People talk about zero interest rate phenomenons and this seems to be like another case. Lots of companies making bad decisions right before the interest rates went up. Wonder how many more bankruptcies we'll see in the next year and a half.
I think that's "HN Bubble" talking, though. I see a lot of older and arguably poorer people using RedBoxes; after all, streaming is more expensive.
Meanwhile no streaming service will ever get Bob to sign up.
As an silly example: no one rents carpet cleaners every weekend, you can still rent carpet cleaning machines. There is enough demand in aggregate for it to be viable.
Could you start a Redbox from scratch? I kind of doubt it. I think the costs would overwhelm you. But that’s not the position they’re in.
I’m not saying you’re going to become a fortune 500 company on the business model. But I think there’s enough for a real business to survive there, depending on the areas where you place the kiosks.
However Redbox has history and the agreements may not be as favorable to them as they would need to keep operating, or they may have a lot more debt than necessary.
There are a lot of Bobs out there though. It’s not a big theoretical.
For another, it used to be the case that Redbox would have things well before you could stream them, or when they could only be streamed expensively. Various waves of the distributors making it more annoying for Redbox to buy the discs, pushing things to their own streaming services very early, and just generally the downturn of physical video media all blunted those positives though.
I used to use it semi-regularly for Blu-rays even not that long ago, but the kiosks around me have started to go away and the available selection and timing of releases is way worse than it used to be.
They really just have everything working against them: the ongoing huge shift to streaming, the pandemic and strikes putting holes in the release calendar, Marvel and DC both stumbling, interest rates...
That was a very big differentiator.
(I have no idea how to turn this into any sort of law but companies really shouldn't be allowed to just dive into debt, conquer a market via selling dollar bills for 75 cents, then collapse into a puff of compounded interest and massive losses and destroy the entire segment they are in as they collapse. I suppose just not having interest rates at effectively 0 will likely do the trick eventually.)
Otoh, it does kind or suck when it seems to destroy the whole segment, as sometimes happens.
Even if you have streaming subscription(s) you have to break out your abacus to determine if your service(s) have rights to the movie this month.
That being said, I have no idea what are their expenses. On the surface, it feels like they should have low costs, so I might be making wild assumptions. Or maybe there is a Bain Capital like situation behind the scenes intentionally destroying the business.,
Umm, I'm thinking, but the best I can come up with:
1. Rural/extremely out-of-the-way locations. Which means that locating a Redbox that is profitable is going to be extremely difficult because by definition you're in low-density areas.
2. Extremely poor people. Even most lower class people have cell phones these days where you can watch video, so the number of people in reasonably dense areas who can't afford broadband is going to be very low.
I do think the "multiple subscription services" issue is a valid point, but in general I think that most Redbox users are likely just slow adopters, similar to folks with landlines. The problem is that customer base slowly but surely goes away.
Rural people who can't get internet at home likely can't get good cell service at home either. You only have to be a few miles off of the main roads before service degrades rapidly.
Also, the unbanked. People who have money but bad or no credit.
But all that said, while it might still be possible to make some money with DVD rental vending in 2024, but it's not a growth business at all.
I love you John, but you're definitely an oddball! I say that with full affection from a fellow oddball :-)
Like coin exchangers and lottery scratcher machines, Redbox kiosks exist pretty much wherever the bulk of a community buys stuff for their fridge: supermarket, dollar store, convenience store, etc.
They're extremely well distributed.
And until Starlink, which is new and expensive and unfamiliar, many more (North American) communities than you think did not offer home broadband that was suitable for reliable streaming. Service was still traditional satellite, weak DSL, and maybe 3G in many places.
Plus, what made Redbox appealing to many was that you could spend a few dollars for a familiar, popular film when you had a few dollars to spare instead of committing to a whole bunch of recurring subscriptions just to hope that the title you want would eventually come up.
Certainy, the business model as a whole is becoming increasingly strained, but it continues to serve consumer needs that still aren't serviced vert well by anybody else. It's a sort of crossover point, but if the company collapses instead of restructures, it's going to disappoint and frustrate quite a lot of people.
They had as many as 42,000 kiosks. Tens of thousanda remain. They are used every day. Yet the future of the company looks bleak and the finances are in crisis. All those things can be true at once.
If your local library is well funded, most new titles appear on shelves pretty quickly after release.
The target demographics of people who can't afford or for whom internet is totally unavailable for streaming are much better served by their public library. It's generally funded by your city, county, or property taxes and pretty much any resident of the locality gets free access.
That leaves extremely rural locations as a target for Redbox, which is generally a pretty small market.