Redbox Adding 1,500 Kiosks Because People Still Want To Rent DVDs

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Between disappearing rental kiosks and attempts to break into the streaming market, one might get the impression that Redbox was ready to leave physical video rentals behind — but that’s not the case: The video rental company is preparing to add 1,500 kiosks to its roster.

The Chicago Tribune reports that Redbox, under new management since Apollo Global purchased the struggling company for $1.6 billion in July 2016, is refocusing its efforts on its long-standing and traditional customer base, those who actually rent physical DVDs and video games.

CEO Galen Smith, who took over the top stop at the company in September, tells the Tribune in an interview that the company sees a “real opportunity” to reach more customers by expanding its kiosks, a plan that comes less than a year after the company eliminated about 1,000 kiosks from rotation.

“Our focus is really on driving profitability and cash flow, and to do so, we want to install more locations,” Smith said.

In order to realize that profitability, the company says it is focusing on placing the kiosks in places where customers already are, such as at Walmart locations, drug stores, and dollar stores. One market the company could consider expanding is Alaska, where Blockbuster seems to be doing well.  

As for the customers Redbox is courting, Smith notes that traditional renters are those likely to be families who want new content at a low price, video game lovers, and even millennials.

“Millennials see us as a great access point to watching new release movies,” Smith said, adding that at $1.50 per night Redbox rentals might be more affordable for younger customers who don’t want to spend $5 or $6 for an on-demand rental. “Contrary to what people think, we actually skew a lot younger in terms of our age makeup.”

As for Redbox’s attempts to break into the streaming market, Smith says the company continues to look for ways to serve customers in this matter.

“So we continue to look at opportunities to be able to serve it both physically and digitally,” he said. “It could be something down the road that we offer if it helps to satisfy consumer demand.”

Back in 2014, the company declared its Redbox Instant Streaming service dead. Last year, he company began testing a new streaming service, Redbox Digital, with a select group of current users.

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