Redbox: Only Disc Rental in Town3 Feb, 2012 By: Stephanie Prange
When we first moved into our house, there were two Blockbuster Video stores and a Hollywood Video within about a mile. A few years later, I heard about neighbors waiting to get movies in their queue at Netflix. I noted to these neighbors that they could easily get what they wanted at the local rental store (either Blockbuster or Hollywood). But they all were content to wait in the queue (after all, the price couldn’t be beaten). First one Blockbuster closed, then the Hollywood, then the other Blockbuster.
Then I noticed the stream of people waiting in line at the local grocery store to rent a movie from Redbox (at that time $1 a day). It was a different kind of queue, but one that seemed to be making inroads in its battle with Netflix.
The studios soon took notice and slapped windows on the kiosk company and subscriber rental service Netflix, both of which were charging what the studios considered too small a sum for content. Lawsuits were filed, they made up, and we got a window. But it wasn’t big enough for Warner, which in January announced a 56-day window (widened from 28) for rental companies such as Netflix and Redbox. Netflix agreed, as it continued its laser focus on streaming content from a vast library of (albeit older) licensed TV shows and movies.
But Redbox said (to quote a popular film), “Bring it on.”
And here we stand: Once again in a window war. But this time, Redbox is definitely bigger and probably wiser. According to The NPD Group, the kiosk vendor’s share of the disc rental business rose from 25% in 2010 to 37% in 2011. Meanwhile, Blockbuster’s and Netflix’s share of the disc rental business receded. Just this month, Blockbuster parent Dish Network announced it was closing more of the chain’s stores than originally planned.
Redbox says it will work around the window by obtaining its discs through “alternative means,” according to an executive. Even so, with more than a third of the rental market, and as the only disc rental business in my town, I believe consumers will wait in that queue to get their second or third choice, if No. 1 is unavailable.