Redbox: Competing in the Movie Rental Market


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Case Details:

Case Code : MKTG261
Case Length : 11 Pages
Period : 2005-2010
Pub Date : 2010
Teaching Note : Not Available
Organization : Redbox
Industry : Service / DVD Rental
Countries : US

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Please note:

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.

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Excerpts

Background Note

The company esRedbox was started in the US by McDonald's Ventures, a wholly-owned subsidiary of McDonald's, a chain of fast food restaurants. Initially, McDonald's started the concept of self service automated kiosks in the Washington region in order to provide its customers with items of daily necessity such as milk, eggs, and convenient snacks such as sandwiches throughout the day (Refer to Exhibit I for a brief note on kiosks)...

The Redbox Experience

"Redbox is firing on all cylinders. They have good hardware and software, good marketing, and good partnerships for their deployment locations," said Rufus Connell, Research Director for Information Technology at Frost & Sullivan, in 2007...

Trouble for Redbox?

Though 2009 was a great year for Redbox with revenues of US$ 773.5 million at an increase of 99.1% over 2008 and rentals of about 365 million DVDs, the company was not without its share of problems...

Competitors

According to analysts, Redbox brought into the business a new channel of product delivery. It competed both against traditional brick and mortar stores such as Blockbuster and against online retailers such as Netflix...

Looking Ahead

With experts predicting that there was space in the market for 60,000 DVD rental kiosks and that sales would touch US$2 billion by 2014 , Redbox was already a quarter of the way there with around 24,000 kiosks as of September 2010...

Exhibits

Exhibit I: A Brief Note on Kiosks
Exhibit II: An Image of a Redbox Kiosk
Exhibit III: An Image of NCR's Blockbuster Express Kiosk


 

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