If we owned a Blockbuster franchise, we'd seriously think about just renting out the space to a bunch of Redbox kiosks. Blockbuster reported a 42% drop in revenue for the first quarter of 2009, which CEO Jim Keyes blamed on people going out to watch movies at theaters instead. Regarding the Redbox threat, Keyes said they hope to have 3,000 kiosks functioning by the end of the year. Redbox, on the other hand, has about 12,000. [Reuters]
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Chris, you may be onto something here. Can you determine with your excellent journalistic sleuthing skills what costs are associated with placing a Redbox kiosk? I see on their website an inquiry form for businesses that are interested, but I don't (yet) have a retail location. Maybe I should make some info up and see what they say.
I'm curious as to the business model - Does the retail location pay for the privilege of having the kiosk on their floor, or does Redbox pay rent on the square footage? Is there a profit-sharing mechanism based on rental volume? I'd love to do the math and see how many kiosks per square foot you'd need to show a profit.
/me wrings hands in glee and starts up "Business Plan 101"
What the hell is a "Blockbuster"? Is that what primitive man used to use before the magical red Netflix envelopes came?
God love those magical red Netflix envelopes.
Srsly the Raley's down the street has TWO Redbox kiosks. Would be an interesting sight to see rows of Redbox in a single building.
I noticed a Redbox kiosk outside of Walgreens store today. 24-7 movies, blockbuster can't beat that. I suppose the ones in the 24 hour grocery stores are technically 24-7 too but this was the first one I have seen outside. When do they start showing up at train stations?
How can Blockbuster blame movie theaters? Aren't movie theaters struggling too?
Redbox's selection sucks, but you can't beat $1 vs $5 or whatever Blockbuster charges now. Redbox is already in Walmart and McDonalds, the largest retailer and restaurant in the world. Where is BB going to place their kiosks? Doctor's waiting rooms? High school cafeterias? Maybe next to that long line at the DMV?
@I_have_something_to_say: I'm one of them... I'm with Blockbuster Online, and it's nice to take my coupons (or my already viewed disc), go in, and pick something that matches my current mood.
Though, admittedly, I'm not exactly a prime profit margin, as I don't tend to buy things while there.
Redbox will do well because it offers only the latest and hottest. You're doomed, of course, if you want something that isn't the latest and hottest.
I last set foot in a Blockbuster in 1999. I last set foot in a Hollywood Video in 2007. I last visited a RedBox kiosk on Monday. Nuff said? Yeah.
And out of date titles? Ask me for a demonoid invite.
When will Redbox launch a kiosk in every major airport in the US? That would be absolutely amazing.
Redbox works for new releases. Netflix works for everything else. There are no substitutes.
VOD / HD PPV killed blockbuster and now dish and direct tv have 1080p PPV as well.
@bohemian:
How can Blockbuster blame movie theaters? Aren't movie theaters struggling too?
I was wondering that myself....how can the CEO of Blockbuster claim that theaters are taking all the business? Last I checked, it cost 3X more to go see a movie in the theater than renting one for home viewing. Has the recession not trickled down to the movie-going elite of America?
@Joeb5: I don't buy pay per view. Their prices are just as bad as Blockbusters as far as I'm concerned, especially in HD. Actually they're worse now that the Blockbuster in my area has gone down to $2.00 for a one night rental for new releases SD or HD. They do okay because the only competition they have is the one Redbox in the Save Mart across the street (the next nearest one is eight miles away), which very quickly runs out of the newest ones. But I still won't rent from Blockbuster because of bad history.
If we owned a Blockbuster franchise, we'd seriously think about just renting out the space to a bunch of Redbox kiosks.
Redbox kiosks INSIDE a Blockbuster? My mind: BLOWN.
I've been trying to hang on to my Blockbuster, but their "perks" program did away with the perks - I just get useless coupons that I can't use on Blu-Rays, which is just about all I rent these days.... Netflix, I am on my way soon!
"CEO Jim Keyes blamed on people going out to watch movies at theaters instead"
Seriously dude WTF? that's funny, it takes balls to make such a dumb statement.
You may be right, it does cost the same to go to the movies and renting a DVD from you!
Happy Netflix customer since 95'
@Eldritch:
The Onion News Network has a story about the details of the Blockbuster historical tour, talking about how "renting" used to work before iTunes and Netflix.
People are going to theatres to watch movies instead? How about Netflix + the power of cheap people who go to library to borrow movies?
For those who raise the Netflix banner high, you do realize that when Blockbuster does bite the dust, Netflix prices will rise, right? Before Blockbuster Online came along, Netflix was running me about 22 bucks. They dropped their prices because of competition. When that goes away...prices, and profits, will rise again.
Redbox is nice until you have to stand in a line of six people and wait while they try to figure out how to use the machine... type in the wrong zipcode or e-mail address. Or chose a movie and pay, then choose another movie and pay...
Still beats Blockbuster though!
@Eldritch: No, no. It's like a place with pre-downloaded and burned torrents that you had to drive to and pay for. They do throw in the optical media though, but it's already recorded onto.
@Trick: You can always pipe in and tell them they can add multiple movies to their cart and pay for them together...
@albear: So in other words, movie theaters are killing the home rental business?
I'm...at a loss here.
@bohemian: I still think the CEO is whack, but he might be thinking this: as people cut costs they still want to go out but are not willing to spend as much money. So instead of spending let's say $50 on a date night at a restaurant, etc. they go to the movie and get a box of popcorn for $25. Now people 1) have already seen their movie for the week and don't want to rent one or 2) feel like going out to the movies is special for them and don't want to take away from that by renting something.
A similar thing happened w/ my wedding. It is a destination wedding in the mountains that is relatively cheap for people to attend. Initially, before the economy tanked, a fair number of people said they could not attend. But after everyone lost their money they realized they couldn't take the big vacation they had been planning on, so instead they decided to come to our wedding as their "vacation."
I'm hoping redbox will start vending bluray in all their kiosks. Then I would frequent it more regularly.
@bohemian: What's funny is I believe there was a thread on this site earlier this week about how theatres are blaming their shitty profits on the fact that fewer people are going to theatres and more people are renting.
I'm sad to learn that there are still people renting from Blockbuster. I'm surprised they've hung on this long.