July
2
Redbox Changes DVD Habits
I like to guest-lecture at various college courses taught by my industry pals because I always learn things. This week I learned from the students that convenience and last-minute gratification are key to their movie-watching decisions.
While some of these kids do check film critics on Rotten Tomatoes, most don't download movies, illegal or otherwise, but they do watch TV shows for free online. They often impulsively check online listings at the last minute when they feel like going to a movie. And they also go for the convenience of renting from Red Box kiosks at McDonalds, Walgreens, Wall-Marts and supermarkets for a dollar a night.
To rent a DVD, simply make your selection, follow the easy instructions and, with just a swipe of your credit or debit card, you're on your way in just minutes! And it's so inexpensive! There are no membership or late fees. You just pay $1 a night for every night you have the DVD!
It looks like cheap $1 rentals at Red Box kiosks are picking up. Meanwhile shares of Blockbuster, the largest U.S. movie-rental chain, dropped 23% last quarter, according to Video Business, "while shares of Netflix, the largest movie-rental operator via mail, fell 18%." 11,000 kiosks are expected to be in service by year's end.
Here's Video Business on Redbox's stalled plans for an IPO:
Redbox, the largest U.S. operator of movie-rental kiosks, delayed filing its prospectus for a planned public offering after the stock markets had their worst second quarter in six years. Redbox, majority owned by coin-exchange machine operator Coinstar, said in May that it would file its prospectus by the end of the second quarter. Following that announcement, the company hired former JetBlue Airways chief financial officer John Harvey as its financial chief.The company, whose investors also include McDonald’s, looked to take advantage of its leadership position in a kiosk industry predicted to surge as movie-rental chain stores cut units. U.S. consumers, attracted by movie-kiosk prices that are lower than movie rentals at stores such as Blockbuster, will spend $800 million at kiosks by 2010, triple the amount spent last year, according to Convergence Consulting Group. Meanwhile, store rental revenue, estimated at $5.4 billion last year, will fall to $3.1 billion by 2010, according to Convergence.
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