Redbox Could Take On Netflix in Streaming
Redbox could get into the online video streaming business, if a recent survey is any indication. According to High-Def Digest, Redbox has reportedly asked customers if they would be interested in a streaming service that would put the kiosk rental company …
Context & Ripple Effects
Redbox enters April 2010 at a strategic crossroads. A December 2009 industry report warned that its dollar-a-night kiosks were cannibalizing entertainment sales, and by February 2010 that pressure had produced a concession: a multi-year Warner Bros. distribution deal that delays new releases at Redbox kiosks by 28 days — the studio trading reach for window protection.
First-order effects
- If the customer survey (reported by High-Def Digest as rumor, not confirmed plans) leads to a streaming product, Redbox would be entering head-to-head against a Netflix that in January 2010 signed five more consumer electronics manufacturers and this week confirmed an iPad streaming app with an iPhone version strongly hinted.
Second-order effects
- Studios hold the leverage over any Redbox streaming move: having already extracted a 28-day release window from the kiosk operator, rights holders could demand comparable protections or premium terms before licensing digital rentals to a company whose cheap-rental model they publicly blame for hurting sales.
Third-order effects
- A Redbox streaming entry would accelerate the collapse of the physical-disc-only rental business model, pushing kiosk operators toward hybrid distribution where the same catalog is sold across discs, kiosks, and connected devices — a structure Netflix has spent years building alone.
The trend: Home video rental is consolidating around multi-device streaming platforms, and every physical-rental player — Redbox included — faces the choice of building a digital arm or ceding the format shift to Netflix.