Redbox: Disruptive Innovation in DVD Rentals

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:


Case Code : BSTR359 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges


Innovation / Business Models / Differentiation / Pricing Strategy
Case Length : 14 Pages
Period : 2002-2009
Pub Date : 2010
Teaching Note : Not Available
Organization : Redbox Automated Retail / Redbox Automated LLC
Industry : DVD Rentals / Entertainment
Countries : USA


The case deals with the disruptive impact of Redbox Automated Retail, LLC (Redbox) - a company that offered DVDs for rent at a low rate of US$ 1/day through kiosks - on the US (DVD rental industry. It begins by describing the company's inception, and how it managed to grow rapidly over the years. The case also details some of the important features of Redbox's business model, including the use of patented technology to enhance customer experience. It then discusses some of the problems the company is facing, including its legal disputes with some of the leading movie studios. Finally, the case presents an overview of the competitive scenario in the DVD rental industry, and the company's future prospects.


Understand the disruptive effects of an innovative service on mature markets.
Appreciate the use of technology in improving the customer experience.
Evaluate the different business models in the DVD rental industry.


  Page No.
Introduction 1
Background Note 2
The Redbox Experience 3
Problems with Movie Studios 5
Competition 8
Outlook 10
Exhibits 11


Redbox, DVD Rentals, Movie industry, DVD kiosks, Video rentals, First sale, Business models, Movie distribution, Innovation

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