You've seen them in Wal-mart, McDonald's, 7-Eleven, and tons of other retail, supermarket and convenience store chains. They are commonly referred to as DVD rental vending machines, and they only charge $1 a day.I have to admit that when I first saw this concept, I thought it would be short-lived - but I was apparently wrong. The company behind this successful business model, RedBox, has over 15,000 machines and generates nearly $400 million in annual revenue.
That means their making more than $1 million dollars a day.
Naturally, such success breeds competition. Blockbuster Video has already launched it's own brand of DVD rental machines. USA Today reports that, by the end of 2009, they are planning to have 3,000 kiosks that rent DVDs for 99 cents a day. Their machines, unlike RedBox's, will also sell DVDs and videos games.
For more information about the industry, visit:
www.usatoday.com/tech/products/2009-08-11-rental-dvd-redbox_N.htm?csp=usat.me
Thanks for posting numbers on this! I was wondering how much Redbox was making at that low rate. I figured they got most of their ROI from people who returned movies late or people who opted to purchase. From what I noticed (jittery people standing in line at 8:55 p.m.), 10% and an average of $2/movie rental is right on the money!
ReplyDeleteMust admit, I was skeptical at first. So on the first attempt; I reserved w/my AMEX. After I deemed Redbox wasn't a hoax and they secured credit info, I automated. Now, everything is prefilled upon check-in plus confirmations sent by e-mail.
The main thing I do not like about Redbox is that they are extra slow to get the better movies. So you kinda have to wait longer than it takes Blockbuster to get their movies. However, most movies these days sux so, it's no pressure to wait to pay a $1 to watch one. One thing I REALLY like about Redbox is that you can take a chance at a movie and don't feel like you wasted anything. Benjamin Button and Slumdog were two movies I would have paid extra to go see had I known they were really that great, but thanks to RB I paid $2.14 for both! Gotta love that! The other thing that's super great is you can return a movie to ANY redbox. With three RBs in my area, I'm never late! :o]