Redbox: Competing in the Movie Rental Market

Abstract:

The case is about Redbox, a chain of DVD rental kiosks in the US. The company operates more than 24,000 automated DVD rental kiosks at various locations throughout the US. Since its inception, Redbox had lured away customers from chain movie rental stores such as Blockbuster Inc. and online movie rental service providers such as Netflix. Critics were of the opinion that Redbox's business model would not be viable in the long run but time and again, Redbox had proved them wrong. The company grew at a fast pace despite stiff opposition from some leading Hollywood studios, which they felt that Redbox's US$ 1 rental a night was cannibalizing their own DVD sales.

As of 2010, Redbox was planning to offer movie rentals in the Blu-ray disc format as well as video game rentals from its automated self service DVD rental kiosks. It had also announced its intention of entering the online streaming business dominated by Netflix. Though industry experts are predicting a boom for the movie rental business, it remains to be seen whether Redbox can hold on to its lead as the market leader in the automated DVD rental kiosks business with the entry of NCR Corp. Whether it will be able to wean away a significant segment of the online streaming business from Netflix too remains to be seen.

Issues:

» Understand the various issues and challenges in service marketing
» Understand the issues and challenges in kiosk marketing and appreciate the significance of kiosks as a direct selling tool.
» Realize how long-term relationships with customers can be achieved through the effective use of direct marketing tools.
» Prepare a service blueprint for Redbox's automated DVD rental kiosks and, based on this, explore ways in which it can be bettered.
» Analyze the competition in the movie rental businesses and identify the challenges before Redbox.
» Visualize, using the Ansoff Product-Market Growth Strategy, the future possibilities for Redbox which will help it retain its competitive position.
» Explore ways in which Redbox can effectively compete in the movie rental business.

Contents:

Keywords:

Kiosk marketing, Service marketing, Service blueprinting, Strategic Marketing, Business model, Automated self service movie rental kiosk business, Online streaming business, Competition, Redbox

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