The Subtle Advantages of Redbox’s DVD Kisoks

October 25th, 2006 Davis Posted in DVDs, Kiosks, Disclosure - I own stock in co. mentioned, Netflix, Uncategorized |

About 6 months ago, Byrus from the Daily Gadget, wrote a brief review of Redbox’s DVD rental machines in Colorado. Since that time, Redbox has made two major enhancements to their DVD rental program, so he went back and wrote an excellent update on his experience using the Redbox DVD machines. Over the last 9 months we’ve seen Redbox upgrade their older DVD vending machines from a capacity of 100 discs to 500 discs and we’ve seen them add support for online reservations. The combination of both of these enhancements has created a subtle advantage that kiosks have over Blockbuster and Netflix.

“Because you can rent and return anywhere, and you can rent online from any box this is a great service for travelers. You can rent a DVD on the way to the airport, watch it on the plane and return it when you land (if you are going somewhere that has a RedBox) just make sure you look up a location at the other end of the trip. Another option is to do the same during a road trip. You can even rent a new one at your next stop online. Try that with NetFlix or Blockbuster.”

Part of why I think Redbox has been so successful has been because they’ve been targeting communities one at a time, instead of trying to immedietely go national with their service. As their business expands, we’ll see Redbox spread to other cities, but by saturating a local market, they give their customers more rental options instead of just targeting a single location. This enables the company to offer more titles because they can put different new releases at different locations. It also makes it easier for customers to return their discs if they live or work near several different kiosks.

In reading through the review, I found it interesting to learn that Redbox has started renting television shows along with the new release movies that they are known for. While it’s entirely possible that they may have been offering television shows all along, at a cost of $1 per DVD and with most DVDs having four shows, you can go through an entire season of TV for only $6, if you are efficient in watching your rentals. This is a considerable cost savings over traditional video stores and iTunes, in addition to offering a significant time advantage over DVD by mail. While not everyone will want to binge on massive amounts of TV at once, I know that I enjoy watching a season of television from end to end vs. having to deal with cliff hangers all year long. One of my favorite things about Netflix has been my ability to go back and discover old television shows for the first time and while renting an entire season in one week sounds intense, I’ve always had a secret fantasy to try and relive an entire season of 24 over an actual 24 hour period.

I don’t believe that Redbox is going to replace the longtail experience that Netflix offers, but I do think that there are consumers, like Byrus, who appreciate the flexibility and value that a kiosk experience provides. My dream DVD experience would be to see Redbox combine the convenience of a DVD kiosk with an online DVD by mail subscription. Such a combination would give me the ability to have an all you can watch experience, but to also still have access to the longtail content that I crave. While, to date there have not been a lot of consumer reviews on Redbox, I have a feeling that as we see more and more locations deployed nationally, that we’ll see more positive experiences like the one that Byrus describes.