Movie Studios See a Threat in Growth of Redbox
nytimes.com
nytimes.com
Hate to break it to you bud, but the Internet is not choosy about media types. I promise you that when movie streaming becomes more practical, it will destroy these bulky/expensive kiosks as well as other traditional store chains. The time of DVD is slowly approaching its end.
It's taking so long in Canada to get these new rental means set up, there's little wonder why the RIAA and MPAA are calling Canada a home for piracy. It's the only way to get a movie without paying like $7 to Blockbuster for a half-decent rental time. I've got the choice of constantly running to blockbuster to rent and return a single movie that it's going to end up costing more in gas than to rent the damn thing, because god knows blockbuster never heard of a convenient location.
"The $1 price is not the main issue for the studios, although they do not like that, either; it is the timing. New DVDs sell for about $25. Video-on-demand services price them at about $5. Multiday rentals of new titles cost $4.99 at Blockbuster.
Now there is a $1 option at the same time. That could put downward pressure on the industry’s price structure."
In other words, the $1 price is the main issue.
Not so.
Movies are priced based on how early you get to see it. If you are willing to wait, the price goes down.
Redbox prices them at $1 without making you wait [as much], which moves the entire chain of time/price balances.
It's the price.
It's the price relative to the time. It's not the price alone.
Here, you can buy pirated DVDs on the sidewalks for a dollar (USD). If there were Redboxes here, people would automatically switch from buying pirated DVDs to Redbox.
FYI, I am from the Philippines and pirated DVDs are so rampant here that they sell it publicly outside schools, and in some malls...
It seems like Hollywood prefers that we pirate new releases.
guess what the studios did? they released DVDs, for sale, at about the same price (25 rupees) - not the latest films, but many recent titles.
What the studios don't realize is this - they wont lose anything by reducing the prices because a) piracy will come down b) the sheer volume of sales, will make up for the price reduction.
Indian market is supremely price sensitive, so Indian companies aim for volume. The same can and will work in US too, if only the studios have the common sense to try it.
With Redbox on the other hand, if it is available just around the corner or at least in places with security guards (less likely to be vandalized, etc.), then I'm pretty sure that the ones who sell illegal copies will go out of business in weeks.
This is valid mostly for regional movies. Legit English DVDs of popular movies from western studios are sold for around 600-700 rupees (around 15 dollars), so the market for pirated copies of such movies is pretty large.
One thing that they fail to mention is that part of Red Box's success is due to their expansion. It allows them to shift product that isn't renting well in a particular area to new kiosks. This helps them to: a) pay less for new product in new kiosks and b) not be forced to either trash the existing product to replace it with other titles or let it sit there not earning back any money for them. There are lots of examples of companies built on expansion that ran out of steam... Krispy Kreme for example.
If you really want to collect movies for $300 you can get massive used DVD lots with hundreds of legit movies off ebay for way less hassle.
I can sell used cars, used couch, used books but I can't sell used DVDs?
Music and movie industry has some of the craziest people in business
For example, GameStop sells new xbox & PS3 games for $60, and used for $55. When the consumer buys the used game, the publisher doesn't see any money.
Yes, they're still crazy in general, but this is a legitimate problem when you want to continue selling stuff to customers.
Wi-fi in new iPod models will eventually make this idea obsolete.