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The Last Redbox? A Brief History of the Company and its Potential to Survive.

by Paul Deeter



The recent release The Last Blockbuster is a rewarding nostalgia trip for rental addicts, while simultaneously approaching one main question: what's the future of home rental? Well the movie, as fun as it is, does not dive too deep into the transitions that come with physical media to digital content. Instead it tries to use levity and some fun cameos to share wisdom to younger audiences of just how easy we have it now. I myself having grown up as a kid to the Blockbuster craze have my own fair share of memories wandering the halls of rental after rental, until it's unfortunate and quite clear end of the line. Netflix is easy to point fingers at, even with the irony that the platform released The Last Blockbuster for streaming. It's easy to pinpoint Netflix without knowing that Blockbuster had some early offers from competitors for streaming and mailing options. We oft look past some of the price-gouging that came with rentals from Blockbuster too. So Netflix is now basically the king of streaming content. Recent award seasons have show that Netflix, followed by Amazon (closely) is even leading the game in delivering big-screen Oscar caliber releases. What's better than being able to see The Irishman at the theater at the same time as Netflix drops it? Just recently, the numbers are showing that Zack Snyder's Army of the Dead may be the most successful release for Netflix ever. You can practically hear the cash registers closing and opening.


It's interesting to see this rise and rise while forgetting there was another quiet competitor to Blockbuster that actually peaked itself in the early 00's while Netflix was still revving its engines: Redbox. This rental service may be the last icon of true physical rental, outside of Netflix's age-old disc rental option that made it famous in the late 90s. Netflix made disc-rental popular, but it had its caveats before it was truly famed for its streaming content. Redbox meanwhile, had answers. Netflix had the option for renting anywhere between 1-7 discs simultaneously. Basically how it worked was the rental site offered almost unlimited titles of new releases to old-but-gold classics. Here's a site that might prevent a walk into a Blockbuster, because there's no guarantee Blockbuster always has what you're looking for. The caveat was Netflix had limited availability to the amount of copies available per film, and upon release you might be queued a month or two to get a copy of Tenet upon disc-release. Additionally, you have to trade in your movies to get new ones, which made you rely on "snail-mail" and the idea that sometimes the time between sending your movie back to get the replacement could be unbearable. Here's Redbox: pick your rental, anytime. Pick how long you rent it. There are no monthly fees, you walk up to basically a movie ATM for lack of a better term. You rent the newest films (no mail wait-time) and return it when you're done. But get this, you can return these movies to any Redbox.


How baffling it was to me, around high-school age that I could go to one of my best friend's house and on the way over I could pick out a movie or two for a few bucks at any en route Redbox. Sure, you need a credit card, but even Blockbuster had changed to keep tabs on rentals as well. Redbox was everywhere. In fact:


The company surpassed Blockbuster in 2007 in number of U.S. locations, passed 100 million rentals in February 2008, and passed 1 billion rentals in September 2010. Current and former competitors include Netflix, Blockbuster, Movie Gallery and its subsidiary Hollywood Video, West Coast Video and Family Video along with other DVD by mail rental services.



Once unbeatable pricing.

This was when I was in highschool. In 2007 and on for a solid few years, Blockbuster was sweating not just to the early 00's Netflix presence and the idea of early retirement from them, but to these small red-vending machines. There's so much to digest, and it comes down to the simplicity of this LA born idea. Small rectangular vendors with no human labor required. Simple use, big buttons. Access to DVD, Blu-Ray and even videogames (until just recently). The ability to order movies to any Redbox online before driving up to one was another killer feature I often used. There was even a time... growing concern in 2009 that DVD kiosks might jeopardize movie studio income from DVD sales and rentals, [and] three major movie studios, 20th Century Fox, Warner Bros., and Universal Studios, separately refused to sell DVDs to Redbox until at least 28 days after their arrival in stores.


It's quite clear with the success of the popularity and ease of use that Redbox was a threat not just to Blockbuster and even Netflix, but also the idea of making movie-access cheaper. There's been decades of concern about theatres, with 2020 being one of the most significant year, that movie theatres will become obsolete. 2020 and the pandemic led to complete movie theatre shut-down and some desperate attempts to re-open safely. A decade prior, studios were afraid about the idea that people aren't just renting their content, but renting it so cheaply. When a physical release came out for a movie, you could pay maybe MSRP $20 or so for the DVD and probably about $10 to rent it for a weekend. With studio cuts from theater tickets and all that, it's pretty clear there's still return on post-theater sales. Here is a rental service that isn't just dropping content at the same time as the item is available for purchase, it's offering the rental for a fraction of the cost. I think when I was usually perusing the boxes, the prices for rental started around $.99 cents and maybe went up to $2-3 dollars per night. Nothing to spit at, certainly something cheaper than Blockbuster, but debatable when compared to Netflix, which was a subscription service. All this of course, is years prior to the craze of streaming.


Which, like the groundbreaking offer of mail-based film subscriptions, was pioneered by the big red N. Netflix used an early Internet option of movie access that was significantly more attractive than waiting by a mailbox for a copy of Mad Max after days before dropping off some old B-movie you've long forgotten... when it started to offer streaming content for free to its subscribers in 2007, it could offer no more than about 1000 movies and TV shows, just 1% compared to its more than 100,000 different DVD titles. Yet as the popularity kept growing, the number of titles available for streaming was increasing as well and had reached 12,000 movies and shows in June 2009. The availability was the key factor in favoring Netflix "watch instantly" platform over dropping by a Redbox or worse a Blockbuster for a new release. But the issue was the same as that of a senior citizen in the retirement home in an episode of The Simpsons, who stares at a TV blankly and says "tons of channels, but nothing to watch". The issue of movie rentals at big chains to cheaper subscription services is not as applicable as the move from cable to online channel support. Again one could question the inevitability of the switch away from cable, due to its extreme pricing in competition with services like Netflix, or now Hulu and Amazon Prime to name a few (more on that later). But Netflix and it's online offering of titles simply had no candle to shine against the Netflix mail service, until they got smart.


Robin Wright (House of Cards)

So from my perspective, getting Netflix in the mail, and getting Redbox at the box had still lacked a "need-it-now" desire to simply sit at home and turn on the tube and watch what I wanted, when. Netflix meandered on demand for a bit, but when they started their own original content early on including shows like House of Cards a big David Fincher project with the now shamed Kevin Spacey as lead, they were cooking with gas. There simply needed to be more content allotted for people to jump on board, and when most of the movies and then on top of that new content showed up on their demand service, people left the snail-mail option behind. What's more they dropped most of their physical subscription audience in exchange for online demand subscribers, but that wasn't all. They changed the whole playing field. So we're still seeing Redbox spike and slowly but surely, Blockbuster failing, but we also are seeing a trend of people dropping interest in physical media altogether. There's a whole crowd today that will argue about physical media vs. digital content, but the masses were falling in favor of digital rentals. Not everyone would buy a film digitally, or download media permanently, but the rental side would see a boom with digital customers. Hulu showed up shortly after (2010) and Amazon, which so heavily benefitted on the "have-it-now" factor of shipping anything an everything to customers. Amazon Prime Video would show up in 2016 officially, but hit off so successfully due to its consumer base already belonging to the Prime subscription offer of free 2-Day shipping. Everything was launching fast and successfully. So where was Redbox?

Well in 2012, Redbox attempted a merger with Verizon and launched Redbox Instant, which a streaming service with a small launch of under 5,000 titles and offer for 4 rentals a month. Admirably priced, but the films available had no real appeal, and after some controversy over illegal use to steal new content, the service was axed 19 months later.


It wouldn't be until 2017 that Redbox, under a shift in management, launched its Redbox on Demand service. Why? Well Redbox Instant wasn't cutting it, but it had been a few years since that venture. Then, the physical rental of films, even the idea of day-one rentals for disc releases, wasn't enough to keep the amount of Redbox units available. We were looking at a boom by 2012 of over 42,000 kiosks at more than 34,000 locations. There was no denying its over-looming presence, like a Starbucks on every corner in a metropolitan city. These red altars for film-lovers were everywhere. This saw a couple year decline in popularity until 2017 the demand service was launched. Was this out of desperation? It almost feels like the company needed new branding and a change in CEO in 2016 to come to its senses that time was indeed running its clock on Redbox. So many strange things happened. Just like Blockbuster did at the end of its life span, Redbox has started getting antsy, and trying new things that may or may not stick. In the end Blockbuster was literally putting out little kiosks of their own, but they also adopted rental subscription services, loyalty perks and other ways to shake off the dust. Well now Redbox+ exists. It's an annual membership that allows its users to rent up to 24 discs in a year based on the membership plan with extended return times. First of all, this is a limited plan. Netflix and even Blockbuster briefly put unlimited access to their libraries. So what's the idea of a bulk-rental plan, if not a doomed-disc version of MoviePass? MoviePass is the subscription that accesses its users (in theory) to watch unlimited films at the theater for a small monthly charge. It ruffled more than a few feathers. I won't go into the reason MoviePass failed, but there's a great article here if you're interested to dive deep into its history.


Oof.

Outside of Redbox+ and Redbox on Demand, the company has even sought after it's own presence as a studio. It's started to back original film releases, with the idea being that these films will draw non-Netflix users to the service for unique content. This started in 2019, with only a few titles to show for it. And Netflix spent years making a name for itself as a studio. Now Amazon Prime is releasing big movies, and Hulu has its own original series among other streaming services. These changes didn't happen overnight. It seems like Redbox is swinging for the fences here, trying its hand at a few different concepts at once. Will Redbox+ turn a profit? Or is there a chance for some great fresh Redbox series or film? As of last December, Redbox has chosen to make its online streaming service free, in a large move for subscribers. I perused an article on this news, and out of curiosity checked out some of the comments concerning the news and whether or not people were on board for a Redbox comeback. Most of the comments were trollish, some argued Redbox was nailing its own box shut, while others made it clear that there are far better options to watching free content. And it's true. But I suppose there in lies the bigger issues. Are there too many options?


While Redbox huffed and puffed its way into demand servicing, as I mentioned before, the shift from cable TV and multi-channel use was changing for online services. Cable companies were price-gouging its customers, and even more desperately as they started to see the greener grass of Netflix and Hulu. I remember my time at Best Buy was largely filled with conversations with older customers who lamented the problems of various cable companies and wanted the smart features of new TVs or their computers. Amazon Fire Sticks and Roku sticks changed the game, with a low retail cost these plug-ins would allow access to any of these channels on any older TV model. So it seems now that TV manufacturers are set on implementing these devices into new lower priced models, and the big name models are filled to the brim with their own smart features. I don't have cable. But I do share an issue with others. I started paying for Netflix, no big deal. Then Amazon Prime and Hulu, gotta get The Handmaid's Tale. But wait, now I'm paying for Disney Plus and Shudder too, and they keep popping up. Unlike Redbox using a free streaming service, these costs are adding up. And people are started to complain, again. These same services ask that household's limit their account users. But why not let your friends and family share that Disney Plus password to save them a bill?


Maybe, Redbox has an opening. If they choose to commit to an only service for in-demand movies and make it free, they're finally crossing over into the territory of change again. Redbox hit the market with an unbelievable amount of ingenuity and accessibility in the early 2000s. They're not gone yet, but the numbers aren't good. I can only imagine the folks on top scratching their heads, and trying to prevent their own documentary on the misguided history of the company. But Redbox hasn't had the lifespan of Blockbuster. It hasn't seen the wide success of Netflix. It just cornered its way into the market of changing media rental that existed in the transition of those entities. Are they worth a 90-minute film of nostalgia?


Is it over?

Here's the thing: I'm rooting for Redbox. There is a market out there for them. Streaming is a crowded outlet, but free-streaming options along with early-access to rentals and original media might just heat things up again. Redbox could be on the precipice of the next big House of Cards. I know people are still renting movies. It's become easier and quicker to rent new releases like Nobody and Minari, which were not tied to streaming availability. Redbox needs to work into the market of early-access film rentals. It needs one good merger. So if you haven't ever been to a Redbox, consider dropping by one. It won't break the bank. Maybe give Redbox on Demand a shot. Nobody rooted for Blockbuster to fail, its changing time was just inevitable. Maybe Redbox can find its win. In the world of home-video access, Redbox can still find its footholes. Let's just hope they do, before another big company beats them to it.



https://en.wikipedia.org/wiki/Redbox

https://en.wikipedia.org/wiki/Netflix

https://en.wikipedia.org/wiki/Blockbuster_LLC

https://www.theverge.com/2019/9/19/20872984/moviepass-shutdown-subscription-movies-helios-matheson-ted-farnsworth-explainer

https://deadline.com/2020/12/redbox-launches-free-on-demand-streaming-avod-1234652148/#comments


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