Kiosks Could Take 30% of U.S. DVD Rentals in 2010

Video rental kiosks like Coinstar’s (CSTR) Redbox unit will take close to 30% of the U.S. DVD rental market in 2010, according to market research firm NPD Group. Through the first half of 2009, kiosks had 19% share, versus 36% for Netflix (NFLX) and other subscription services and 45% for Blockbuster (BBI) and other retail stores.

NPD contends that in the coming months both subscription services and traditional retailers “will experience even more competition from kiosks, which are becoming ubiquitous in grocery stores, mass merchandisers and quick-serve restaurants.”

Russ Crupnick, VP for industry analyst at NPD, said in a statement that “consumers are obviously responding positively to the perceived value of $1 per day rentals, and they appreciate the convenience offered by video rental kiosks.”

Ye gads: That suggests Redbox rentals are rapidly approaching Netflix in scale. No wonder some of the film studios are freaking out: $1-a-day rentals go a long way toward erasing the appeal of DVD purchases.

Original post

Comments

[Tony Petroski:]

Entrepreneurs: Is there any reason you can't set up a kiosk outside of a McDonald's?

Aug 26 11:11 AM

[User 230169:]

Redbox is already inside McDonalds


On Aug 26 11:11 AM Tony Petroski wrote:

> Entrepreneurs: Is there any reason you can't set up a kiosk outside
> of a McDonald's?

Aug 26 01:43 PM

[vacplan:]

I believe that once it has it distribution system full in place, coin star will increase rental prices to satisfy movie studio's need for a fair profit. I don't see why redbox couldn't charge $2 for new releases and then scale down to $1 as the movie ages in DVD release. I think blockbuster stores are on the way out because they represent a just too expensive distribution system.

Aug 26 06:34 PM

[User 476606:]

I believe Blockbuster stated on their last conference call that they would have 10,000 Kiosks in place by the end of the 4th quarter? I am going to try and find that call online.

Aug 27 06:08 PM

[Tomcat101:]

Anybody know how much Blockbuster is going to charge for their kiosks? Because if it's more than $1, they might as well not waste their time setting the things up. More than $1 would just be one more gigantic failure to add to the long list of screw ups.

Why not just charge $1 per day at their stores too? No late fee, just keep the movie as long as you want for $1 each day. I drive right by a Blockbuster on the way home from work. I'd be in there a lot for $1 per day.

Sep 05 11:18 AM

[G-Rab:]

On the McDonalds point, here's from Wikipedia: Redbox Automated Retail LLC was initially funded by McDonald's Ventures, LLC, a wholly owned subsidiary of McDonald’s Corp., in which McDonald's owned 47 percent of the company with another 47 percent of redbox owned by Coinstar.[3] In February 2009, Redbox was purchased for $175 million by Coinstar.

I believe McDonalds likes video kiosks as a way to drive more customers to its stores - this is really a great deal for both companies.

Sep 26 01:41 AM