There's only one blockbuster video rental store left in the entire world.
But somehow, those Redbox kiosks still seem to be outside of every shopping center in
the US. In fact, they have around 40,000 of them, which is about triple the number of McDonald's
locations in America. So how is Redbox still such a common site in the world that's now dominated by streaming?
Well, although streaming services typically offer lots of content for a pretty low monthly
fee, there's still a pretty big gap in the market. Lots of the movies on streaming services, particularly recent releases, are only available
for an additional one-time rental fee that can run up to around $6.
By contrast, Redbox still rents DVDs and Blu-rays for just $2 a pop.
And if you're out shopping anyways, it doesn't even cost additional gas money to make a special
trip to rent a movie, as Redbox focuses its business in places where folks are already
concerned with cutting costs are likely to shop, stores like Walmart and other discounters.
Even people who pass through the areas would rather just rent a $2 film from Redbox once
or twice a month instead of spending $15 in the same time period on a streaming subscription,
especially as streaming is becoming more fragmented, often requiring TV and movie fans to subscribe
to several of the services to access all the content they want.
Those monthly fees can add up quickly. Redbox is most popular in smaller metropolitan and rural areas that have relatively lower
costs of living, places that are more likely to have people on the hunt for a good deal,
as well as less likely to have access to broadband for streaming.
Combine this with how Redbox often has movies a customer might not be able to access on
their streaming service, and suddenly their business model kind of makes sense.
And the fact that a vending machine is a heck of a lot cheaper than running to a brick and mortar store definitely doesn't hurt.
So even though Redbox has carved out a niche for itself with physical disc rentals, they've
still been facing declining revenues for the past few years.
Even with the advantages their kiosks offer, the part of Redbox's customer base that is
stuck with DVDs and Blu-rays because their late adopters of the new tech have started
to gravitate more towards streaming, with ever-increasing broadband speeds helping to
push more people away from discs. So while Redbox isn't planning to just abandon its kiosks in the immediate future, it's
also dipped its toes into the streaming wars. They have an app for most platforms like your phone, smart TV, or streaming stick that offer
free live streaming services of ad-supported movies and episodes, kind of like Pluto or
Tubi. Redbox also has individual rentals like on Prime Video or iTunes, though they're more
expensive than renting their DVDs, even for the same movie, meaning you're paying for
that kind of convenience of not having to go to the kiosk, kind of like how a hotel
minibar works. But is this going to be enough to compete with other services where streaming is their
bread and butter instead of a more recent add-on?
Redbox's plan seems to be to try and create partnerships with multiple studios and content
distributors to make its app kind of a one-platform-for-everything type of solution, instead of having to go to six different
apps to watch all of your content. Combined with a loyalty program and original content, Redbox hopes they'll be able to differentiate
themselves from other competitors in the crowded streaming market.
Only time will tell if they're able to pull it off, but until they figure it out, you can still dust off your old DVD player and slide in a freshly rented disc.
There's just something comforting about it, especially when it doesn't work because it's
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