I’ve been renting videos and DVDs since videotapes first came on the scene, starting with the $5-7/overnight rentals with draconian late fees of the early generation of video rental all the way to now being a long-time NetFlix member, so it should be no surprise I was intrigued when I saw a DVD rental kiosk at the local gas station yesterday.
Upon closer examination,the attractive kiosk proved to be run by Redbox Corporation and it had a simple system where you could swipe your credit card and rent any one of a number of current release DVDs for only $1 a night.
But it wasn’t until I visited their Web site that I knew why this company is one to watch, and why agile little Redbox is going to redefine the entire world of DVD rental…
It turns out that Redbox is a wholly-owned subsidiary of McDonald’s Corporation, which was a delightful surprise: while McDonald’s might not be where I personally go for something to eat, I certainly recognize that it’s an omnipresent company with a remarkable reach into both our society and culture. Who better to tilt at the windmill of traditional DVD rental than a multi-billion dollar mainstay of the corporate world beloved by millions of people?
In the interest of doing some research, today I went to the local McDonald’s — they have a Redbox kiosk in the store — and rented two movies.
I was impressed with the entire experience.
First off, there are limitations to the Redbox approach to rentals, not the least of which is that I’d estimate that the unit has no more than about 50 titles, total, and there’s certainly a chance that the movie you seek would be unavailable since its reliance on physical disks means that there’s a finite number of any given movie. (You can see what’s in the kiosk right now on their current releases page)
The upside is amazing, though. For a paltry $1/day you can rent movies and return them to any other Redbox kiosk. This means that if there’s a participating McDonald’s on both ends of your next plane flight, train trip or other long journey, you need just add 10-15 minutes to your travel time to grab a couple of newly released DVDs, watch them on your flight, then drop them off on the way to your hotel. That will definitely kick the legs out from under the airport-based (expensive) DVD rental companies.
Even more interesting is the potential impact on companies like Blockbuster and Hollywood Video because one of the main costs of running a rental store is the square footage: if you could have the entire store automated and have a simple kiosk delivering up the individual films, you could theoretically offer thousands of popular movies in a fraction of the real estate. Less overhead = lower prices or higher margins. (Meanwhile, Blockbuster and Hollywood Video still require that you return your rental to the same outlet you rented it, a ridiculous limitation in this day of high-speed pervasive networking and highly automated systems0
Just for a moment, also imagine what it would be like if the Redbox kiosks could produce self-destructing DVDs (e.g., 72-hour DivX, for example) as an option so you wouldn’t even have to bother returning them. Now it’s just a matter of hard disk space within the kiosk computer: the system could foreseeably have a library of tens of thousands of movies, erasing one limitation of the system. Since you’d never have to return them, they can be less pervasive too: $1 for a regular DVD or, say, $2.50 for a self-destructing DVD would be a lovely set of options.
If Redbox never goes any further than having kiosks primarily in McDonald’s restaurants throughout the United States and never has more than 50-75 newly released titles, though, I still predict it will be the kind of success that will shake up the rental industry.
If you rent DVDs, do yourself a favor and check out Redbox and you’ll have a glimpse of the future of DVD rental.