Just like video killed the radio star, kiosks like Redbox could be spell doom for brick-and-mortar video rental stores. Consider this: for the first time ever, DVD and Blu-ray flicks rented from Redbox and other standalone kiosks claim a larger share of the market than retail store rentals, according to NPD Group.
"The rental landscape for DVDs and BDs continues to shift, and consumers are obviously responding positively to the perceived value and convenience of kiosks," said Russ Crupnick, entertainment industry analyst for NPD. "Traditional video retailers will no doubt experience even more competition in the coming year, as kiosks appear more frequently in grocery store chains, mass merchandisers, and quick-serve restaurants, and as competition intensifies from an assortment of on-demand rental offerings."
NPD says kiosks increased its share by 10 percentage points from the third quarter of 2009 to the same period in 2010. Kiosks now account for 31 percent of all rentals, ahead of retail stores at 27 percent and trailing Netflix and other subscription services at 41 percent.
Blockbuster is trying to make the most out of its 28-day head start against the competition on new movies. To drive that point home, the rental chain is launching a new ad campaign that promotes "Less Waiting. More Watching." Fair enough, but would you pay more for that convenience?
Blockbuster's about to find out. According to an AP report, Blockbuster Express kiosks will test the market with new DVDs priced at $2.99 and Blu-rays at $3.99 for the first night (each additional night will cost a buck).
"If I want to watch that specific movie, for a couple bucks more it's worth it," said Justin Hotard, vice president of NCR Entertainment. "It gives me the choice to make it the movie night I want to make it."
NCR began charging the new fee for Inception and Knight and Day at some 900 kiosks in San Francisco, Phoenix, Miami, and Atlanta. The test will continue next week with the release of A-Team, and then Wall Street: Money Never Sleeps a week after.
Those Redbox kiosks you see scattered all over the place are proving immensely popular, as evidenced by Redbox recently serving up its one billionth movie rental. It took six years for Redbox to reach the billion rental milestone.
"One billion rentals is an incredible milestone as Redbox has quickly become the local video store for millions of consumers nationwide," said Mitch Lowe, president, Redbox. "Our popularity is a testament to our customers' loyalty and our steadfast commitment to making movie rentals affordable and convenient for our consumers."
To celebrate the occasion, Redbox is giving its renters a free one-night movie rental throughout the month of September. All they have to do is enter their unique DVD code found on their Redbox rental at redbox.com/thanks to get the promo code.
There are now over 24,000 Redbox kiosks in the U.S. serving up more than 9.5 million rentals a week, including Blu-ray titles,.
Swing by your local grocery store and you'll likely run into a Redbox kiosk serving up DVD rentals at $1/night. That's not a bad deal, especially if you don't watch enough movies to justify a Netflix account, but would you be willing to pay more than a buck?
Redbox aims to find out and has begun expanding its tests of higher priced DVD rentals in five markets. These include Albuquerque, New Mexico ($1.50), Modesto, California ($1.25), San Diego, California ($1.25), Spokane, Washington ($1.15), and Miami/West Palm Beach, Florida ($1.15).
Redbox is going up against Blockbuster Express in the DVD kiosk market. Earlier this week, Blockbuster Express announced the addition of 500 sites, bringing the total number of kiosks to around 7,000, still well behind Redbox's more than 22,000 kiosks.
If you thought that Redbox would charge a premium for Blu-ray rentals, you were right, but it still might be less than what you were anticipating. That is, unless you were anticipating $1.49. In that case, go ahead and shake an angry fist at Redbox for gouging you for a penny more than you were prepared for.
While nothing is written in stone just yet, Redbox president Mitch Lowe says that his kiosks will in all likelihood rent out Blu-ray flicks for $1.50 per night, which is just 50 cents more than the $1 fee for regular DVDs. You can expect Redbox to start stocking its kiosks with Blu-ray titles within the next few months, Lowe added.
According to Lowe, nearly 17 percent of Redbox customers own a Blu-ray player. By adding Blu-rays to the mix, Lowe says Redbox's 23 percent share of the market could help drive Blu-ray adoption, especially with consumer awareness of Redbox checking at 72 percent in April, compared to just 17 percent in February 2009.
Blockbuster will soon begin renting movies on SD cards. You will need to visit your nearest Blockbuster Express Digital kiosk to rent your favorite movies. There, users will be able to transfer DRM-protected movies to their own SD cards. According to a Fast Company report, the rentals will cost $1.99.
All said, hardware incompatibility may prove to be a major issue as not all phones, TV sets and notebooks feature a full-size SD cardslot. The kiosks will be built and managed by NCR Corporation, the very company that manages Blockbuster’s DVD-rental kiosks.