Redbox Testing New Movie Rental Streaming Service With Customers

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DVD rental company Redbox has started to test a new movie streaming and download service with some of its customers, according to Variety.

Known for its DVD rental kiosks, Redbox has dubbed its latest online service "Redbox Digital", which comes two years after the company shut down Redbox Instant, the ill-fated joint venture with Verizon that officially launched in early 2013.

redboxThe subscription-based service was patently unable to compete with the likes of Netflix, and Redbox has reportedly learned from the experience: it's staying away from subscriptions in order to concentrate on transactional video on demand, according to sources familiar with the company's plans.

An app for the service similar in appearance to Netflix showed up on the App Store last week, allowing trial users to stream or download content from the company's digital catalog. A company spokesmen contacted Variety via email to confirm the news:

We are testing a potential new transactional digital VOD and EST offering, with a small subset of our customers, designed to complement our core kiosk rental business. As we test and learn from our customers, we will make evaluations that determine any future course of action.

The Redbox Digital catalog is said to be dependent on the company's deals with movie studios, meaning some movies could be available at kiosks when they're not available for streaming. However, the digital catalog will have a much larger offering than kiosks, which usually only hold a few hundred titles.

No word was given on pricing, but typical one-off streaming costs are likely work out more expensive than the $1.50 Redbox customers currently pay for physical disc rentals.

Tag: Redbox

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56 months ago

I guess they're comparing with similar digital rentals already offered by iTunes and whatnot. Although I agree they should undercut existing services if they expect to it to survive this time round.

If they can match the prices the kiosks are charging it could be a success just based on convenience alone.
Score: 6 Votes (Like | Disagree)
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56 months ago

It's simple economics that how. There is a premium on convenience. It takes more time and effort to go to a kiosk & then have to return it next day. That diminishes it's value compared to streaming which is "on demand," even at 1am, doesn't have to be returned w/i 24hrs.

Also streaming permits a larger library than a physical RedBox can hold so in many instances streaming is the only way to rent a video which also allows for a higher price.

I don't see where RedBox can compete in this space though unless they undercut Apple and Amazon. I'm unsure the movie companies will allow it unless maybe RedBox only gets titles 30 or 60 days after Apple and Amazon.

I think this is where supply and demand doesn't quite fit the digital economy. It's done simply to maximize profit. And technically the supply is greater with digital streaming, therefore if demand remains the same, cost should actually go down.

Convenience should have nothing to do with it. Digital is all about convenience, it's inherent. By your logic, everything digital should cost more. That's not the future I was promised. Otherwise we'd just be adding layers of luxury, not actually improving anything.
Score: 3 Votes (Like | Disagree)
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56 months ago
How can streaming be MORE expensive than physical media rentals?
Score: 2 Votes (Like | Disagree)
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56 months ago

How can streaming be MORE expensive than physical media rentals?

I guess they're comparing with similar digital rentals already offered by iTunes and whatnot. Although I agree they should undercut existing services if they expect to it to survive this time round.
Score: 2 Votes (Like | Disagree)
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56 months ago
Seeing people lined up at the local Redbox always feels like a statement on the US socioeconomic chasm...
Score: 2 Votes (Like | Disagree)
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56 months ago

How can streaming be MORE expensive than physical media rentals?

I think that with physical media, Redbox counts on you losing the disk or forgetting to return it quickly enough.

So though they advertise prices as low as $1-2, they're counting on the fact that, on average, someone will have the disk for say, 2.5 days, so actually, on average they're making $2.50-$5 per rental.

I wonder if they could have the same kind of model with a streaming service, where you have to explicitly press a "return" button somewhere on the website, and they don't offer any reminders that that button has to be pressed after the movie is watched.

It'd seem sleazy and apparent that the're counting on users forgetting to hit that button, but they've always been counting on users forgetting to return the disk, so this is no different morally... it's just a bit more transparent that that's how they subsidize the service for people who actually remember.
Score: 2 Votes (Like | Disagree)

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