Several months ago my daughter from Arkansas visiting here introduced me to renting movies from Redbox. It is a recent addition to the Bemidji scene, but has been actually in exsistance since 2002. I was pleased by how easy the machine operated, how it actually sends you a confirmation email, and the great selection for of new movies for only $1.00 price per night.
The Associated Press Tech writer Jessica Mintz recently did a piece about the company. They currently have 15,400 vending machine kiosks in operation and they are currently opening 1 new machine PER HOUR! The article quotes Netflix CEO Reed Hastings’ concerns about the competitor. “By the end of the year, kiosks will likely be our number 1 competitor. There are already more kiosks in America than video stores”. And with the tight economy, many people are renting videos rather than buying them.
I remember seeing Redbox in several McDonalds in the Twin Cities years ago. McDonalds developed the concept in 2002 as a way of branching away from fast food. In 2005 900 machines were operational and McDonalds opened it up to other financial partners. Current owner Coinstar took majority ownership and this year bought McDonalds out completely.
Redbox machines carry about 700 discs with 200 titles mainly new releases. About 4 million of us swiped our credit card through their kiosks just last month. Netflix and Blockbuster at Home pays postage twice for every DVD rented. It does best when customers choose ambitious subscription plans and are slow to watch and return movies. Redbox by contrast profits on renting out each disc as many times as possible before demand for the movie starts to fade. Redbox closely tracks rental titles to predict the right mix of titles and the right number of copies for each location. It has also started letting customers go online and reserve a DVD at a specific machine location.
Blockbuster has just signed a deal with NCR Corp (maker of ATM’s and cash registers) to develop a 10,000 DVD kiosk machine of its own. I’m not the most technological wizard…but I am surprised the technology doesn’t exist to have blank DVD’s and that the movie you choose is downloaded digitally and “burned” onto the DVD while you wait. That would eliminate the need for 700 discs and the machine would never be sold out of a popular title. Return the DVD and the old movie could be overwritten with a new one. Maybe I’m dreaming here.
There are a few drawbacks to the Redbox program. The one nearest to us is outside which in January makes it not very conducive to standing and searching the screen for a title. Also, the screen is hard to read on a bright sunny day. Another machine in Bemidji is located in a Walmart store. Not the greatest to fight traffic and parking just for a movie. But great if you happen to be at the store shopping and decide to watch a movie. Who would have guessed something “archaic” like a vending machine would be such a force in the rental movie business?