As a DVD rental destination, Redbox may not be as convenient as Netflix. Of course, with rental kiosks popping up almost everywhere, it is getting more so. It also costs only a buck to rent a Redbox movie. That's a pretty good deal in tough times and many see it as a better way to go rather than paying a monthly Netflix subscription regardless of how low the fees go.
"We are in locations where consumers are already shopping," Chris Goodrich, a spokesperson for Redbox, told The Post and Courier newspaper. "We are saving customers that extra stop."
The typical Redbox kiosk is said to generate $50,000 a year in revenue after three years.
"We have grown at a phenomenal pace over the last six years, and that growth is continuing even in the midst of a recession," Gregg Kaplan, chief operating officer at Coinstar Inc., the parent company of Redbox, said. "We're not seeing anything that's slowing it down."
Netflix, which used its mail-order subscription service to grab large shares of the movie rental market from Blockbuster, now sees the potential for those gains to slip away as kiosk operators such as Redbox are placed at greater numbers of locations.
"By the end of the year, kiosks likely will be our No. 1 competitor," Netflix CEO Reed Hastings said. "There are already more kiosks in America than video stores."
Discussion Questions: Will DVD kiosks maintain their popularity and hold onto their customers once the economy rebounds? With the growth of on-demand and internet video, what's the future hold for Redbox and its competitors?