While DVD emporiums implode all around us, Redbox is blowing up.

January 9, 2012


Redbox: The ATM of DVD’s

Blockbuster and Borders are history for obvious reasons. Netflix, Amazon, iTunes and other content purveyors are better, delivering films to your computer or mailbox for just a few bucks. In addition, cable continues to improve its video-on-demand. Being a horror aficionado, I’ve been amazed at what I can get via IFC films, which is part of my cable package. In the past, I’ve used niche providers to obtain obscure and/or cult films but more and more I’m finding what I want from Netflix and Amazon, often by just selecting VOD on my remote.

And then there is the phenomena called Redbox. You’ve seen them. They’re those, well, red boxes parked in front of Jewel Foods, Walgreen’s or 7-11. They are like ATM’s for DVD’s.

When I first came across a Redbox I scoffed. I figured only people living on the margins would have use for them: those poor unfortunates who didn’t have cable and/or personal computers, the type of person who buys pre-paid cell phones.

I figured wrong. According to the website, there are 28,000 Redbox units nationwide and that number is growing by the day. Without knowing much about the company, or, for that matter, having ever seen an ad for them, I do see something more conclusive: Customers. Lots of them. Fact is, every time I run into a 7-11 for my Zero Calorie Monster fix, I see people lining up in front of a Redbox.

This evening, at a 7-11 in the trendy, bustling Lakeview neighborhood of Chicago I witnessed a group of teenagers selecting movies; I saw a young couple picking up a film for date night; I saw an older pair choosing their weekend entertainment; I saw a guy just like me renting “Cowboys and Aliens.” Ultimately, what I saw were dollar signs.

But shouldn’t Redbox be doomed? I mean, what’s the difference between marching into a Blockbuster versus hitting a Redbox? And what about the trendy couple hopping out of a Range Rover to pick up a copy of “The Debt.” It’s not like they don’t have computers or cable.

Is Redbox cheaper? Maybe a little. Is it easier? Debatable. My hunch: the notion of vending a movie opens a loophole to conventional wisdom. The brand taps into something in our DNA (but what?), prompting us to purchase from them instead of elsewhere. Whatever it is, Redbox is kicking ass. They are a legitimate success story in a time and space mired by failures.

Obviously, the key for them will be maintaining success as DVD’s go bye bye. My guess is Redbox already has a plan and that it contains a streaming video solution taking advantage of the same impulse-buying mechanism that drives the brand now. Amazon, Netflix and iTunes may think they’ve cornered the market but I wouldn’t count Redbox out. Not while they’re still on every corner.

As for an ad campaign, it appears one is on the way: Redbox campaign in works.

4 Responses to “While DVD emporiums implode all around us, Redbox is blowing up.”

  1. I thought the very same thing about Redbox being for “people on the margins” when they first popped up, but my attitude has changed.

    Mostly it is the price point issue. I don’t consider myself a “cheapskate”, if that term doesn’t date me, but why pay 5-6 bucks for a movie when I can get it for a buck (1.29 with the new price increase). I have friends who are constantly complaining that they don’t have any money and are really struggling financially, but rent on VOD 5 nights a week. That’s 30 bucks or there abouts. I can do the same at Redbox and it cost me 6-8 bucks.

    I never used to think about the math, but my logically minded wife began teaching me about it when I smoked (years ago). When I wanted to see something I rented it or VOD’ed it. But in real numbers 10 movies a month for 12 months on VOD is about $720 (added to the cable bill which may also increase the taxes you pay). The same amount of films on RB about $154. That’s over $500 in savings. If you rent more, (I generally will watch 2 movies in a night, one with the wife, maybe a rom-com and one with lots of car chases and killing after she goes to bed) it can start turning into real money.

    I’m also in no rush for any DVD. If I need to review one for concepts or want to use one as illustration reference I will use VOD.

    As far as Netflix is concerned, I have been using there On Demand service, but may discontinue it. It’s only 8 bucks a month, but talk about limited options. As I posted a while back, they recently added Transylvania 6-5000 as a “new release” in comedy. I’m sure Jeff Goldblum, Joseph Bologna and Ed Begley Jr. were excited to show a new generation of actors this blockbuster, but really? “New”?

    I don’t think RB is the end all be all, but I can definitely see where it makes a lot of sense.

    Michael

    • SRP said

      Michael- The price point issue is very real, no question. But I also think there is something about the brand, which makes it special. They will need to tap into that moving forward. And if they do it right it will lead to something greater than a numbers game.

  2. I don’t think this is a major motivating factor, but for consumers with children, Redbox shortens the argue time about what to watch. With Netlfix, a family can take forever to pick out a movie for “Family Night” because as far as most younger kids are concerned, the movie from 5 years ago that they have seen 60 times is no reason not to watch it again. At Redbox, there are limited choices and availability issues plus ‘mom’ can put the kabosh on renting something again that costs money.

    In addition, the time frame aspect of the movie with an expiration makes the watching of the movie more of an event. With Netflix, it is very easy to pause, and then not get back to the movie until tomorrow, or the next day, or the next day, etc.

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