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DVD rental company Redbox has started to test a new movie streaming and download service with some of its customers, according to Variety.

Known for its DVD rental kiosks, Redbox has dubbed its latest online service "Redbox Digital", which comes two years after the company shut down Redbox Instant, the ill-fated joint venture with Verizon that officially launched in early 2013.

redbox.jpg
The subscription-based service was patently unable to compete with the likes of Netflix, and Redbox has reportedly learned from the experience: it's staying away from subscriptions in order to concentrate on transactional video on demand, according to sources familiar with the company's plans.

An app for the service similar in appearance to Netflix showed up on the App Store last week, allowing trial users to stream or download content from the company's digital catalog. A company spokesmen contacted Variety via email to confirm the news:
We are testing a potential new transactional digital VOD and EST offering, with a small subset of our customers, designed to complement our core kiosk rental business. As we test and learn from our customers, we will make evaluations that determine any future course of action.
The Redbox Digital catalog is said to be dependent on the company's deals with movie studios, meaning some movies could be available at kiosks when they're not available for streaming. However, the digital catalog will have a much larger offering than kiosks, which usually only hold a few hundred titles.

No word was given on pricing, but typical one-off streaming costs are likely work out more expensive than the $1.50 Redbox customers currently pay for physical disc rentals.

Article Link: Redbox Testing New Movie Rental Streaming Service With Customers
 

Chupa Chupa

macrumors G5
Jul 16, 2002
14,834
7,394
How can streaming be MORE expensive than physical media rentals?

It's simple economics that how. There is a premium on convenience. It takes more time and effort to go to a kiosk & then have to return it next day. That diminishes it's value compared to streaming which is "on demand," even at 1am, doesn't have to be returned w/i 24hrs.

Also streaming permits a larger library than a physical RedBox can hold so in many instances streaming is the only way to rent a video which also allows for a higher price.

I don't see where RedBox can compete in this space though unless they undercut Apple and Amazon. I'm unsure the movie companies will allow it unless maybe RedBox only gets titles 30 or 60 days after Apple and Amazon.
 
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ArtOfWarfare

macrumors G3
Nov 26, 2007
9,275
5,415
How can streaming be MORE expensive than physical media rentals?

I think that with physical media, Redbox counts on you losing the disk or forgetting to return it quickly enough.

So though they advertise prices as low as $1-2, they're counting on the fact that, on average, someone will have the disk for say, 2.5 days, so actually, on average they're making $2.50-$5 per rental.

I wonder if they could have the same kind of model with a streaming service, where you have to explicitly press a "return" button somewhere on the website, and they don't offer any reminders that that button has to be pressed after the movie is watched.

It'd seem sleazy and apparent that the're counting on users forgetting to hit that button, but they've always been counting on users forgetting to return the disk, so this is no different morally... it's just a bit more transparent that that's how they subsidize the service for people who actually remember.
 
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convergent

macrumors 68040
May 6, 2008
3,032
3,081
The big problem they are going to have is how to get their app to the customers. Three of the primary places they could delivery it are through Apple, Google, or Amazon's ecosystems. All of them have competing services that charges $4+ to rent a movie. If Redox wanted to do it for say $3 to continue being the low cost provider, do we think that any of these three would allow the app on their devices? So Roku may be their only place to offer it.
 
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cyberlocke

macrumors regular
Mar 23, 2009
133
256
It's simple economics that how. There is a premium on convenience. It takes more time and effort to go to a kiosk & then have to return it next day. That diminishes it's value compared to streaming which is "on demand," even at 1am, doesn't have to be returned w/i 24hrs.

Also streaming permits a larger library than a physical RedBox can hold so in many instances streaming is the only way to rent a video which also allows for a higher price.

I don't see where RedBox can compete in this space though unless they undercut Apple and Amazon. I'm unsure the movie companies will allow it unless maybe RedBox only gets titles 30 or 60 days after Apple and Amazon.
I think this is where supply and demand doesn't quite fit the digital economy. It's done simply to maximize profit. And technically the supply is greater with digital streaming, therefore if demand remains the same, cost should actually go down.

Convenience should have nothing to do with it. Digital is all about convenience, it's inherent. By your logic, everything digital should cost more. That's not the future I was promised. Otherwise we'd just be adding layers of luxury, not actually improving anything.
 
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ArtOfWarfare

macrumors G3
Nov 26, 2007
9,275
5,415
The big problem they are going to have is how to get their app to the customers. Three of the primary places they could delivery it are through Apple, Google, or Amazon's ecosystems. All of them have competing services that charges $4+ to rent a movie. If Redox wanted to do it for say $3 to continue being the low cost provider, do we think that any of these three would allow the app on their devices? So Roku may be their only place to offer it.

Is an app really necessary? What's wrong with just having a website?
[doublepost=1469456229][/doublepost]
I think this is where supply and demand doesn't quite fit the digital economy. It's done simply to maximize profit. And technically the supply is greater with digital streaming, therefore if demand remains the same, cost should actually go down.

Convenience should have nothing to do with it. Digital is all about convenience, it's inherent. By your logic, everything digital should cost more. That's not the future I was promised. Otherwise we'd just be adding layers of luxury, not actually improving anything.

Competition is what drives prices down. Everyone who enters the market has to either say what they're going to do different that makes them better, or else say that they'll do everything equally well but for a lower price. Otherwise nobody pays any attention to them.
 
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kd5jos

macrumors 6502
Oct 28, 2007
427
141
Denver, CO
I think that with physical media, Redbox counts on you losing the disk or forgetting to return it quickly enough.

So though they advertise prices as low as $1-2, they're counting on the fact that, on average, someone will have the disk for say, 2.5 days, so actually, on average they're making $2.50-$5 per rental.

I wonder if they could have the same kind of model with a streaming service, where you have to explicitly press a "return" button somewhere on the website, and they don't offer any reminders that that button has to be pressed after the movie is watched.

It'd seem sleazy and apparent that the're counting on users forgetting to hit that button, but they've always been counting on users forgetting to return the disk, so this is no different morally... it's just a bit more transparent that that's how they subsidize the service for people who actually remember.

They'd loose their first lawsuit. There is nothing to "return." The file isn't actually checked out, it's copied. The key that decrypts it does so for a limited period. I guess they might get away with an "invalidate," button. What happens is they give you a key for unlimited watching. Then, you have to invalidate the key, and only pay for however long the key was valid for.

This could be touted as the "convenience of "renting" for as long as you like." Then paying your bill when you return it.

So I guess, in a sense, you could do it. This would make the system as inexpensive as Redbox (if not more so) because you could limit the number of rentals on an account. You can only "rent" another movie once a key has been invalidated. Maybe you could even create multiple tiers of accounts. A Free account can rent one movie at a time, a paid account can rent three, and a Family account can rent 5. Then the company transfers the cost of the risk back to the consumer.
 
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Art Mark

macrumors 6502
Jan 6, 2010
387
704
Oregon
I think this is where supply and demand doesn't quite fit the digital economy. It's done simply to maximize profit. And technically the supply is greater with digital streaming, therefore if demand remains the same, cost should actually go down.

Convenience should have nothing to do with it. Digital is all about convenience, it's inherent. By your logic, everything digital should cost more. That's not the future I was promised. Otherwise we'd just be adding layers of luxury, not actually improving anything.
Exactly. Streaming SHOULD be much cheaper. It's pretty silly it isn't. In time of course it will be. Having machines manufactured, renting space in stores, physical breakdowns, and physical media that haas to be driven around and delivered...
 
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Chupa Chupa

macrumors G5
Jul 16, 2002
14,834
7,394
I think this is where supply and demand doesn't quite fit the digital economy. It's done simply to maximize profit. And technically the supply is greater with digital streaming, therefore if demand remains the same, cost should actually go down.

Convenience should have nothing to do with it. Digital is all about convenience, it's inherent. By your logic, everything digital should cost more. That's not the future I was promised. Otherwise we'd just be adding layers of luxury, not actually improving anything.

Convenience has everything to do with it. People are willing to pay extra because long term it's less expensive. Time is money. Anything related to convenience is more expensive. That is a market unto itself.

And no, it's actually illogical of you to assume that I'm saying everything digital should cost more. First, I don't even know what you mean by "digital," because technically CDs and Blu-Ray discs are digital too, just also physical. But back to whatever you are assuming I'm thinking, if there is no demand for whatever is being sold, why would it carry a premium?

And who promised you anything about the future? No one. And only a fool would take anything at face value if it some "promise" was made.
 
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macduke

macrumors G4
Jun 27, 2007
11,674
16,151
Central U.S.
iTunes movie rentals need to come down in price, full stop. They all do, really. I know they don't have much control over this due to deals with the studios, but I would rent A LOT more movies if they were half the price they normally are. $2-3 is the sweet spot for me and I bet most people would agree. It's more than Redbox but the convenience tax makes it worth it to not have to get out late in the evening and then return it later, or worse, forget to return it. But $6 on iTunes? Heck no! I'm not the type to watch very many movies over and over. If it's a movie I REALLY want to see, I'll go to the theatre and possibly buy it at full price. I also check this website every couple weeks that tracks iTunes Movie sales and will sometimes pick up movies I enjoyed if they're in the $5-8 range. Most everything else I don't really care, which makes me price sensitive. That or I'll just wait until it inevitably shows up on Netflix for a stint.
 
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Tinmania

macrumors 68040
Aug 8, 2011
3,524
1,009
Aridzona
I think that with physical media, Redbox counts on you losing the disk or forgetting to return it quickly enough.

So though they advertise prices as low as $1-2, they're counting on the fact that, on average, someone will have the disk for say, 2.5 days, so actually, on average they're making $2.50-$5 per rental.

It'd seem sleazy and apparent that the're counting on users forgetting to hit that button, but they've always been counting on users forgetting to return the disk, so this is no different morally... it's just a bit more transparent that that's how they subsidize the service for people who actually remember.
You based your response on what you "think?" Give me one source that can back up your claim that the "average" rental is $2.50-$5. I think that is nonsense.



Mike
 
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benjitek

macrumors 6502a
Sep 23, 2012
863
452
The market doesn't need yet another digital video rental service -- they all charge the same prices anyway. The only thing left to make a service worth looking at is same-day availability of theatrical release films at a reasonable price point. I don't see that ever happening though. Maybe same-day release, but not at a reasonable price.
 
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ArtOfWarfare

macrumors G3
Nov 26, 2007
9,275
5,415
You based your response on what you "think?" Give me one source that can back up your claim that the "average" rental is $2.50-$5. I think that is nonsense.

In 2013, they announced that their average rental brought in revenues of $2.56.

Page 8 of this document: https://www.sec.gov/Archives/edgar/data/941604/000119312513173688/d524783dex992.htm

This was just a filing that was referenced on the Wikipedia page (I'm actually a bit surprised I found this, since Redbox is wholly owned by another company - I didn't think that other company would be required to disclose these numbers.)
 
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Relentless Power

macrumors Nehalem
Jul 12, 2016
35,722
39,031
Streaming has to happen to Redbox if they plan on surviving. These kiosk rentals were hot years ago when movie rental stores went out of business, then it seems Redbox is one of the only few remaining. Redbox rental prices have influxed as well.

We are to the point where DVDs still exist and will continue to, but streaming is more convenient, safer (Versus swiping your Card every time at a shady WalgreenS) and more reliable than taking home a scratched DVD.

And streaming would eliminate the delivery employee's who exchange/deliver the DVDS for cost related purposes.
 
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cyberlocke

macrumors regular
Mar 23, 2009
133
256
Convenience has everything to do with it. People are willing to pay extra because long term it's less expensive. Time is money. Anything related to convenience is more expensive. That is a market unto itself.

And no, it's actually illogical of you to assume that I'm saying everything digital should cost more. First, I don't even know what you mean by "digital," because technically CDs and Blu-Ray discs are digital too, just also physical. But back to whatever you are assuming I'm thinking, if there is no demand for whatever is being sold, why would it carry a premium?

And who promised you anything about the future? No one. And only a fool would take anything at face value if it some "promise" was made.
Good call. By “digital” I meant streaming / non-physical media. Should have thought that one through a little more. Thanks.

As for convenience, I see your point. Often times it is cheaper for me to stream a movie for $4 than to get a Redbox because I forget to return it (and that return process is often a hassle).

Also, I hesitated to put “promised” in my post. I certainly don’t want to convey entitlement. But true advancements in technology should not just add convenience at the same or higher price (essentially just more luxury) but also offer them at a better price ultimately making life better while still making a profit for the seller (i.e. if your costs go down, then your price can too, while maintaining profit).

Finally, I echo what others have said—if Redbox can’t beat the current price point, then what’s the point?
 
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