Redbox Killed the Video Store

The little red box that could... -- Picture courtesy of Wikipedia

by blogSpotter
Redbox LLC is a company that specializes in vending machine retail of DVD's. I recently started seeing these "red boxes" popping up at various familiar places around town -- HEB, Walgreens and Wal-Mart to name a few. Thought nothing much of it; I currently rent movies from Apple TV which is the ultimate in butt-on-the-couch convenience if you don't mind the $2.99 rental fee for a standard-definition movie. Netflix offers a similar service with the Roku set-top box -- customers can rent and stream a movie to the TV without leaving the house (or even the couch).

Not everyone can afford Netflix or Apple TV -- both of these services have hefty entry fees (purchase of the set-top box) or a monthly service charge. When I recently visited my Mother in Round Rock, she lamented that her favorite Hollywood Video was being shuttered. She doesn't have Netflix or Apple and the nearest Blockbuster is a ways away from her house. We were in a bit of a quandary until we saw the Redbox summoning us at a nearby Walgreens.

Several things amazed me right off that bat. The vending machine has an easy, intuitive interface with a huge selection of recently released movies available for rent. More amazing is the price structure:

$1/movie per night.
$1/night late fee.
After 25 nights, you’ve purchased the movie for $25.00.

All transactions are Debit or Credit card; you can get a receipt and track late fees if you supply an optional email ID. My Mom and I rented 3 movies (Wolverine: X-Men for me, Management and another chick flick for her). Total cost with tax, for 3 new movies: $3.25.

That same 3 movies would run about $9.71 from Apple or Blockbuster. They’d be cheaper on Netflix but since most of Netflix movies are mailed you have a very delayed movie gratification. Apple, Blockbuster and Netflix have the advantage of selection depth. If I want Hitchcock’s Vertigo, Redbox won’t have it. I discovered one other Redbox drawback when returning my movies; there can only be one person served at a time. All I wanted to do was return 3 movies – had to be patient and let the customer make his careful choices. It was lightly misting so I got to get wet while I waited.

Redbox had a little hiccup when 3 movie studios (Universal, 20th Century Fox and Warner Brothers) thought that Redbox’s cheap prices would eat into their own sales. The studios put in a 28-day delay for new releases, prompting a suit from Redbox. As of this writing, the suit is still active, advantage Redbox. Looks like the studios’ actions could be seen as monopolistic although the jury is still out.

CONCLUSION
If you are a person “of means” you might like Apple TV best of all. You have a huge selection with instant streaming delivery to your TV. You don’t even have to put down the popcorn or the remote control. Netflix is a middling choice – I personally don’t want to wait for a movie to be mailed to me. Blockbuster is becoming less and less relevant (except for their own DVDPlay vending machines which compete with Redbox). Very shortly the only customer base for Blockbuster will be technology-challenged old people or the economically disadvantaged who can’t afford broadband.

What does that leave at the “economy” end of the DVD rental market? It leaves Redbox of course. People will brave the wind, rain and occasional waits to rent fantastic movies at $1 a pop. Chances are, you have a Redbox machine at the end of your street. And chances are, after you see the amazing convenience and selection to be had, you’ll be a Redbox convert.

ADDENDUM
This blog has some erroneous info and I need to amend it. First a simple factual correction -- the Netflix box is Roku not Roxio as stated earlier.

Also, Apple appears to have the 20+ day delay on current movie releases. Several movies now on redbox won't be available for rent from Apple until mid-November. Frequently the Apple movie server is slow and your movie selection isn't available to view until hours after it's been rented. This makes the "instant gratification" factor cited above way less important and less accurate. Apple is still great -- when it serves up the movie quickly or it's the exact movie someone is looking for. But redbox is looking better all the time.

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