Redbox enjoyed a strong period of growth given the fact that customers preferred this movie rental service due to the convenience it offers as well as its low prices. Over the past few years the company has installed more than 40,000 DVD rental kiosks in major retailers, 7-Eleven’s and grocery stores. With growth expected to remain flat throughout 2014 Redbox’s parent company Outerwall Inc. has announced that over 500 kiosks will be unistalled in the U.S.
Last year Redbox’s revenue only rose by 3 percent even though for the past few years it has been enjoying double digit growth. Throughout 2014 its revenue is projected to remain flat so thus it makes sense for the company to change its position on the ubiquitous kiosks and focus more on efficiency.
There’s also the fact that there simply aren’t that many viable locations left to put new kiosks in. With more than 40,000 of them already spread across the country Redbox is reaching stagnation in that regard. Moreover the company is also competing with the rise of online video streaming services most of which are also into original programming, giving their subscribers an additional reason to stick around.
Redbox started with cheap $1 per day DVD rentals and expanded its offerings to include Blu-ray and video game rentals as well at different albeit affordable prices. It even experimented with selling concert and event tickets through kiosks but that plan is being shelved in less than one year since launch.
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