 or 2. I don’t believe it should be up to the movie industry to decide how much dvd rentals should be. I’d Imagine redbox should get deals on the dvds if they’re buying them in packs of 1000 or whatever not how much they’re renting them for. I don’t think the Movie Studios struggling for money. I just see the Movie Studios as greedy and they don’t want to give a part of the excessive profit they’re making so they try to get rid of a cheaper option like red box. Which is bad enough with how the economy is lately.

      And calling people bastards isn’t a good way to make argument.

      • Visitor [Join Now]
        Joey [visitor]
        I work for VBG. To find out why this is important, click here.

        You want to know how they continue to grow. It’s purely a numbers game, they show an increases accross the board by expanding it’s like a house of cards eventually they fall. The incresases red box has been showing is purely grpwth because they keep renting more product and buying more movies all the while not showing any profit enabeling them to get more loans for more growth (I believe the profit margin is under 2%) Anyways we are at what 30,000 kiosk well market saturation is between 60,000-75,000 once the market saturation is complete the whole thing comes crashing down. Broken Model that is not sustainable. Ad to that the deals they are making with the studios they have guaranteed 1.5 Billion dollars to 3 studios over the next 5 years all the while the profits are shrinking how can they afford this when there net this year was what 350 million plus there are 4 other studios out there that account for 60-70 % of the major new releases (Broken Model) Finally the life cycle of a kiosk is 5 years none of this has been figured into it yet because none of the machines have hit 5 years yet but they will then what?(Broken Model). I’m not saying it can’t work I’m just saying as it stands now chances are this entire industry is suffering over something that chances are won’t work and I believe the studios see this as well.

    • Visitor [Join Now]
      Rick [visitor]

      John,

      Where did you go to business school? Nevermind. Clearly, you didn’t. The market will determine if Redbox stays in business. Your (lack of an effective) argument is like a car salesman whining that I never pay sticker price for a car. Are you the only person in America that pays sticker price for a car? As I see it, the valid comparison is that Redbox doesn’t require me to pay sticker price, while Blockbuster requires it. In the car example, if the dealer willing to price below sticker gets more business, he ultimately has an opportunity to make a larger profit through higher volume. Having a competitor of theirs whine that they don’t charge sticker price is just whining about getting beat in business.

      • Visitor [Join Now]
        Jim [visitor]

        But the auto manufacturers also determine who is allowed to sell their product & who isn’t.

        • Visitor [Join Now]
          Rick [visitor]

          Jim,

          Agreed. And all of the dealers that I’ve ever bought from that sold to me well below sticker price are still in business, meaning the auto manufacturers still allow it. If the movie companies want to restrict that, have them setup a similar scenario as the auto manufacturers. I’m just laughing at all the people that are whining because RB is renting videos cheaper than Netflix or Blockbuster. They sound like they want to make it illegal. The market will figure it out over time. They’ll either stay in business, or they won’t be able to. Joey was whining about the broken model. If it truly is a broken model, they will go out of business. Until then, stop whining about it.

          • Visitor [Join Now]
            joey [visitor]
            I work for VBG. To find out why this is important, click here.

            It’s not whining it’s called being informed and being involved. And alls I’m trying to get across is that in this industry as with any other there should be a level playing field for all so all can prosper and so we can continue to build this industry. When something comes along that is harmfull to this industry it as Americans is our right and duty to speak our minds.

          • Visitor [Join Now]
            Rick [visitor]

            Joey,

            I applaud you speaking your mind. But when you and Sony? think it’s OK to call for minimum pricing when in reality the market should determine the price, then you haven’t thought out your argument very well. (Just speaking my mind) I see the video rental business as changing. $1 kiosk rentals with a limited movie selection and internet downloads for a minimal fee are the direction of the industry. It’s the “We need to legislate Redbox out of existence” mentality that scares people, and that’s why you and Sony? get so many arguments against your side of the argument.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            There need not be any legislation at all in this scenario.

            The Studios will do business the way they want, RB will obviously do the same.

            RB will have to live with the terms they are given and not simply sue saying it’s unfair.

            Let the balancing act of maintaining $1 rentals run it’s course.

            If RB cannot make $1 rentals work after the balancing act then see if you want to support RB when it has to raise prices.

          • Visitor [Join Now]
            Rick [visitor]

            Sony?,

            See? Welcome to my side of the argument. Stop all your whining and let the market determine who stays in business. No more whining about Redbox giving out freebies or whining that their $1 price is too low. The market will answer all of those questions for you.

            Now that you’ve come to my side of the argument, I’m sure your whining will stop now…

        • Visitor [Join Now]
          joey [visitor]
          I work for VBG. To find out why this is important, click here.

          Nobody said we need to legislate them out of exsistance.
          I’m just saying that what is in place is not working or is not good for this entire industry as a whole. I do think actually there is a place for kiosk in this industry. I just don’t see it being in the way that things are right now. Economically red box is bad for the entertainment industry as a whole with the pricing structure they have in place, no one can refute this as packaged media has declined in value since it’s inseption and economist,studios, and everyone else attribute this to the kiosk’s $1 pricing. Sure it’s great for consumers now but what about in the future? I understand inovation and competitive markets but this I see as a different animal I see this as detrimental to an industry as a whole not helpfull. What is gained by devaluing the product that drives this entire industry except market share for redbox all other avenues of the distribution network suffer for one. It devalues the content from one end of the spectrum to the other from theatres down to sell thru/rentals/VOD.

          • Member [Join Now]
            moviecrazy

            What you and Sony don’t seem to understand is that the price for packaged media has ALWAYS been way too high, so now Redbox (If I believe your argument, which I don’t) is just helping to bring the price of packaged media down to a reasonable price like it should have been all along! Most people only watch a movie once or twice unless it’s a movie they really like so why should it cost $20 dollars for one dvd? Especially when the movie studios have already made a killing for that same movie at the theaters? Once again it’s just the movie studios whining because someone else is making too much money and they’re not getting what they feel is their proper cut!

          • Visitor [Join Now]
            Rick [visitor]

            Joey,

            “Value” is a dicey thing. Look at the stock market. Tell me the long-term value of any company when it changes daily. You can’t succumb to the “value” of something being based on what it used to sell for. As someone on this forum previously pointed out, what is the “value” of a song? You used to get about 10 songs on a music CD. For ease of numbers, say the CD cost $20, so the cost per song for the consumer was $2/song. Now, due to technology and new methods of purchase, most songs are sold for $1.00 each. The “value” of each song is half what it was 15-20 years ago. The same thing will hold true for movies. The value of Die Hard 15 years ago might have been $25 for purchase. New methods of purchase (or rental) in this case, logically change the inherent value of a new movie. Although I could afford it, I would never pay $25 for a movie now, yet I have a large DVD movie collection from 10-15 years ago. Blockbuster reduced the “value” of buying a movie to what it cost to rent it. Netflix reduced it even more, and now Redbox may be reducing it even more. Welcome to change in the movie industry. If that means that the movie companies ultimately make less money 20 years from now, they’ll adapt. Some may go out of business. Some may reduce expenses. Whatever it is, they’ll adapt the best they can. That’s the nature of business.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            If “Netting” $50 to $300 per machine is all you can expect by joining in RB’s theory on what is a reasonable in earnings than I guess I cannot persuade you.

            I do agree that $20 per movie is overpriced, however not every movie makes “Enough” at the theaters. Not every movie goes to the theaters either.

            Should we tier movie prices by Quality and have different prices in renting in regards to titles?

            $5 to $10 Movies physical copies for everyone would be awesome, except there would be a RB in every High Volume Traffic store giving them away for FREE everyday as a loss leader and using advertising dollars to fund them. We would lose any store that has catalog and we would be subject to only 50 titles at a time. If the machines give away a loss leader, why even buy?

            Since the Studios are not willing to take less than a $1 for digital.

            This is a lot more complex than saying everyone drop your prices.

          • Visitor [Join Now]
            Rick [visitor]

            Sony?,

            As a consumer of rented videos, I couldn’t care less what Redbox’s “net” is per machine. If I were to become a RB investor, then it would matter to me. Why does it matter to you as a DVD renter in the least? Why are you trying to persuade me in either direction?

            If you agree that $20/movie is overpriced, and a movie was sufficiently bad that it didn’t make “enough” at the theatre, who would buy it at $20? It’s still over priced. If you’re selling a low-quality item, raising your price above the norm usually won’t help you maximize your revenue…

            I’m not in the DVD rental or movie production business, so I couldn’t care less if the industry uses a tier-based pricing policy. Again, unless you are in the movie business (in which case that explains your clear bias against Redbox), WHY DO YOU CARE? Go rent your movie (or get a free one) and go about your day.

            As a consumer, I wouldn’t have a problem with $5-$10 movies on DVD. At that price, I might become a buyer again, because the studios reduced the premium charged to own my own copy as compared to renting. As a consumer, why do you want a $20 movie price instead of a $5 or $10 movie price?

            I never said a word about saying “everybody drop your prices”. Why do you keep arguing points that aren’t being argued?

            What is your bottom-line goal with all your complaining? I’ve watch MANY more movies due to RB than I ever used to, all while spending substantially less than I used to. From the consumers perspective, that’s a perfect world in the short-term, and we’re all dead in the long-term. In the long-term, the studios and rental businesses will adapt and become something very different than we see today.

    • Visitor [Join Now]
      Tim [visitor]

      Chrysler and GM went bankrupt selling $30,000 cars. So I guess we should all blame Toyota, Ford and Honda and force them to stop selling cars less than Chrysler and GM. And shame on all the “cheap bastards” who bought cheaper cars.

      Explain your statements: “When Redbox agrees to pay full price for their product…” and “…paying 1/3 the cost of a DVD.” Are you claiming that somehow Redbox gets a better price than everyone else? And then in the next breath blaming them for selling at such a low price?

  14. Member [Join Now]
    yourevilmonkey

    The model is defiantly not broken. If I go and rent a dvd from a redbox i pay them $1 for that night. Tomorrow someone else rents it for $1. In a week its went up to $7 for one DVD. Two weeks and you have the original cost of a DVD which is about $14-20. If 25 people buy from one kiosk then that’s $25 dollars a day. I’m not sure of the wholesale cost but it shouldn’t be very high, this leaving room for profit. Redbox is defiantly a good business model. One night for one dollar to watch one movie. Not really that bad.

  15. Visitor [Join Now]
    bobchaos [visitor]

    Whoever said that you the film companies get half and the theatres get half is an idiot. I have a theatre and a drive in. When a movie comes out you get nothing. The film company gets a very high end percentage. NOT 50% as people would think. Try 75-85% going to the film company. The longer you have the movie their percentage drops and yours raises…BUT the longer you have the movie.. the less ppl come..

  16. Visitor [Join Now]
    Sony? [visitor]

    Money talks; bullsh1t walks! If you can’t play the game, change the rules, or whine until you can get your mommy to change the rules, I guess. It seems that’s the movie industry’s mantra these days.

  17. Visitor [Join Now]
    Joey [visitor]
    I work for VBG. To find out why this is important, click here.

    Disney Starting to Pressure Redbox. While we never bought into Iger’s view, as consumers are actively renting Disney movies such as Hannah Montana at Redbox, it appears that Disney is already starting to change its feelings toward Redbox. We believe Disney has asked for a significantly different arrangement with Redbox for its November 10th release of Pixar’s UP. We believe Disney’s terms on UP are far less favorable to Redbox and may cause Redbox to purchase UP DVDs oustide Disney’s standard DVD rentailer programs; it could also impact copy depth of UP in Redbox’s kiosks, which will also struggle during Q4 with copy depth on Universal, Fox and Warner Bros. DVDs.

    The question becomes: why would Disney seek different terms from Redbox on UP if, as Iger says, consumers do not want to rent Disney movies? Clearly, Disney is beginning to view the rental kiosk business differently than it views other forms of rental-price point distribution (such as Blockbuster). Redbox’s $1/day kiosks place the entire movie economic food chain at risk – everything looks expensive compared to new release DVDs offered for $1/day or often free using retailer coupons.
    We believe the “souring” of relations caused by the UP situation could lead to Disney seeking a window around Redbox (and hopefully Netflix) in the not too-distant future.
    While Disney has declined to comment on Redbox beyond their recent conference call comments, we hope investors ask Disney’s CFO, Tom Staggs, about Redbox during tonight’s investor conference Q&A

  18. Visitor [Join Now]
    Joey [visitor]

    How can the $1 rentals be Redbox’s fault? Pricing is set according to what the market will bear. Guess what, if Redbox can charge only $1/per night for its rental, and Redbox does NOT go out of business, then $1 is a good enough price. Conversely, if Redbox charges only $1/night rentals, but then goes out of business, then $1/night is not enough.

    If the movie companies what to make more selling their DVDs, they can raise their prices, and they can see if their sales figures can support such a price increase.

    Otherwise, these separate movie companies coming together to try to set a price to sell their DVDs sounds like “collusion” to me, and maybe the relevant DOJ/FTC/whomever needs to get involved.

    • Visitor [Join Now]
      Joey [visitor]
      I work for VBG. To find out why this is important, click here.

      Ok other Joey (fake poster) that’s a brilliant idea since the redbox with $1 a day pricing is allready driving the value of a DVD down let’s raise the price of it. The whole reason the sell thru is down is directly related to redbox. It’s not that the movie studios want to make more selling their dvd’s. They want to make what they have determined the value of them to be worth and not have the the bottom fall out of them. At least they would like to retain the value as you say “what the market has determined them to be worth” prior to redbox devaluing the sell thru. From what your saying then that the studios shouldn’t try and protect the value of their product and should allow a 3rd party to determine the value for them. That’s not collusion that’s called protecting your product. I mean I would love to buy a porche for $50, if someone sold me one for that price does that mean that the porche manufacture should lower their worth down to $50?

      • Visitor [Join Now]
        Paul [visitor]

        “They want to make what they have determined the value of them to be worth and not have the the bottom fall out of them.”

        That isn’t how the market works….they don’t get to determine the value, the consumer does.

        “I mean I would love to buy a porche for $50, if someone sold me one for that price does that mean that the porche manufacture should lower their worth down to $50?”

        But you can’t find one can you? The cost of the physical material and scarce resources make it not viable for any company to sell a Porsche for so little.

        “At least they would like to retain the value as you say “what the market has determined them to be worth” prior to redbox devaluing the sell thru.”

        How about we go back even further and outlaw automobiles so horse-carriage makers could retain the value of their product prior to Ford, Chevy, etc devaluing their sell through.

        Why should the movie industry be able to limit innovation like that just so they can keep their “value” what it was in the past?
        The content of movies (and music for that matter) is easy and cheap to reproduce digitally so the market reduces the value of a DVD closer to the value of the physical media which isn’t very much.

      • Visitor [Join Now]
        Daniel [visitor]

        BUT, the market has determined that 20 bucks for a new dvd is to much thats why sales are declining. well that and the truelly crappy movies they are putting out. Redbox hit it on the nose, rent at a rate people are willing to pay, which if you break it down is the same as renting from blockbuster your just not stuck with a 5 dollar five day for one movie which means they can have a higher rental rate with fewer copies then a blockbuster. so the whole thing is a pile of crap, its just studios looking for someone to blame there piss poor movie sales on, when in reality the sales are crap cause the movies are crap. This is the same thing that happened 10 years ago with napster and the music indunstry. Just look at your local walmart if you think 20 bucks is not a lot consider the fact that there are quite a few less then 5 year old movies in the 5 dollar bin, but those movies still have the same cost to create and same cost of royalties as new releases so why are the new releases 4 times more expensive? The answer is just like with the music indunstry the studios are conspiring to keep the prices high, which we all remember them getting busting in a class action lawsuit for conspiring to keep the price of CD’s high don’t we?

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

    Again, Redbox is NOT paying full wholesale price for their product. If they were, each machine would running at a several thousand dollar per month deficit.

    If Redbox is willing to play in an even field, then the studios will likely allow them to do so. But they are not and the studios have a right to say no to ridiculous deals which hurt the industry.

    Again, Redbox cannot afford to charge $1.00 per day if they are paying the wholesale price for their DVDs. They would be bankrupt within a couple of months.

    • Visitor [Join Now]
      Joey [visitor]
      I work for VBG. To find out why this is important, click here.

      Come October once redbox can’t get Disney, Fox, And Warner along with Universal titles this house of cards comes tumbling down because they will be paying full fare through wallmart and any other mass retailers they can buy the titles through. If I was an investor I would bail while the gettings good! The public is going to become frustrated with the lack of copy depth and delay on titles along with the less frequent codes that red box is doiling out because they can no longer afford the freebies. the big savelowcostdvd’s public relations thing they are trying is going no where and the courts aren’t going to side with them because they are frivoulous lawsuits that have no merrit. Things are getting worse not better for redbox.

      • Visitor [Join Now]
        slidecage [visitor]

        and then we will all run back to netflix like the good children we are : )

        at least here locally there is no reason to pay more then 1.00 per rental at a redbox… a local chain (family video) sells these movies for 2.99 per night… YOu can very easy get a rent 1 get 1 free coupon online and they will accept them (at least here)

        So i can very easy rent 2 new release movies day 1 for 3.00

        if redbox goes to 2 bucks. it would be 4.00 for 2 movies and im risking my credit card info …. sorry but doubt i will ever pay more then 1.00 to rent from a redbox.

    • Visitor [Join Now]
      Paul [visitor]

      “if they are paying the wholesale price for their DVDs. They would be bankrupt within a couple of months.”

      I think you have your definitions mixed up. They are playing in an even field by paying the same wholesale price that Walmart or Blockbuster are.

      Wholesale price: A price charged to customers who buy large quantities of an item for resale in smaller quantities to others.

      Redbox is just choosing to rent it out instead of reselling it.

      • Visitor [Join Now]
        Jim [visitor]

        Yeah, but who says that the studios HAVE to sell to redbox at wholesale. It’s their product & they can choose who to sell to & who not to sell to.

      • Visitor [Join Now]
        John Small [visitor]

        They are not paying the same price as Walmart or Blockbuster. They have a buyback deal with several wholesalers that makes their cost around $5-6 per disc. The studios are telling these wholesalers that the buyback deal is not allowed anymore.

  20. Visitor [Join Now]
    Jim [visitor]

    LOOKS LIKE COINSTAR IS TRYING TO RAISE SOME CASH

    Coinstar Prices Offering of Convertible Senior Notes
    Press Release
    Source: Coinstar, Inc.
    On Thursday September 10, 2009, 8:18 pm EDT
    Buzz up! 0 Print.Companies:Coinstar Inc.
    BELLEVUE, Wash.–(BUSINESS WIRE)–Coinstar, Inc. (NASDAQ: CSTR – News) today announced that it has priced its previously announced public offering of $175 million principal amount of its convertible senior notes due in 2014. The Company also granted the underwriters an option, exercisable within 30 days, to purchase up to an additional $25 million principal amount of convertible senior notes to cover over-allotments, if any.

    Related Quotes
    Symbol Price Change
    CSTR 31.28 +0.87

    {“s” : “cstr”,”k” : “c10,l10,p20,t10″,”o” : “”,”j” : “”} The convertible senior notes will pay interest semi-annually at a rate of 4.0% per year and will mature on September 1, 2014 unless earlier converted or repurchased. The convertible senior notes will be convertible, under certain circumstances, into cash up to the aggregate principal amount of the convertible senior notes and shares of the Company’s common stock in respect of the remainder, if any, of the conversion obligation in excess of the aggregate principal amount. The initial conversion rate for the convertible senior notes will be 24.8181 shares of Company common stock per $1,000 principal amount of convertible senior notes, which is equivalent to an initial conversion price of approximately $40.29 per share of common stock, subject to adjustment in certain circumstances. This initial conversion price represents a premium of 32.5% relative to the closing sale price of the Company’s common stock of $30.41 on September 10, 2009.

    The net proceeds of the convertible senior notes offering will be used to repay the outstanding amounts under the Company’s term loan under its senior secured credit facility and to pay down a portion of the outstanding amounts under the Company’s $400 million revolving line of credit under its senior secured credit facility.

    The closing of the convertible senior notes offering is expected to occur on September 16, 2009. The closing is subject to customary closing conditions.

    In connection with the offering, Morgan Stanley, BofA Merrill Lynch, Jefferies & Company, Inc., and RBC Capital Markets Corporation are acting as the joint book-running managers.

    The convertible senior notes offering is being made pursuant to an effective automatic shelf registration statement, including a prospectus and an applicable prospectus supplement related to the offering, filed by Coinstar with the Securities and Exchange Commission (“SEC”). You may get these documents for free by visiting EDGAR on the SEC’s website at http://www.sec.gov. Copies of the prospectus supplement and accompanying base prospectus may also be obtained by contacting Morgan Stanley & Co. Incorporated, 180 Varick St, 2nd Floor, New York, NY 10014, Attention: Prospectus Department, email: prospectus@morganstanley.com, telephone: (866) 718-1649; BofA Merrill Lynch, 4 World Financial Center, New York, NY 10080, Attn: Prospectus Department; Jefferies & Company, Inc., 520 Madison Avenue, New York, NY 10022, telephone: 1-888-449-2342; or RBC Capital Markets, Three World Financial Center, 200 Vesey Street, 8th Floor, New York, NY 10281-8098, Attention: Equity Syndicate, telephone: (212) 428-6670.

    This press release is for informational purposes only and does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation for any security in any jurisdiction. The offering will not be made in any jurisdiction to any person to whom it is unlawful to make an offer, solicitation or sale in such jurisdiction. The offering of the convertible senior notes is being made only by means of the prospectus supplement and accompanying prospectus.

  21. Visitor [Join Now]
    Sean [visitor]

    Maybe I don’t understand the rental business. I didn’t go to business school, after all. But It seems that wal-mart has found ways to charge far less for things, and they didn’t put any companies out of business. Though I remember a time when independant grocery stores in small towns hated them , saying wal-mart would put them out of business. Some may be gone, but most are OK. The point is, there was nothing they could do about it. It’s competition, and that’s how things work, with capitolism and all.

  22. Visitor [Join Now]
    Jody [visitor]

    I think that Redbox is the ‘poor mans’ last viable option for entertainment for the night. If this goes away, all those people are just going to resort to watching the movies online – and it would be free then. Does anyone see the point? Thats whats going to happen. I don’t know what these studios are thinking…..are we magically going to come up with more money? Most people who rent from Redbox are on a limited budget. It just seems like another way for the rich to take away from those less fortunate. Just my opinion.

    • Visitor [Join Now]
      Sony? [visitor]
      I work with VBG. To find out why this is important, click here.

      Watch Free with your High Speed Internet?

      How much does High Speed Internet Cost/Month?

      • Visitor [Join Now]
        Paul [visitor]

        That’s irrelevant as no one is going to get internet for the sole purpose of watching movies making it a sunk cost.

        Internet ($40) + buying 5 movies (~$100) = $140

        Internet($40) + 5 Redbox movies ($5) = $45

        Internet ($40) + watch movies online ($0) = $40

        In those 3 limited examples the cost of adding movies for someone who would already have internet no matter what is free.

        • Visitor [Join Now]
          Sony? [visitor]
          I work with VBG. To find out why this is important, click here.

          He stated it was the last “Poor Mans” way of getting movies.

          Last time I checked high speed internet was not on the poor mans dining list.

          He’s simply justifying stealing.

          • Visitor [Join Now]
            Rick [visitor]

            Sony?,

            You need to start using a little logic. I use the “Poor Mans” mechanic, meaning I fix my car myself instead of paying a much higher price to have someone do it for me. Using your logic, that means I have to be poor, but I’m not. I am a “poor Mans” video renter in that I rent from RB for $1.00/night instead of $4-$5/night from Blockbuster. I also have high-speed internet. Since I’m already willing to have high-speed internet, the cost of it is considered a sunk cost, as Paul correctly defined for you. I don’t steal anything. I rent movies for $1, and sometimes I get a freebie. Why does that have you worked up in such a lather? What is your real complaint? Do you work for Blockbuster and they’re losing money due to RB? Ah, now I see why you’re whining about Redbox’s completely legal methods.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            If you read all my statements you will see that I’m mostly concerned of the tactic of using Freebies to drive up market share and devaluing the product.

            How am I to figure “poor man” as a do it yourself mechanic?

            Also, if you read most of my posts, I’m not a fan of BlockBuster.

            I stand by the Stealing Comment!

          • Visitor [Join Now]
            Rick [visitor]

            Sony?,

            The “poor man’s” mechanic is very similar to the “Poor Man’s” way of getting movies. In each, it means you do it yourself for less cost. The analogy should’ve been easy for you to comprehend.

            You can still “stand by the Stealing comment”, but it’s a ridiculous comment. Watching movies via download over the internet from Netflix at a low cost is a reasonable way of watching a movie. You can call it stealing if you want, but until you prove that I’m stealing, your comment is just an uninformed opinion. Stand by your uninformed opinion all you want. You have in most of your other silly posts here.

  23. Member [Join Now]
    ERICJL77 [ericjl77]

    Redbox is gonna go out of business cause everyone with bad credit is going to get like 20 prepaid cards and rent movies but never return them. I know a guy who has like 60 redbox movies that he never returned,he just keeps getting more prepaid cards in his name. What are they gonna do, report him to a collections agency, tell redbox to get in line for his money..lol His credit can’t get any worse..right?

  24. Visitor [Join Now]
    Firegut [visitor]

    Wow! I cannot beleive the number of unsubstantiated statistics. Y’all need to learn to that good research leads to a good debate.

  25. Visitor [Join Now]
    Nick [visitor]

    I just simply don’t get why organizations like VBG think they can strong-arm another business out of the industry, simply because they don’t like their business model. I mean, is Redbox paying any less to the distribution companies than Blockbuster and the like? To me it would be like Starbucks crying foul over McDonald’s now selling latte’s at half the price they do. If you are losing customers to another business model, adapt to attract.

    • Visitor [Join Now]
      John Small [visitor]

      Yes. They are paying less. That is why the studios and the rest of the industry is complaining. If they were paying the same, they would be bankrupt.

    • Visitor [Join Now]
      todd [visitor]
      I work for VBG. To find out why this is important, click here.

      I don’t think they are strong arming anyone I think they are asking for a level playing field. I would hate to see local video stores of any kind go away in favor of a vending machine that only carries certain titles with no interaction, employee opinions on movies, copy depth etc.. And the terms redbax is getting are different they were getting buy backs from distributors something no one else was. Now I believe they will get windows which probabally fits a vending machine more anyways.

  26. Visitor [Join Now]
    Henry [visitor]

    Keep on keeping on. With competition brings about more innovativeness. If we could simple order the downloads for a nominal fee verses going to a outside vendor, that would be best. But to keep the prices as low as they are. Like for instance if REDBOX, or netflix, or blockbuster could make the rental available online for $1, without having to download any software at all. I would prefer that. The purchase could be made and expired in like 4 hours or something like that. I like the Internet as much as I like movies, but I like convenience even more. So until someone can legally provide the movies instantly online, REDBOX and the live, got my vote and continued business.

  27. Visitor [Join Now]
    hareinPA [visitor]

    I could see if the exact same movie started the same day as Redbox would have it available for rental. Which to my knowledge they don’t. If I want to go see a movie on the big screen I will. If I have to seeitrightnow, I will, if not I will wait till it comes to the local $3 theater. You can not tell me that the movie companies are making loads off those places….I wish corporate heads would just leave the little guy alone already.

  28. Member [Join Now]
    flashkill

    Are most people only renting for one night with redbox? I can go to a big name rental store and rent a movie for $4 for 5-7 nights which is less than redbox is for the same time period. I have rented movies from both places but now strictly with redbox because I have more control over how much I want to pay and how many days I want to rent the movie. Now even some big named rental stores are starting up a $1 a night rental program, but I’m sure Sony, Warner, and Fox aren’t going to try to shut down places like blockbuster or movie gallery when they make the shift. Like Linda, I too am renting more movies than I ever had and I am also buying more movies than ever too so the big studios need to back off because just like before I will rent less and buy less if redbox gets punished for the studio’s greed

    • Visitor [Join Now]
      todd [visitor]
      I work for VBG. To find out why this is important, click here.

      The problem is in your own statement redbox is forcing other media streams to meet their prices which dooms them for failure. I think redbox is jeapordizing the whole entertainment stream and I think they are doomed for failure because they are not getting any support and I think it’s plain to see why that is.

      • Member [Join Now]
        flashkill

        Isn’t that the point of capitalism? Should one company be thrown out because they offer the same service at a better price. Should the company the getting more and more people the leave the other companies because of a better choice and price be thrown out to allow the other companies to continue charging it’s customers more and more money. If you had Wal-mart and Target in your neighborhood and a new store popped up with the exact same items but so much cheaper where would you go to shop? Would you expect the other stores to be competitive and at least try match the prices or would you want them to complain how they are taking business away from them and they need to leave. RedBox is the kind of competition that can drive the other companies to lower their prices and again compete for business making things better on the consumers.

        • Visitor [Join Now]
          todd [visitor]
          I work for VBG. To find out why this is important, click here.

          or they could kill an entire industry. the only reason they can have the pricing they have is because they had extremely favorable terms to begin with. Now everyone sees red box as an industry killer so they are changing the terms. So if this is capatalism then I guess it’s on redbox to find a different way to compete.

        • Visitor [Join Now]
          Sony? [visitor]

          There are reasons why you can’t get Gas for below cost at the huge discount stores. There is a state minimum on Cigarettes too.

          The reason, to prevent someone from driving away all the competition. There is a precedent in this capitalistic world we live in.

          All Gas stations sell the same thing, GAS. Now imagine if Costco could sell gas for $1 gallon or give away 8 gallons free every monday with a code. Costco would be driving everyone to their store and would eliminate most of it’s competition. We all would love Costco, except for everyone that is negatively impacted. But that scenario is moot since there have been Government rules to prevent that. If you don’t think Costco would do something that Capitalistic if they could, you are fooling yourself.

          Same could be said for Cigarettes. Everyone sells the same product, but I could see liquor stores selling them for below cost or giving them away to drive up their other sales.

          The consumer would love all these scenarios except they do not see(blinded) all the negative impact that they eventually will see.

          • Visitor [Join Now]
            Tim [visitor]

            What an incredibly stupid and incorrect post. Any retailer can sell gas at any price they want. It’s been done many times before. When a station offers gas at a crazy-low price, people flock to the station, creating long lines until they suck the tanks dry. The station ends their promo and everything goes back to normal.

            Stores have been using loss leaders since before I was born. What, do you think that milk suddenly costs $1.00 a gallon less for one week at one store chain?

            CostCo already sells their gas for less, to drive customers to their stores. They don’t need to give it away, that’s why they don’t, not because they can’t. If CostCo gave away free gas, people would come and get their free gas and leave, unless they were planning on shopping anyway. There might be a few extra sales, but it would never cover the loss leader.

            How do you think WalMart drove small stores out of business? They came into town, sold many items as loss leaders to capture customers until the other stores could no longer sustain the losses and closed up. Then they adjusted their prices to normal. Profits from other stores can sustain the losses at new stores for a few months until the competition is wiped out. But who do you blame? WalMart? Or the people who abandoned the stores the shopped at and gave their money to WalMart instead?

            But none of this compares to Redbox because their model doesn’t compare to stores. It’s been discussed to death how they don’t have the selection, the number of copies, the games, etc.

            You can’t keep a customer in a commodity industry by trying to force the price higher. It’s a simple law of supply and demand. At $4, there are fewer movies that will rent. When the industry uses price fixing to load up their profits and foists an ever-decreasing product quality on the public, there will be a major correction. That’s what happened when the consumer got tired of paying $18 for CDs with one or two decent songs. Now the iTunes Music Store is the #1 music retailer in the country. The movie industry can take note and prepare themselves for the revolution, or they can get trampled.

            It’s so easy to copy a song (and trade them) that even your grandmother can do it. Yet ITMS is the #1 retailer, which proves that a large majority of people will pay a fair price for a product rather than steal it. The time for the great price reset in movies is upon us. If the average person could easily copy a DVD, the industry would already be under duress.

            Maybe you should blame Verbatim, TDK and Memorex et al for selling blank DVDs for $.20 each.

          • Visitor [Join Now]
            Rick [visitor]

            Sony?,

            What world are you living in? Do all of the gas stations sell gas at exactly the same price where you live? They sure don’t where I live. Maybe that’s why your posts are so easyto pick apart. The Walmart near me is almost always less than the major dealers in the area. You mentioned “a precedent in this capitalistic world we live in.” Are you really trying to say there is a precedent for keeping all prices the same in our capitalistic world? There’s an oxymoron for you.

            It’s all about supply and demand. Take an economics course, and you’ll stop making such silly comments as you have so often. If I reduce the price of 1 product so I attract sufficient additional customers that at the end of the day/week my total profit is maximized, then it was smart for me to reduce my price on that item. Trying to outlaw RB and their method is ridiculous. The market will figure out if they stay in business or not. At the end of the day, somebody will stay in business, because there will always be a desire for people to see movies. The winner may not be in the form of a brick & mortar store. It might be online watching. It might be Redbox. Who knows right now? But outlawing their method would be ridiculous and against our “capitalistic” way of doing business.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            You cannot sell gas for whatever price you want. Ask your local Gas Station.

            There are State Minimums on Cigarette sales. That is the biggest advertisement a store can use. “Cigs at the State Minimum”.

            Besides, you missed the point and got sucked into my Ultra Example.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            I understand Supply and Demand perfectly fine.

            Just remember where the Supply comes from when it comes to Redbox. Supply and Demand is far more complex than you think it is!!!

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            Minimum Gas Price Link

            http://www.homelandstupidity.us/2005/08/19/high-gas-prices-its-the-law/

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            Not the greatest link, but It shows that Cig minimums DO EXIST!!!

            http://www.csnews.com/csn/print/article_display.jsp?vnu_content_id=1003939320

          • Visitor [Join Now]
            Rick [visitor]

            Sony?,

            I’m ROFLMAO at your ridiculous posts regarding minimum prices on gasoline. First, I never argued either side of whether there were minimums on gas prices or not, so apparently you won an argument that wasn’t being argued. Second, if you’ll read the article you posted, while it said minimums do exist, the whole point of the argument was that minimums are unnecessary for multiple reasons, meaning the article you quoted supported MY SIDE OF THE ARGUMENT ON PRICING.

            “Lobbyists such as WMDA Service Station & Automotive Repair Association, the Gasoline Retailers Association and the Petroleum Marketers Association of America are able to sell legislators on the fairy tale that if high-marketing gasoline outlets such as Wawa, Sheetz, Wal-Mart and others are allowed to charge prices that are too low, they’ll drive all other gasoline stations out of business. Having done so, these high-marketing outlets could charge any price they pleased and make huge profits.

            In economics, we call this strategy predatory pricing. It’s an argument that has a ring of plausibility, but there’s little evidence anywhere anytime that a predatory pricing scheme produced results even remotely close to what would-be predators envisioned. Questioning this fairy tale and asking for evidence would never cross the mind of a legislator.

            That’s right, a bunch of service station owners, afraid of Wal-Mart moving in and offering lower prices, got laws passed against lower prices and real competition. They used the specter of “predatory pricing,” the act of pricing below wholesale cost to drive out competitiors, to get the laws pushed through. Far from creating a level playing field for competition, however, minimum gas pricing favors one group over another.

            Even the Federal Trade Commission agrees. In a 2003 staff memo, the FTC said that minimum gas pricing hurts consumers, that predatory pricing is almost never seen in reality, and that minimum prices are unnecessary due to federal antitrust laws.”

            Although you try to use the Predatory Pricing argument, your quoted article makes a joke of your argument. I appreciate you giving me the perfect article to support my side of the argument.

            Now THAT’S FUNNY…!

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            Thanks for taking the bait!!!!

            I used that link to show the extremist view can be broken.

            Looks like the “Fairy Tale” assumption that predatory pricing does exist?

            True or false. Redbox is currently destroying an industry.

            Looks like the Gas Station Owners really did have a case.

          • Visitor [Join Now]
            joey [visitor]
            I work for VBG. To find out why this is important, click here.

            true

          • Visitor [Join Now]
            Rick [visitor]

            Sony?,

            You’re hilarious. In spite of reality and the articles you quote working against your side of the ridiculous argument, you still plod along making your unsubstantiated argument.

            In spite of the FTC pointing out that predatory pricing doesn’t actually work, you plod along on your ridiculous argument anyway with your lackey Joey readily available with his well-thought argument of “true”. Way to dig deep for an argument, Joey. ROFLMAO… And Sony?, way to use the FTC’s argument against your argument as “proof” supporting your argument.

            Are you aware that Blockbuster was in trouble LONG BEFORE REDBOX? That’s the reality of their situation. Stop whining and trying to legislate competition. The market will figure this out soon enough. In the meantime, go get a free movie and build Redbox’s customer base.

        • Member [Join Now]
          Mark [rb123456789]

          Sony?’s links about minimums for cigs and gas show how routinely he speaks half-truths as gospel.

          A few states have such minimums. Most do not. So a blanket statement that free or below-wholesale cigs and gas are illegal is wrong and misleading. The doom and gloom Sony? portrayed if there were no such minimums have’nt happened on any significant scale in the many states without minimums.

          • Visitor [Join Now]
            Sony? [visitor]
            I work with VBG. To find out why this is important, click here.

            In Maryland, Minnesota, New York, Wisconsin, and several other states, minimum gas price
            laws require gasoline retailers to set a minimum price for gasoline based on the current average wholesale price.

            I think you may have missed the word “Several”.

            What I say here is NOT gospel, these are all opinions.

            I don’t go around calling useful examples as wrong and misleading as they are True in certain places and they positively show that there are examples where competition has been thwarted on killing the competition. Making my statement relevant in the conversation.

  29. Visitor [Join Now]
    Tlee [visitor]

    Don’t we live in a capitalistic society? So what if the studios can’t generate enough revenue? Learn to adapt and evolve. It’s survival of the fittest. Studios get no sympathy from me.

  30. Visitor [Join Now]
    sys admn [visitor]

    So Redbox’s $1 per night is bad, but Blockbuster’s $4 for 5 nights is not? When BB will sell you the disk for as little as $4 a few months later?

  31. Visitor [Join Now]
    • Visitor [Join Now]
      slidecage [visitor]

      at worker at my local blockbuster told me that Blockbuster is thinking of just putting out boxes (like redbox) and closing down all B&M stores by end of 2010..

      boxes should be seen more by winter. with over 5000 boxes or was it 50,000 boxes by the summer of 2010 and then the news about keeping all stores open or close them all and just do it this way by the fall of 2010 and a massive clearance of stuff in oct to dec 2010

    • Member [Join Now]
      moviecrazy

      Uh, do you have a personal beef with Redbox? Why do you blame it ALL on Redbox? How about telling the REAL WHOLE STORY? You mention nothing about Netflix which has had more of an impact and a longer impact from what I gathered from the story you linked on here, did you kind of leave this part out?…..

      “Netflix’s DVD-by-mail service, launched a decade ago, has hit Blockbuster particularly hard as more households have embraced the concept of picking out their rental choices online before the DVDs are delivered through the mail for a monthly subscription fee that usually runs from $9 to $17. In the last two years, Netflix lured even more customers by building up its library of movies available for instant viewing over high-speed Internet connections.
      Netflix now has 10.6 million subscribers and, unlike Blockbuster, is becoming more profitable. The Los Gatos-based company earned $55 million through the first half of this year while Blockbuster lost $15 million.”

      I for one would be overjoyed to see those greedy little bastar#$%s from Blockbuster go out of business completely!!! They have ALWAYS been way overpriced and have raped the public since the first day they opened their doors. I say good riddance!

      • Visitor [Join Now]
        Carson [visitor]

        You’re right, I should give Netflix their credit, I occassionally use their free trials, as well as blockbusters’. Though Netflix seems to be smarter in not letting people do it over and over again…you have to be more sneaky…
        I love capitalism…

      • Visitor [Join Now]
        joey [visitor]
        I work for VBG. To find out why this is important, click here.

        The difference is netflix deals more in catalog titles, that is there bread and butter and 70% of there generated revenue. Where redbox deals in New Releases and that is whats killing the sell thru side of the business along with devaluing this industry.

  32. Member [Join Now]
    footballguru666

    Technology is getting faster and more advanced each time, should we not blame redbox but the brilliant minds that invented high speed internet? Customer’s are always trying to get something cheaper and faster all the time. Just like the change people went from dial-up to broadband. Faster downloads. And now its so fast that there is a way to get full dvd quality pirated movies from the internet. Whats next? Full blueray downloads, if that’s not happening already. Isn’t $1 a day better than paying nothing at all to download a movie? The movie industry has been falling for a while now, even before redbox came into the picture. The dark knight made a whopping 2nd place all time, was it because of redbox and netflicks.. no, it was because it was well written, had buzz, and it was based on a character that has alot of fan base that people wanna see in an expensive theater with amazing sound and clarity. Most movies you see in theaters aren’t just good anymore. Bad acting, poorly written and yet their actors get millions to make it. If the movie industry wants to survive, it has to adapt to the ever changing technology that our humanity has evolved to doing.

    Just like GM had to cut operating costs, its about time that the movie industry needs to do the same. I’m sure actors would do fine of instead of making a 10 million dollar salary per movie to a 4 million dollar salary per movie. If they strike, then there are thousands of other actors who would love to take their spots. Innovation and creative thinking is the basis of our existence. Good writing is a good way to put fans in the stands. No one wants to see a awful film. Spending 10 dollars a ticket to a horrible film makes one feel that a DVD is better than going to a theater and spend spending money. Cutting operating costs and lowering actors salaries will keep Hollywood in business. Its hard but these are the sign of the times. Making films doesn’t have to be expensive. There are so many things that are never necessary to do, yet cost so much to let it happen. Simple films can also be something that the film industry can get into without having to use the big explosions and 3d graphics. What happened to the good old days when people wore costumes and had simple settings?

    I feel sorry for the film industry, but I feel worse for our American people struggling to just survive our down economy and enjoy a dollar-a-day dvd rental to forget these fallen times. Last time I checked, it was competitiveness in a free market that gave America its swagger. It was a free market that made America the land of opportunity. But when something genius and competitive comes up, greed just wants to push it back.

    Crappy films make negative money.. Good films, gets people to buy tickets. Something Hollywood forgot a while back….

    If nobody agrees with me, it doesn’t matter. Our advances in technology in whatever field is whats gonna turn everyone on everyone.

    • Member [Join Now]
      moviecrazy

      Very well said!

    • Visitor [Join Now]
      Sony? [visitor]
      I work with VBG. To find out why this is important, click here.

      Agreed on most parts, but it’s a tough sell.

      Demand is still way too high for these Mega Stars and Mega Budget Movies. We, as a whole, will have to abandon these movies all together in order to get the changes that you outlined. We will have to make the studios get rid of these million dollar actors and overpriced productions. If we keep going and paying more every year, they will keep getting million dollar jobs and making mega million dollar blockbusters.

      The Difference in Price at the Theater vs. the New Perceived DVD value is far too large. The Difference in Price vs. what you paid 5 years ago at a rental store is also far too large.

      $1 or Free Physical rentals will definitely put an end to these Mega Stars and Mega Movies. However, evidenced by the demand for these Mega Stars and Mega Movies, we have a very serious problem.

      How many more movies would we go to in the Theaters if the price was $1 or there was a free code? I’m sure most of us would love that, but I’m thinking a few Theater owners would disagree.

      • Visitor [Join Now]
        joey [visitor]
        I work for VBG. To find out why this is important, click here.

        I like how everyone keeps getting hung up on these million dollar actors. What percentage of the industry are those 2%-4%? What about the rest of the production? I’ll bet most of the films budget goes to average joe people. You have to remember that it starts with an actor but 1 major film has to feed alot of mouths all the way through a distribution channel.

        • Visitor [Join Now]
          Rick [visitor]

          What an actor makes has little direct bearing on what Redbox charges. They have their costs associated with setting up their business and buying their DVD, and they have to figure out how to maximize their revenue stream to see if they can make a profit over the long-term. If an actor makes $1M less for a specific movie than he otherwise would have, it will have minimal effect on Redbox’s cost structure. That makes the question regarding how much actors make a moot point regarding RB’s business model.

          Face it. The movie business will be there in one form or another 50 years from now. It will change with the times like everything else. Whining about legislating that Redbox can’t give away freebies or charge only $1 for a movie rental is ridiculous and goes against our capitalist methods in the U.S. And if you’re not whining about legislating these things, then what’s the point of Sony’s and Joey’s silly arguments? Just to complain that RB is hurting the video rental business? Welcome to business.

          If you aren’t looking for legislation, then what are you looking to do? Ask Redbox to stop it? Good luck, but I don’t think they’re inclined to listen to you. 100 years ago, some company was the best buggy whip manufacturer. I’ll bet their employees whined this much about Henry Ford ruining their business then as well… Maybe if they asked him nicely… Nope. He wouldn’t have listened either, and thank God he didn’t.

          • Visitor [Join Now]
            joey [visitor]
            I work for VBG. To find out why this is important, click here.

            Your looking at it from the exact opposite perspective. I’m not saying what an actor makes has an impact on what red box charges. I’m saying what redbox charges has a direct impact on what the rest of the industry can support, which all the way down the line supports alot of people.

          • Visitor [Join Now]
            Rick [visitor]

            Joey,

            That’s fine. Look at it from your stated perspective. That’s a true statement. And the movie industry will have to adapt just like every other industry in the U.S. has to do.

            I work at a manufacturing company. Years ago at a company-wide meeting, our CEO was commenting on all of the new business we recently had picked up. One of the employees was concerned that by us picking up all that new business we were hurting one of our competitors and their employees. Our CEO responded that we either adapt or die. He said that we’re losing some of our existing work to other competitors while we pick up this new work. Once the employee understood it’s a “Eat or be eaten” scenario, she dropped her objection to us picking up work from a competitor. Likewise, Redbox is a competitor in the industry. They only need to worry about what is good for their company, and that’s what they’re doing. They’re not doing anything illegal, so it’s all fair game. It’s up to their competitors (i.e. Blockbuster) and their suppliers (i.e. Movie production companies) to adapt. It’s not up to Redbox to adapt in a way that helps their competitors and suppliers. In your complaint, maybe the movie studios adapt by reducing their production assistants by 20%. Maybe they cut their Craft Services budget by 20%. Maybe they innovate and find less expensive ways to make movies. Whatever it is, it’s up to them to adapt how they run their businesses.

          • Visitor [Join Now]
            joey [visitor]
            I work for VBG. To find out why this is important, click here.

            I agree and I see the way that the studio is adapting is by cutting red box off and windowing them because as you stated they need to do what is good for them which in turn is good for the industry as a whole. The way you state this you act like the studios need to adapt to red box. I disagree it is redbox who needs to adapt to the studios who will and should protect the value of their product. No one said what red box is doing is illegal neither is what the studios are doing.

          • Visitor [Join Now]
            Rick [visitor]

            Then why all the whining about Redbox? The studios may change their arrangement. Redbox would have to adapt. That’s what I’ve said from the start. If Redbox can make a go of it with their business model, why whine so much here that their business model is broken. Unless you see their financial statements, all you have is an opinion, and those are a dime a dozen. My point is why come to this forum and complain non-stop about Redbox. Rent a movie, or don’t. Get a freebie, or don’t. Nobody cares either way what you do. I just don’t get the point of all the whining here based on no factual financial information on your part. The best Sony’s got is to make ridiculous claims and bolster his argument by pointing to web articles that actually refute his argument. (That’s the funniest thing I’ve seen in one of these forum arguments in a LONG time.)

  33. Visitor [Join Now]
    Vita [visitor]

    I bet all these people here who complain about Redbox are at the booth as soon as a free code comes out.

    Look at Little Caesar’s and Subway offering their products for only $5. Let’s all complain that Domino’s and Quizznos are being put out of business with a $17.00 pizza and a $8.99 sub.

    People, chill out. I, for one, LOVE freebies and frugal deals. I applaud any company who helps me save my money.