Familiar to millions
All apologies to Alabama fans, but the real crimson tide sweeping the nation these days is made of DVD rental machines. Coinstar, Redbox’s parent company, announced yesterday that it has outpaced its end-of-year projections for kiosk placement and the company now has more than 22,210 kiosks in operation.
According to Video Business, Redbox has been on a tear the last six months, installing an average of 900 kiosks per month. That translates into more than one kiosk an hour.
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Redbox president Mitch Lowe was effusive about the milestone:
“We are delighted with the high retailer and consumer demand for our low-cost, convenient DVD rental service. . . We’re proud of the relationships we’ve established with the top retailers in the U.
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S., and we continue to identify viable, high-traffic locations where consumers shop to install Redbox kiosks.”
We want to hear from you, Insiders: why do you rent from Redbox? Is it the cost, the convenience, the codes? How was this tiny little McDonald’s and Coinstar venture able to capture lightning in a bottle?
[via Video Business]
i love redbox because of the accessibility – i don’t have to depend on store hours our late fees. The low prices are amazing and i like that i can return to a different lcoation. They made dvd rentals so easy.
22,000 units and non of them can stock the Hot new releases they advertise each and every Tuesday. Think about it.
Only those titles from those studios that they’re in litigation with. Other than that, they’ve always had the most current new releases. Try reserving them online. This has been the best way for me and my family.
has anyone else noticed that the blockbuster kiosks offer those titles the day of, that RB seem to have a delay in getting inot their kiosks? and they’re also a $1 a night too. I guess these studios are hiding the fact that this is fuel to the fire of RB’s anti-trust lawsuit
Its because there is no restriction on BB getting the new releases since its a brick and mortar business first and formost so they are able to get these movies for their kiosks as well…and if the studios dont put restrictions on their kiosks as well then yeah it definately fuel to the fire for the lawsuit. The restrictions should be across the board. But it only seems to be aimed at kiosk operators not brick and mortar stores for some strange reason….but they are the same type of business…they rent dvds….
Blockbuster is in partnership with the studios and gives 40% of its rental revenue to the studio (this is the revenue sharing deal that the studios tried to strongarm redbox into taking). Obviously, Blockbuster is a front by which the studios compete in the video rental business against the likes of redbox and other independents.
Nothing wrong with the studios partnering with Blockbuster per se, except that the studios give DVD inventory to its rental partner Blockbuster at severely discounted prices that are not available to other volume purchasers. This is analogous to AT&T leasing phone line access to it’s retail telecom businesses at substantially lower costs that it sell the same access to its independent retail competitors. Antitrust laws prohibit AT&T from this kind of anticompetitive wholesale pricing; and is the essence of why redbox has filed an antitrust lawsuit against some of the studios.
Don’t rent from Blockbuster – if you do, you are supporting anticompetitive. Surely waiting a week or two and supporting redbox standing is worth taking a stance against the anticompetitive practices of the studios and the studio’s retail partners (the biggest of which is Blockbuster).
Posting lies do not make them true Feste.
I’m glad that you discovered that true principle John. I was beginning to worry about you.
Or were you, by chance, accusing ME of lying here?
If so, what, pray tell, did I post here that is factually incorrect?
Can you point to the error that you imagine you see in my post? Point to the lie if you can John. Can you, John?
You remind me of the Monty Python skit where a man goes into a business to buy an argument. After stating a carefully drawn out assertion, the “arguer” just resorts to sophomoric rebuttals, like “No it’s not” and “No it isn’t”.
I do not delude myself into believing that I can lead you to see something that you don’t want to see, but I do believe that reasonable people who read what I’ve written will perceive and understand the truth in my post.
You see John, here is another truism that you should internalize: Asserting that the truth is a lie, no matter how many times you do it, doesn’t make it so.
Your continued equating to revenue sharing as being anti-competive is a lie Feste.
Redbox has access to the same revenue sharing deals if they want them. In fact they have revenue sharing deals in place with several studios at this moment.
The problem, as always, is that Redbox wants to play by their rules only.
John, your explanation just doesn’t add up. Why would Redbox admit to incurring more cost due to procuring titles at retail outlets, and not be interested in a revenue sharing agreement with these studios to keep their cost down. Unless freste is right, that these studios tried to strong arm Redbox into signing an agreement that only favored them and created an unfair playing field for rentailers.
But there’s also the option of paying more per disc, if you don’t agree with the revenue sharing model. But these studios have directed the wholesalers to not sell to kiosk operated companies. Because the kiosk companies would only buy less from the distributor. Hence the front of a B&M establishment by BB (even though they’ll be closing 900 B&M stores in 2010).
Sorry John,
But it is you who lie. I said that there is “nothing wrong with revenue sharing per se.” I know that you can read, but apparently you don’t understand what you read.
My assertion (that revenue sharing WHEN COMBINED with deeply discounted/subsidized access to inventory is anticompetitive) cannot be characterized as a factual error (or lie, as you put it). It is a CONCLUSION or assertion BASED on factual observations. You are free to disagree with my conclusion, but characterizing an inference as a lie is, frankly, dishonest.
Nothing that I’ve said here is factually incorrect, and you are unable to demonstrate that it is: Blockbuster gets deeply discounted prices from the studios for inventory. The studios deal with Blockbuster gave them 40% of Blockbuster’s rental revenue. Independent Retailers do not have access to the same inventory pricing that the studios’ revenue sharing partners get. Those are facts and they are not in dispute.
Where you and I disagree is on what those collection of facts mean.
But since we are talking about lies, why don’t you try the shoes on yourself.
Here is where you’ve lied repeatedly:
1) You claim that Redbox’s antitrust suit is to get a better price for inventory than the studios offer to any other retailers. That IS a lie. In fact it is such a transparent lie that people who think about it for a second are laughing at you. One need only ask themselves if the court would even consider such a claim as the basis of an antitrust action. Ludicrous.
2)You repeatedly claim that Redbox’s model is unprofitable at $1.00 per night. Yet the facts show that redbox has continued to be profitable in spite of concerted and escalating attempts by the studios to strangle it. See Google finance. Redbox’s business model is profitable even when the studios cut them off from accessing vids at the same price the Studios sell it to their competitors. Give them a fair playing field (same volume based wholesale pricing that the studio gives to their rental agents) and they’ll blow the studios’ rental partners out of the water.
3) You continue to assert that Redbox has access to the same wholesale pricing as other revenue sharing partners of the studios if they would just agree to the same terms and conditions (including revenue sharing). Strictly speaking, this is true, but the lie you promulgate is that after entering such and agreements, they could still be considered as “independent” retailer vs a rental partner with the studios.
Those are lies John and they are your lies. You are kicking against the pricks John.
If you haven’t already read the 1998 Times Magazine article, now would be a good time. In it the author shows that the revenue sharing agreement with Blockbuster put the neighborhood independent rental stores at a competitive disadvantage and propelled Blockbuster and its partners to capture the rental market.
Again, I challenge you to demonstrate that my FACTS are wrong. But you can’t, can you John. So you resort to vituperative instead.
>My assertion (that revenue sharing WHEN COMBINED with deeply >discounted/subsidized access to inventory is anticompetitive) >cannot be characterized as a factual error (or lie, as you put it). It is >a CONCLUSION or assertion BASED on factual observations. You are >free to disagree with my conclusion, but characterizing an inference >as a lie is, frankly, dishonest.
Your conclusions is not only incorrect but irrelevant. Redbox could have the same revenue sharing terms as Blockbuster if they wished.
>Nothing that I’ve said here is factually incorrect, and you are unable >to demonstrate that it is: Blockbuster gets deeply discounted prices >from the studios for inventory. The studios deal with Blockbuster >gave them 40% of Blockbuster’s rental revenue. Independent >Retailers do not have access to the same inventory pricing that the >studios’ revenue sharing partners get. Those are facts and they are >not in dispute.
They are in dispute because they are untrue. Many indie retailers get revenue sharing terms on par with Blockbuster.
>1) You claim that Redbox’s antitrust suit is to get a better price for >inventory than the studios offer to any other retailers.
You know that Redbox was getting a better deal than any other rentailer in the business before the studios stepped in. Only after that deal was stopped did they file the anti-trust suit.
>2)You repeatedly claim that Redbox’s model is unprofitable at $1.00 >per night. Yet the facts show that redbox has continued to be >profitable in spite of concerted and escalating attempts by the >studios to strangle it. See Google finance. Redbox’s business model >is profitable even when the studios cut them off from accessing vids >at the same price the Studios sell it to their competitors. Give them >a fair playing field (same volume based wholesale pricing that the >studio gives to their rental agents) and they’ll blow the studios’ >rental partners out of the water.
Again, Redbox was able to barely squeak out a profit when they were getting pricing that was lower than any other Rentailer in the USA. If you added the additional cost of their paying full wholesale for their product, their numbers slip deeply into the red. The full affects are yet to be seen.
>3) You continue to assert that Redbox has access to the same >wholesale pricing as other revenue sharing partners of the studios if >they would just agree to the same terms and conditions (including >revenue sharing). Strictly speaking, this is true, but the lie you >promulgate is that after entering such and agreements, they could >still be considered as “independent” retailer vs a rental partner with >the studios.
There is no lie here at all. If you want to play with semantics, that is fine. I still claim that a retailer can enter into a revenue sharing deal and remain independent. You claim otherwise. I know that the majority of store owners who are in revenue sharing agreements would side with me and not you.
In addition, Redbox has ALREADY agreed to revenue sharing deals with several studios. Does this mean that Redbox is now tainted as well?
Its my understanding that NCR has licensed the Blockbuster name and doesn’t get any support from Blockbuster in obtaining titles. If the Blockbuster machines has new product, I think that’s because they only have about 10% of the machines that Redbox has. This means they are out obtaining copies of dvds that the studios donn’t want to sell on the release day the same way Redbox is buying them.
OMG!
It has been a couple of months since I updated my “bookmarks” for Redbox
kiosk sites, and low and behold they have literally doubled the amount of kiosks in my neighborhood stores,
yes-siree,
now at:
Stater Bros.
and
Ralphs
it seems like all the retail chains have caught on to this growing phenomenon
which is bringing “buying” customers into their stores!!
and it is good for us, the “buyers” as we have more local kiosks to choose from.
It’s the cost and convenience that has me being a redbox fan. It has been inconvenience lately with the closest redbox to me being out of service for 3 days now so I haven’t tried renting one of the new releases yet. I just haven’t felt motivated to go visit the next closest redbox to rent a dvd but I would return one there if I had a DVD out and my neighborhood one was out of service.
I think first it was just cool to rent from a machine, not having to deal with a person. All the free codes, renting online, the low price, no hassles. Just got me excited about renting again. I am all for having as many of these machines as possible. I would love to see them @ even more fast food chains, gas stations and other locations so I have lots of choices close to home.
in my area redbox charges two dollars a rental and only has half of the new releases there, this week block buster express is opening 19 machines in my area and says they have all the new releases tuesday and blue ray versions too, wow. Now who do i choose?? A red box thats 2 dollars and has hardly any titles except off the wall ones that people wouldn’t rent or the blue box which is way ahead. Its not a hard choice here.
I rent from Redbox for many reasons however there is some poetic justice that Blockbuster killed the mom and pop industry by getting scale. As a result of scale (ie 4000 sq. foot stores and getting in bed with Hollywood to guarantee new release product) technology and entreprenurial talent figured out a better way at a cheaper price to deliver dvds to consumers (as did Netflix). That’s what makes America great. Its so sad to see Hollywood try to defeat this trend. They really do need to adapt.
But I digress, I love Redbox because I love the idea that $1 can entertain me or a room full of people for just $1. It gives me the ability to get rid of my expensive cable bill while still being entertained. I look forward to seeing Redbox offer games and perhaps even music (wouldn’t it be great to rent an albumn for $1 or $2 dollars and then download the whole thing.)
I also love how the business model shares the wealth with the retailer hosting it. I gives me a reason to visit my supermarket and when I do, I usually see they have something on sale. That’s just another way for me to save money.
Basically, its a win-win-win business model which is not what Blockbuster ever was especially when it did its revenue sharing deals with Hollywood.