Can Redbox Top 2 Million Rentals on New Year’s Eve?28 Dec, 2010 By: Erik Gruenwedel
Redbox on Dec. 31 should surpass the previous record of 2 million movies rented on New Year’s Eve, an analyst said.
Citing data from a commissioned survey of 1,014 adults conducted by Kelton Research in Los Angeles, Redbox said 47% of respondents said they planned to rent movies on New Year’s Eve.
Redbox is offering special discounts to consumers, including a free rental for every three titles (including Blu-ray Disc) rented concurrently, and two free rentals with five titles rented at the same time.
Competitor Blockbuster Express, which is owned and operated by NCR Corp., is offering three rentals for the price of two with the code# HNY987.
Michael Pachter with Wedbush Securities in Los Angeles said Redbox will exceed 500 million rental transactions in 2010, making the probability of topping 2 million transactions on New Year’s Eve (and any Friday) likely.
Colleague Edward Woo said fourth quarter revenue projection for Redbox is about $360 million, which averages about $4 million in revenue per day based on 90 days in the quarter. Woo said the revenue estimate is about $2 per rental turn multiplied by about 2 million transactions, plus or minus video game rentals.
In addition, Redbox ends the year operating nearly 25,000 kiosks, compared to nearly 20,000 kiosks in 2009.
A Redbox spokesperson said the company can't predict breaking the record, but said consumers can reserve titles for New Year's Eve beginning at midnight Dec. 30.
Woo isn't buying the cautious outlook.
“They should top 2 million rentals on New Year’s Eve,” he said.