The argument for Redbox
SUPERMARKET & DRUG CHANNEL GUIDE: How the kiosk operator helps the DVD industry
By Cindy Spielvogel -- Video Business, 5/4/2009
Get a list of upcoming DVDs for the supermarket & drug channel
MAY 4 | SUPERMARKET & DRUG CHANNEL GUIDE:Kiosk leader Redbox has seeped into the DVD rental business in the last few years to the extent that both retailers and studios have considered the $1-a-night kiosks a threat to profits. Retailers have encouraged lawmakers to take a closer look at whether kiosks make R-rated movies easily accessible to children. Universal Studios Home Entertainment has been embroiled with Redbox in a lawsuit over terms designed to keep Redbox’s low-priced rentals from negatively impacting profits from other retail avenues.
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- Redbox shows positive impact on studios and the DVD industry.
Redbox customers will purchase 77 million DVDs in 2009, and an estimated 23 million will be the result of a customer trying the title at Redbox first and then buying it at retail. - Redbox drives traffic to grocery stores.
A typical Redbox kiosk in a grocery store accounts for approximately 480 visits per week, including rental and return visits. According to NPD Group data, approximately 52% of these trips are specifically to visit Redbox. - Redbox grocery customers are extremely loyal to their favorite store banners.
Of the Redbox customers who primarily rent in grocery, 85% do so at only one chain. - Redbox customer demographics align with those of grocery customers.
According to NPD demographic data, Redbox’s national customer base is 52% female, 63% have at least one child, and 51% have a household size of at least four. - Redbox users are more likely to make a retail DVD purchase in grocery than Blockbuster or Netflix customers.
Customers who identified Redbox as their primary “rentailer” reported that approximately 6.3% of their DVD purchases in 2008 were in a grocery outlet, compared to 4.2% of Blockbuster and 2.9% of Netflix customers.
