Redbox Threatens Netflix in Video-Rental III: Rise of the Vending Machines!
Netflix has long been recognized as the top online video-rental business. Despite competition from perennial business-model imitator Blockbuster, the competition continues to be stymied. But wait – one decidedly low-tech business Redbox, is growing at such a rapid pace it poses a serious threat to Netflix. This relatively new competitor has been quietly laying red vending-machine boxes all over America, over 15,000 by its latest count and its growing fast.
Discuss "Redbox Threatens Netflix in Video-Rental III: Rise of the Vending Machines!" here. Read the article.
I have never and will never use Redbox...for some it works, but for me I'm sticking with my Netflix, 3 DVDs out at a time, keep them as long as I want, I can stream videos on my laptop. I don't like being limited to such a small selection to choose from. Especially having a 5 year old, I can just have her kids flicks scattered here and there in my Netflix queue and she gets a surprise every week.
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Is there a particular sentence or do you mean the article in general? I've never been a fan of long good-byes, maybe it's just editorial style
Oh, I was trying to be a bit ironic with the crack about vinyl. I realize it's popular and has made a comeback. I'm certainly not trying to bring up a debate about that topic but I do find it interesting that older technologies/business models sometimes make comebacks.
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Wayde
Tell me what you think in real time on Twitter @wayder I'm now tweeting Audioholics stories and looking to extend the AV conversation.
Two totally different business models who are targeting two different customer bases. I don't think you'll find much crossover between the two products, which further proves that there is room in business for more than one company to play in a space without threatening each other's livelihood.
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I don't think you'll find much crossover between the two products.
As much as I tried to resist the Redbox I found myself using and hating it. First of all I didn't get the movie back the next day and the day after, I got it back after the specified time of 8 or 9 PM. Then to really make it irritating I end up having to wait in a line littered with rug rats all telling their parents what they want just to prolong the decision making process.
A friend of mine uses Redbox and the $1/movie works for him. I did the quick math on my Netflix cost/movie and came up with ~$2/movie but the titles are all over the place. Redbox could never have offered that and if I was better at getting the viewed Netflix movies out to the mailbox ...
Two totally different business models who are targeting two different customer bases. I don't think you'll find much crossover between the two products, which further proves that there is room in business for more than one company to play in a space without threatening each other's livelihood.
I agree, I don't see Redbox taking away Netflix customers, but maybe delaying people into getting Netflix right away. If you can remember to take back the Redbox DVD's back daily it's probably a good deal, depending on how many DVD's you rent, but there is a point where Netflix's plans will become a money saving option plus added ease of return and streaming. My roommate's girlfriend had netflix so he set up stream to our Xbox which is really nice if you just want to watch a movie out of the blue. I'm really debating getting Netflix in August when I move into my new place.
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My wife likes/uses redbox (insert comment by Alex, Adwilk & Mperfect) and likes the convenience of getting the movie at one location and being able to return it at a different location. We live in the boonies so it is nice to be able to rent/return them in whichever town we are in.
For rentals, the concept of streaming them over the internet makes the most sense to me. Theoretically, an online rental company could offer virtually every movie and TV show ever made and there would be virtually no wait time. But that is in concept and that is theoretically.
As it stands, every rental model has its downsides:
With Netflix, you cannot be 100% guaranteed to get the movie that you want at a particular moment. Your #1 choice in your queue might be unavailable at the time of shipping and so you wind up receiving your #2 choice or some other disc that is further down your list. And, of course, there is the delay as you wait for your discs to arrive in the mail. The upsides are the massive selection (far greater than any brick & mortar store or vending machine) and the subscription model means that you can pay a very low price per disc - provided that you watch and return quickly. While, in a strict sense, there are no late fees, the "late fee" is basically baked into the subscription price.
With RedBox, the clear downside is selection. Only 200 titles and you cannot even be guaranteed that a particular title that you want out of those 200 will always be in the 700 disc stock. Upsides are the price and not having to wait on mail delivery and return. For the casual movie renter - who basically just wants the new releases and wants to be able to grab a quick movie rental whenever it strikes their fancy - RedBox makes a lot of sense! And casual renters are a huge portion of the population. Almost everyone enjoys watching a movie once in a while, but most people are not such regular watchers of movies that they would agree to a monthly subscription.
Between those two models, anyone who would have rented from a brick & mortar rental shop can basically be satisfied. The movie lover who rents a lot gets a lower overall price and a MUCH larger catalogue from Netflix and the casual once-in-a-while renter gets a lower price from RedBox.
Streaming movies over the internet has the potential to offer the best of all worlds, but as of right now, it is only potential. Renting movies via streaming makes little to no sense at all as it exists today, IMO. The catalogue is small - limited by the selection of titles that the studios are willing to provide in streaming format. And the price is outrageously high! Whether it be iTunes, Xbox Live, Playstation Store, Vudu, etc. - any rental streaming service that is offering a la carte, pay per movie style rentals is doing so at prices that are closer to brick & mortar rentals and, in some cases, are even higher!
But online streaming could be amazing. If the studios would open up and allow for basically every movie and TV show ever made to be available online, it would represent the greatest catalogue selection EVER. Streaming could also be made available under BOTH a subscription model AND a pay-per-movie model - satisfying both types of renters. The price can and should come way down to match the price per disc that we already enjoy from Netflix or RedBox.
Finally, there is the issue of quality. If you want 1080p, Blu-ray quality, Netflix and brick & mortar are still you best bets. RedBox might offer a few titles on Blu-ray, but the selection is pitifully small. This is the greatest hurdle for streaming. Microsoft might have promised 1080p streaming on Xbox360, but with a maximum bitrate of 8 Mbps and a high likelihood of lower bitrates much of the time, there is simply no way that streaming 1080p is going to match the quality of Blu-ray. Strictly speaking, the video resolution may be the same, but this is a much more highly compressed version, not to mention a complete lack of lossless audio possibilities.
But if bandwidth can be increased and compression algorithms can get even better, streaming still has the potential to eventually offer quality that is indistinguishable from Blu-ray in both video and audio.
For right now, all of these options serve slightly different markets, but it is interesting to watch as it all develops.
Redbox Threatens Netflix in Video-Rental III: Rise of the Vending Machines!
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