Redbox: Disruptive Innovation in DVD Rentals

Case Code: BSTR359 Case Length: 14 Pages Period: 2002-2009 Pub Date: 2010 Teaching Note: Not Available

Price: Rs.300 Organization: Redbox Automated Retail, Redbox Automated LLC Industry: DVD Rentals, Entertainment Countries: USA Themes: Innovation, Business Models, Differentiation, Pricing Strategy

Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case deals with the disruptive impact of Redbox Automated Retail, LLC (Redbox) - a company that offered DVDs for rent at a low rate of US$ 1/day through kiosks - on the US (DVD rental industry. It begins by describing the company's inception, and how it managed to grow rapidly over the years. The case also details some of the important features of Redbox's business model, including the use of patented technology to enhance customer experience. It then discusses some of the problems the company is facing, including its legal disputes with some of the leading movie studios. Finally, the case presents an overview of the competitive scenario in the DVD rental industry, and the company's future prospects.

Issues

The case is structured to achieve the following teaching objectives

• Understand the disruptive effects of an innovative service on mature markets
• Appreciate the use of technology in improving the customer experience
• Evaluate the different business models in the DVD rental industry

Contents

Introduction
Background Note
The Redbox Experience
Problems with Movie Studios
Competition
Outlook
Exhibits

Keywords

Redbox, DVD Rentals, Movie industry, DVD kiosks, Video rentals, First sale, Business models, Movie distribution, Innovation

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