By Brad Tuttle Monday, Mar. 08, 2010
Renting a DVD from a Redbox kiosk is as easy as getting a Snickers from a vending machine and costs about the same too. The $1-a-night DVDs can be returned to any of Redbox’s 22,400 kiosks, which are located in supermarkets, McDonald’s, pharmacies and strip-mall parking lots — [...]
Coinstar CEO Paul Davis said March 3 that in the future, some titles from studios may have a window at Redbox machines, while others won’t, depending on their box office take.
“Even with the advent of additional streaming/VOD services coming into the home, we believe the relatively low price point of DVD rentals will keep the physical DVD segment strong with increasing penetration for at least the next 10 years,” Wold wrote.
According to an article from Variety, in just the fourth quarter of last year, Blockbuster lost nearly $435 million. They are hoping returning these late fees to new releases will give the company a boost since nearly 80% of its rentals are new releases.
Indeed, the average Redbox kiosk generated 8.9% revenue growth during the first three quarters, according to analyst Eric Wold, with Merriman Curhan Ford in New York, who believes Q4 revenue per kiosk will increase 2.7% above that.
Dan MacArthur is an avid user of Redbox, a self-service kiosk popping up in grocery stores, fast food restaurants and drug stores here in Maine and across the country. They have hundreds of titles, old and new. And for Dan, it’s a good bargain compared to the video store.
Pachter said he expects Redbox to increase its kiosk count to around 40,000 by 2011, while Netflix probably will see a large increase in customers who stream videos online. Both, he said, offer less customer service and selection than either Movie Gallery or Blockbuster.
Redbox has a rocky relationship with Hollywood. The company rents movies for $1 per night at 21,000 kiosks across the country. The studios don’t like that. They’d rather have people spending $5 at Blockbuster or on VOD to see their new movies. So Universal, Fox and Warner Bros. have stopped distributing their new movies to Redbox. Instead, Redbox has sent out hundreds of workers to stores like Target and Wal-Mart to buy DVDs at retail to stock their kiosks
Movie Gallery is reportedly set to file a second Chapter 11 bankruptcy within two years as early as next week, according to The Wall Street Journal.
As part of “prearranged” bankruptcy, Wilsonville, Ore.-based Gallery, which owns the Hollywood Video franchise, would shutter two-thirds (1,800) of its most underperforming stores, idling several thousand workers.
Amy Choi checks the selection of movies at a Redbox DVD movie kiosk in front of the Paseo Verde Library in Henderson on Tuesday. The Paseo Verde Library and the Green Library recently added the rental kiosks.
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