The Video Buyers Group (VBG), which represents around 1,700 video retailers, is nothing if not determined in its efforts to undermine Redbox. At a recent Midwestern Independent Video Retailer Association event, VBG president Ted Engen alleged that Redbox remains unable to successfully stock titles that are denied to it by the Hollywood Three. Engen also claimed that, through his group’s research, the quantity limits recently put in place by several major retailers are causing a dearth of Warner, Universal and Fox DVDs in Redbox kiosks for several weeks after they are released.
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According to Home Media Magaine, “Engen said VBG tracked 529 Redbox kiosks in 35 states online and in person, and found that as of Feb. 9, Warner Home Video’s Jan. 19 releases of Whiteout and The Invention of Lying were available in 19.6% and 44% of kiosks, respectively.
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20th Century Fox Home Entertainment’s Feb. 2 release of Amelia was found in 13.2% of kiosks, while Universal Studios Home Entertainment’s Love Happens (Feb. 2) and Couples Retreat (Feb. 9) were found in 23.4% and 2.2% of kiosks, respectively.”
Frequent Redbox apologist, analyst Eric Wold, said that the titles cited by VBG were low box office performers and not necessarily representative samples. Said Wold:
“Those were very low box office titles. . . Whiteout did $10 million and Lying did $18 million. I would believe that Redbox wouldn’t even make an effort to get those in right away as consumers wouldn’t care. This coincides with our checks for low box office titles and I would hope Redbox would be doing this.”
Does the VBG have a point, Insiders, or is this just sour grapes from an organization clinging to a declining business model? Get those fingers typing and let us know what you think in the comments.
(via Home Media Magazine)
VBG claims Redbox unsuccessfully stocks dvd new releases, and Redbox counters that the new releases mentioned were not ones that Redbox cared to be successful in stocking due to low box office success. That leaves the customers somewhere in the middle. I’d think that Redbox would have gotten enough customer complaints by now that we don’t care about box office success–we care about quality or interesting movies. I’m still waiting for 500 Days of Summer…. And personally, I just saw Avatar and regardless of box office success, I thought it was way over rated. Reminded me of a special-effects elaboration of the Pocahontas/John Smith story for some reason :-).
declining business model?
How about *endangered* or *extinct* business model!
“Brothers at War” is still in *0%* of kiosks in some searchable redbox regions.
It’s entertaining to read about *both* sides being incompetent!!
Sour grapes.
Redbox rules. Hollywood sucks. Sadly, Redbox has to adhere to Hollywood’s efforts to stymie the public’s ability to save money. Nevertheless, since we live in a capitalistic country and the public has stated what they want and the price they are willing to pay for it, I assure you someone (ie Apple) will figure out a way to get it to them for that price. It just takes time.
The studios are more than happy to let you rent movie for $1.00 if you are willing to wait 28 days after the movie has been released.
You don’t see the studios allowing the discount theatre chains to get movies on the day of release do you?
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Sure no discount movie houses get the new stuff from studios. Some studios however gladly give Redbox their product without a window. Wonder why?
Yeah and those studios supplying redbox with titles seem to be very happy with the arrangement.
Paramount which owns CBS, which owns “Lets Make A Deal” gave all of its studio audience free redbox rentals for a year the other day. Thought that was pretty cool.
Its funny that John Small touts this RULE that applies to cheap rentals having to be had only after 28 days to make it fair for all.
So I would say the same rule should apply to the movies themselves…just as they do for actors and athletes. The bigger and better (I know..hardly ever better) the film is or costs the more they can charge. So for every Avatar a studio puts out that cost THEM so much and is so enjoyed by all they can charge $19.95 retail or $5.00 for a rental. But then for every Marine 2 put out by Fox or Post Grad, you can only charge $2.50 or even the “dreaded” $1.00. Somehow I figure they’d never go for that. I say you can’t have your cake and eat it too studios….shape up or ship out because the minute a grand entity like Fox or Universal dies, another bright entrepreneur will see the opportunity and take their place. We treat these old studios like sacred cows when they should have to be forced to produce just like every other business and human being in the world!
You are not making any sense at all RunninWild. Sorry, but you just aren’t.
I think I get it….
You said redbox should wait 28 days if they want to rent for so cheap….just like a discount move theater does. I assume you mean that they have to be limited to renting what then becomes a “lesser product” to be able to rent it so cheap. So then a theatergoer should be able to pay less at the box office for a “lesser product” film. Aren’t the studios already doing this with the whole 3D thing? I kinda get ya RunningWild.
Problem is that you never know which film is going to hit it big. take a look at Paranormal Activity. Small budget, big returns.
You also have to look at titles that have big success on DVD after limited success on the big screen.
The only rule is that of time. Discount theatres get their titles after enough time (28 days or so) has gone by. Redbox can get their titles after 28 days have gone by.
This is pretty simple guys. Try to pay attention.
The answer is simple. Redbox gave those studios a 50% increase redbox coverage over their expected market share in order to secure a deal with them. Free cash for minor studios made them happy. No surprises here.
John Small-minded, you speak as though you have some insider knowledge of these deals, so which studio do you work for? Please, feel free to open up about who you are and who you work for. If you have knowledge of some deal, then speak freely and fill us in, otherwise shut the f*ck up.
Oh tinybrat, really?
Here is what you do. Read back several months on this board. All of the information was reported by Michael (owner of this board if you don’t know that)
I’m sorry that by my using simple analytical skills you think I am working for a studio. However, I think that reflects badly on you, not me.
John, what is your motive here? If you don’t like redbox, take a hike.
Anyone can make up figures like you like to rattle off, however, look at the numbers redbox is posting. Nearly a million rentals a day and you think they are going to go bankrupt, really?!
I’d like to put a wager on who goes out of business first. Blockbuster, Hollywood Video or Redbox. My guess is both blockbuster and hollywood video will go out of business this year, while redbox continues to grow. My other prediction is that redbox and the big 3 will come to an agreement by the end of the year which will catapult redbox to #2, behind netflix, and my third prediction is that when redbox goes with digital downloads as well, that will push them past netflix to be the top dog in the rental biz by 2012.
So those are my predictions, and I know yours are that redbox will fail miserably and somehow people will go back to wanting to pay $5 for a new release… Hmm, I wonder which of us will be right… hmm. Maybe we should ask the 30 million redbox users..
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My predictions are that Movie Gallery completely goes away this year, BB files for Ch. 11 but survives for several more years after getting rid of their underperforming stores and Redbox raises their prices so that they can come to an agreement with the Big 3.
I am not against Redbox. But their business model, as it currently stands, does not work. Their average machine does not even make $100 / month in profit. This is from their own numbers. And it is getting worse each quarter.
Renting a million movies a day means nothing if you are losing money on each of those rentals.
Again, I am not hoping that Redbox will fail. I am just pointing out the actual financial facts behind the company.
But why to you care? You’re on here like an infomercial all the time slugging it out all day long.
Me? I don’t give a damn if it’s a good or bad business model. If I go visit my redbox next Tuesday and it’s gone, then, hey, life goes on. I’ll rent somewhere else as cheaply as I can.
You sure seem obsessed with this. Either this is your strange hobby or you do work or earn $$ from a studio.
Just seems like a weird way to spend every day on something that matters not.
Why do you care why I care?
I work in the industry. I do not work for a studio. I know enough about the industry to know that the Redbox model was not working.
Thought this board was all about sharing information. I guess you guys only want to hear the cheerleading side and avoid the realistic side of things.
If you don’t like the truth, just don’t read my posts. It really is that simple.
Obsession isn’t good for you. Lighten up, you may live longer.
Exactly what do you want people here to do anyway? I don’t see any point to your daily, consistent carrying on and on. As long as they rent for a buck, people will jump on it.
Why shouldn’t they? That’s the only truth you need to know. People rent for price, convenience, and selection. No one stops to consider the business model before plunking down a rental fee.
It’s “Gee, I hope this movie doesn’t suck”. Not “Hmm, maybe I should drive another 10 miles to a store I can pay 5 dollars to rent in as this nearby Redbox presents a threat to the free world with their fubared business model!”
Seriously? You think anyone here cares if it’s a good business model or not? You’ve got to be joking!
Chill Mr. Small. Enjoy a movie for a buck or 5 bucks. But just enjoy the movie. That’s why we’re here. The rest is just nonsense.
With the growth of kiosk operators here in calif, to me these guys don’t make sense to me , its like I am smarter than you , no I’m smarter! cant we all get along and just enjoy the $1 dollar rentals from Red box and the blue box out peace
No obsession here.
I like the entertainment business.
I like explaining the economics behind the business to people.
I suspect there are many people on this board who appreciate my comments but don’t bother to respond.
You need to stop worrying about me and read what I say.
I am not anti-Redbox. I just think that their business model is borked.
So yes, people will happily put down their $1.00 to get a cheap movie. But if Redbox goes out of business and all the video stores in your town are gone, then what are you going to do?
That is a dream come true for the studios. And will cost everyone a lot more than that $1.00 they like to pay.
I’ve read what you say, and say…
Few investors sink money into a bad business models. Redbox is holding their own.
You worry “…if Redbox goes out of business and all the video stores…are gone, then what are you going to do?” But the marketplace takes care of itself. It’s simply supply and demand.
You ignore Netflix and BB on-line. My account provides 18-22 DVD’s for $20 a month. Also $1 each – same as RB.
You “…like explaining the economics behind the business to people.” But why do you stop short? If Redbox is doomed to failure what about XYZ Box who will step in and fill the void next month charging $1.50 or whatever is correct. Or RB will adjust its model to survive.
If you’re going to educate be comprehensive with pro’s & con’s including items contrary to your POV. Else this is nothing more then an on-going rant by someone with an axe to grind.
So you don’t like the RB model, you believe they will change it, and you enjoy your own redundancy. Got it.
You keep repeating yourself, while I’ll go watch a handful of Redbox free or dollar movies. Knock yourself out.
Guess you have something against the “dollar store” model too… Pretty funny.
John Small,…I’m one person on this board who appreciates your comments, and all comments by all people. To read all the pro and con views of a discussion is good to make an informed decision. One thing I don’t appreciate or gets me annoyed is having to click in to read ‘hidden’ comments due to the discretion of readers who disagreed with a comment and, therefore, voted to eliminate/hide it quickly with a lot of thumbs down votes. Poor FoxWins’ comments were hidden the other day before he/she probably even pressed ‘Submit Comment’–and that’s a first for me to feel sorry for FoxWins ! MICHAEL, is this thumbs up/down part of a whole program you installed? What’s the purpose? For me, when a comment becomes ‘hidden’ it just shows a majority who want to hide someone else’s view in order to purport their own view which differs from the comment. The pro/con discussion becomes very one-sided when that happens. :-)
Bravo rb!
Thanks RB. Your posts are always worth reading as well.
Movie King – This site is about Redbox so I post talking points about Redbox. It is kind of the whole point of this site. And yes, I do think RB will adjust their model in order to survive. I have been saying so for months here.
Agree.
Yea, it is not really being used properly. I was hoping it would bring to light some good comments, but it has mostly just been used to suppress views that people might not like. That was definitely NOT the intent.
I’ll see what I can do to make it better.
Does it have a setting so that the thumbs down differential won’t hide things? That would solve everything really.
I don’t mind if people hate on my comments but the hidden aspect is annoying.
Yea, I just tweaked the setting a bit, so I don’t see any hidden comments right now. I’ll keep an eye out and see if it stays that way.
Personally, I think that there are some movies you want to see in the theaters and others you can wait to see at home. Maybe some of the execs have figured out that Redbox isn’t going to cut into the movie audience sales but bring them money is faster from those who are willing to wait. How many times have I decided to wait until it went to dvd and then just forgot totally about it. Especially now that I can often watch it for no extra charge on my computer through netflix or things like it. That’s my two cents.
How does Home media or VBG discover how many redbox machines have ever had these movies? I mean, if I go to the web, all I see is what is in the redbox at that moment. If this is just a spotcheck in time, it doesn’t tell me whether the movie was in there and already rented out or reserved, correct? How can I tell what machines in my area have stocked the movies but just won’t be back until later?
Fascinating comments from the VBG. Contrasts with Blockbuster who said they stocked up with The Hangover and other restricted titles to counter Redbox’s workaround. Yet, Redbox’s workaround was successful according to BBI, and BBI was left holding the bag on a bunch of unrented titles.
Then you have LGF saying Redbox is working for them, and Paramount had a huge home video quarter even while pumping titles into Redbox. Redbox clearly didn’t hurt Paramount’s sell through.
One note John Small (aka Rich Greenfield) is certainly getting a lot of mileage with his B.S., yet Redbox continues to grow while BBI shrinks.
Who is Rich Greenfield?
Oh, you mean the guy from Pali. Right, that’s not me. He is far more negative towards Redbox than I am.
In fact, isn’t he the one who said the Redbox may lose 50% of their revenue. I would never say that.
I do believe that Redbox’s current business model is unsustainable and they need to raise their prices though. That is deifintely bourne out when you read their quarterly results from the last couple of years.
I remember that there was an analyst that said Netflix’s model was flawed. He eventually figured it out. Now with a billion in revenues you claim Redbox’s model is unsustainable. Sorry but they aren’t going away. The business is not optimized right now but it is the epitome of sustainability. Most studios hate them and they employ a massive work around yet still they have a product that is deeply supported by consumers. Creating a business model in the face of such adversity is the mark of a survivor. You and others may wish them away but that won’t do you much good. You can also pretend that they are about to roll over but that won’t do much good either. If you don’t deal with Redbox they will keep getting bigger. Yes they will be under-earning in this scenario but will still make plenty of money.
A product that is deeply supported but losing them money is a bad business to have. They are one bad step away from disaster. They need to increase their price and settle with the Big 3 before they truly get squashed.
Where’s Fantastic Mr. Fox Redbox!?
It doesn’t come out until March 23rd.