Ok here we go again with Redbox. Can Redbox Compete Against Apple and Google? After failing miserably to make a space for itself in a field that included Netflix, Amazon Video and Hulu Redbox now plans to take on transactional giants like iTunes, Google Play and once again Amazon. Also in the space are Vudu and Cinema Now. We won’t even bother to recall every single service that tried to get into the on-demand streaming space and also failed but we feel we should mention Target Ticket because it failed, even though it was a service backed with a highly recognizable brand and retail arm.
Redbox has released precious few details about how its service would work if it deems the limited test a success. But unless it is willing to offer something revolutionary the chances that it will stand out are small. A Redbox spokesperson told Variety’s Janko Roettgers via email that the service would complement its existing kiosk service. There is something about the term complement that tells me that the service will not be robust.
Why launch a streaming option at this point? Redbox parent company Outerwall may not be making as much money as it would like. There was an 11% drop in net revenue for the company which also maintains the popular coin exchange machines we all see at grocery stores. It may not be a rousing success but if the service ends up helping ballance the books it does not need to rise to the top of the heep.
Redbox would do good to package streaming with other credits that it offers. My family uses the Redbox Kiosks regularly. Like a lot of folks in this country Friday is Frozen pizza and movie night for my wife and daughter. And often that movie comes from Redbox, especially when there is a long-awaited new release. Every few weeks we get credits towards rentals or get a pop up like get a second movie half off etc. If Redbox were to use such loyalty points towards streaming purchases it could actually prove quite succsesful. The market for on-demand movie purchases in home seems to be set at about $5.00 vs the $l.50-$2.00 prices that Redbox kiosk customers pay. But lets say Redbox allows people to take 2 dollars off a digital rental lowering the cost of the rental to 2.50 with the convieniance of staying home. That could be a big winner in housholds like mine. I think it would be a big winner overall especially for people who already use the kiosks.
See Outerwall first quarter earnings report here.