Redbox To Launch Streaming, Utilizes Digital Marketing


Bargain DVD rental system Redbox continued to offer few details, while reiterating last week it would follow Netflix by attempting to launch an online streaming service in 2011. Separately, the CEO of parent Coinstar said it is exploring offering video games in its kiosks nationwide, an expansion on a current test.

The company continued to be unclear on streaming as it searches for partners, but suggested its reach -- 30,000 kiosks and brand recognition -- should help with an online complement. Partners would likely come from the technological and content front.

"A top priority for the company," is how CEO Paul Davis described it on an investor call.

For online streaming, Redbox could go with a Netflix subscription program or charge per rental.

Redbox, which rents recently released films and not TV series, has emphasized digital marketing with an email database it says brings communications with 16.6 million customers a week. It also has benefited from more than 3 million downloads of an iPhone app that allows for reserving films for pick-up at its boxes at retail locations.



In 2010, Coinstar, which also includes a coin redemption business, spent $23.8 million in marketing -- up from $15.5 million the year before.

The video game test is in 5,000 kiosks in select areas. Davis said that with the cost of games being significant, consumers are warming to the opportunity to use Redbox as a testing ground. He said it's "a potentially significant growth opportunity" for Coinstar.

Movies cost $1 a night to rent, and video games go for double that amount.

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