Redbox: Getting Ahead of the Curve

Redbox is a DVD/Blu-Ray rental company which utilizes kiosk machines placed in convenient, high-traffic locations. The first Redbox kiosk was opened by McDonald’s in 2002. Redbox was later purchased by Coinstar, Inc., and over the years, Redbox has rented over one billion movies and has grown to more than 27,000 locations in restaurants, grocery stores, pharmacies and convenience stores nationwide. Redbox proves to be a very unique way to rent DVD’s and by the nature of Redbox’s rental process, most businesses would benefit from the increased traffic generated by having a kiosk machine at their location. This type of relationship proves to be a win-win situation for both Redbox and the businesses which
The industry is changing and Redbox will need to seriously consider providing a viable online streaming video service which can rival Netflix. I propose Redbox should cease all efforts in providing any more kiosk machines so they may focus most of their resources to providing the consumers with what they want, online streaming video. Netflix has already got a head start, but even they will not be an exclusive online service for a few more years. So, Redbox must follow the money if they plan to be in business in the next five years. On the other hand, Redbox also has a golden opportunity to gain a large market share in the gaming industry. Redbox needs to become the first and only company to offer video game rentals through vending machines. Redbox is poised to achieve this goal with little to no effort and with their only possible competitor in this area being Blockbuster, they are sure to make huge profits from offering this service. Redbox already has the distribution channels in place; all they need to do is make a smooth transition from offering DVD’s in the kiosks to offering games. This should be a tiered transition which coincides with their streaming video efforts. In other words, Redbox cannot simply remove DVD’s from the kiosks and replace them with games immediately. As Redbox begins to provide consumers with a reliable, concrete streaming video service at a competitive price, they can slowly