Redbox Kiosks Crank Out Cheap DVD Rentals, Doom For Hollywood

With its ubiquitous DVD rental kiosks, Redbox has been known to toy with our emotions. The machines have taken up all the choice grocery store spots where your favorite stale gumball machines used to sit. And company execs taunted us by dreaming up that awesome Free Movie Mondays promotion only to vow to take it away by the end of the summer.

But the most heinous act of Redbox — other than subjecting witless viewers to Bride Wars — is destroying the very fabric of the movie industry. Take it away, L.A. Times:

The discount DVD rental business worries Hollywood movie studios because of fears that it is undercutting DVD sales, which dropped 13% in the fourth quarter and were projected to fall at least 6% more in the first quarter, according to analysts.

DVD sales historically have been how the studios earn a profit on movies, because ticket sales are barely enough to offset production and marketing costs. Some studios believe that consumers will forgo buying DVDs if they have a cheap option to rent movies.

“You could make a bit of an argument that rental is cannibalizing [DVD purchases] in 2008, especially in a recession year, where everyone is watching their nickels,” said Tom Adams, a video industry analyst.

The logic goes that people pay $1 to rent Bride Wars rather than $16 to buy the DVD. The studio fails, the sequel Bride Wars 2: Electric Boogaloo doesn’t get made, and Anne Hathaway is a homeless bag lady. And then when Hathaway wants to see a Keanu Reeves movie, all she can afford is to rent it for $1 from Redbox, thus leading to Reeves’ homelessness. And the cycle continues, with more homeless actors spending too little to rent more and more movies, systematically making their colleagues homeless until all that’s left are Harry Potter movies. And no one wants that.

Oh well, even though Redbox threatens to undermine the very stability of mankind’s ability to sustain an entertainment industry, at least we can count on Redbox not to allow our credit card info to be skimmed.

Redbox’s $1 vending-machine video rentals worry movie studios [Los Angeles Times]

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