Redbox tripled kiosks in 2007, expands in Midwest

By Danny King -- Video Business, 1/29/2008

JAN. 29 | No. 1. DVD rental kiosk operator Redbox is further expanding its presence in the Midwest by adding machines in HyVee and Buehler’s supermarkets.

The company, which tripled its kiosks to 6,300 in 2007, has added 400 more since the beginning of this year, including the additions of HyVee stores in Iowa, Kansas, Nebraska, Illinois, Missouri and Minnesota, and Buehler’s units in northeast Ohio. Redbox, which is 95% owned by McDonald’s and Coinstar, also added machines at Raley’s stores in California and Price Chopper markets in New York.

Redbox is boosting its presence as the largest movie-rental store chains are shrinking theirs. No. 1 video chain Blockbuster closed about 700 of its 8,500 stores worldwide for the fiscal year ended Sept. 30 as it invested in its Total Access online-rental service to compete against rental-by-mail leader Netflix.

Movie Gallery, which filed for bankruptcy in October and whose reorganization plan was approved by its creditors earlier this month, shut about a fifth of its 4,500 eponymous and Hollywood Video stores last year.

Redbox’s next largest movie-kiosk competitor is closely held TNR, which had about 2,100 MovieCube and The New Release machines in the U.S. as of last June.