Redbox Gives Netflix a Run for its Money

Redbox Gives Netflix a Run for its Money

Ah, Redbox. You’ve probably seen their ubiquitous red kiosks somewhere in your neighborhood before. The company has been around since 2002, and I remember trusting Redbox to provide off-the-wall and nearly unheard-of movies. Recently, though, I began to notice a change in the offerings, which included bigger blockbusters and more recent releases. When did that happen?

Looking at Redbox

In the past year or two, Redbox has increased in popularity thanks to its convenience, cost, and improving selection. Movie theaters are expensive, but Redbox operates by renting out a film for just $1 a day. And since there are nearly 33,000 kiosks at grocery stores, fast food restaurants, and pharmacies across the country, returning a rental is ridiculously easy.

Redbox used to fly under the radar until Netflix committed its major faux-pas by upping the cost of its rental services. In the backlash that followed, Redbox quietly teamed up with Verizon to create “a joint venture that will create a new choice for quality- and value-conscious consumers seeking a simple and affordable way to access the video entertainment they crave,” as announced in a recent press release.

The Redbox/Verizon Project

Details are sparse, but the project is set to debut in the second half of 2012. According to the press release, it will offer “subscription services and more in an easy-to-use, flexible and affordable service that will allow all consumers across the U.S. to enjoy the new and popular entertainment they want, whenever they choose, using the media and devices they prefer.”

The phrase “using the media and devices they prefer” sounds especially promising. More individuals than ever before are relying on smartphones, tablets, and video game consoles to provide access to streaming services; if Verizon and Redbox are planning to create a streaming service à la Netflix Instant, then being accessible by multiple devices is essential.

Bob Mudge, president of Verizon consumer and mass business markets, had this to say:

When you consider the core elements the parties bring to this venture – our powerful brands; our national rental kiosk footprint; our anytime, anywhere network presence; and our mutual commitment to customer-focused innovation – it’s clear that Verizon and Redbox are a powerful entertainment team.

Couldn’t agree more, Bob. Redbox is awesome because of its convenience and ease of use, and if the company’s latest venture is going to offer the services Netflix was known for before it slipped up, then the duo could pose a serious threat to Netflix’s vitality.

Of course, it all boils down to selection, and if Redbox and Verizon really do want to give Netflix a run for its money, then they’ll need to offer better movies earlier than the competition.

What do you think: will Redbox and Verizon become Netflix’s biggest threat?

Scott Kaufmann
[email protected]

Scott is Partner at Lucid Agency and a lover of all things technology, marketing, investing and entrepreneurship. Scott volunteers on the board of the Denver-based Nonprofit Celebrate EDU and as a mentor for SeedSpot (a Phoenix-based social startup incubator).

  • Liz
    Posted at 13:41h, 14 February

    I think netflix should be worried about ALL of their competition. Raising your prices by 60% in one go is a crazy business plan.

  • Scott
    Posted at 14:27h, 15 February

    I love Netflix, but recently i’ve switched to Amazon streaming and it works great. The selection isn’t quite what netflix has just yet, but it’s close. And it works about the same. Redbox teaming with Verizon seems like it could be smart if they can figure out a way to stream on-demand fast to consumers in a variety of ways. Netflix better keep innovating or they’ll get left in the dust…