Redbox: Instant Failure

In 2007, Redbox passed Blockbuster in terms of number of locations. It took them five years to steal the rental market with utterly disruptive $0.99/day rentals.

This week, they limped on to the Xbox with absolutely nothing new to offer beyond a desperate Me Too! strategy. Redbox, what happened to you?!

Redbox Instant offers the convenience of renting movies from your couch rather than going to one of the 42,000 kiosks. In exchange for that convenience, you might expect to pay a little more than their now dollar-and-change rentals. They could still be disruptive to the streaming rental market if they charged $2/movie. But they don’t. They don’t charge a bit more than a physical rental. They don’t charge twice as much. At $4/movie, it’s more like three-and-a-half times their $1.20 physical rental price.

Redbox now costs as much as Walmart’s VUDU service -- a service that is supported on far more devices, beat Redbox Instant to market by years and offers the option to convert your otherwise largely useless Ultraviolet codes into owned movies on its service.

They also now cost about the same as Amazon Prime's rentals. Except Amazon also plays on far more devices and you get their great streaming library for free if you're an Amazon Prime subscriber.

When it comes to rentals, Redbox has changed from disruptive market leaders to the dullard chasing along, offering a poorer version of the same services, years too late, for just as much money. Why would anyone use them?

Redbox Instant also offers a monthly subscription. Except, again, they are offering a just-as-expensive version of what’s already on far more devices and beat them to market by years.

Netflix On Demand costs $8/month. Redbox Instant costs $8/month. Initial content looks pretty similar on both. Why bother going to the hassle of changing from the service you’re already subscribed to and likely runs on your TV, blu-ray player, PS3, PC, iPad, etc., just to get the same thing that only works on the PC (and only by invite at the moment) and on Xbox if you pay for Gold membership?

Amazon also offers streaming. Their streaming is free if you already have a Prime account. If you don't have Prime, $70/year equates to $5.83/month, undercutting Redbox by nearly 30%. In exchange, you again get a far wider range of devices and Amazon’s determination to actually offer some good movies as part of their unlimited streaming package.

So what does Redbox Instant bring us? They have tossed out their one single disruptive feature -- their great price. They now cost just as much as better-supported services, with better features, available on a better range of devices, which beat them to market by years.

Redbox, you were supposed to be disruptive market leaders. What happened to you?!


1 comment about "Redbox: Instant Failure".
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  1. Hart Weichselbaum from the planning practice, March 27, 2013 at 1:13 p.m.

    What happened? Those pesky licensing deals, that's what happened.

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