April 24, 2009

Netflix's looming nemesis: The buck-a-night DVD kiosk?

Even as he announced another quarter of soaring revenues for the booming movies-by-mail company, CEO Reed Hastings warned that Netflix might be facing a new—and formidable—competitor by the end of the year: A growing army of rental kiosks that offer the latest DVDs for $1 a night.

source link Ben Patterson blog

MarketWatch reports that Hastings and Netflix aren't "overly concerned" about Redbox, which boasts more than 12,000 kiosks nationwide in such retail locations as McDonald's, Wal-Mart, and Walgreens, because the Redbox kiosks (each capable of holding about 700 discs) only offer new releases, as opposed to Netflix's vast catalog of older titles.

That said, Hastings predicts that Redbox—and not, say, Blockbuster or Hulu—will be Netflix's "main competitor" by the end of 2009, according to Marketwatch.

Interesting—and I have to admit, I'd never even heard of Redbox until I starting reading about how Netflix is ... well, maybe not afraid of it, exactly, but clearly keeping a watchful eye.

I checked out Redbox's Web site and it all looks pretty simple—you just go up to a Redbox kiosk (I only found a handful of locations in New York City), pick a movie (you can also reserve one online), swipe your credit card, and take your rental DVD home.

You're charged a buck for each night you keep your movie, and you can return the disc to any RedBox location when you're done. There are no late fees per se, but after 25 days Redbox will charge your credit card $25 plus tax.

So, I'm curious: How many of you have rented movies from RedBox before? How was your experience? Would you consider dropping your Netflix subscription in favor of Redbox—or have you already? Should Netflix be worried? Let us know what you think.

Netflix CEO: Kiosks will be main competition

Netflix CEO: Kiosks will be main competition
By David B. Wilkerson
Last update: 6:27 p.m. EDT April 23, 2009Comments: 2
CHICAGO (MarketWatch) -- Netflix Inc. (NFLX:

43.40, -1.92, -4.2%) Chief Executive Reed Hastings said Thursday that the online DVD rental pioneer expects $1 kiosks to be its main competitor by the end of 2009, surpassing video stores. A growing number of customers who cancel their Netflix subscriptions cite kiosks as a reason why they dropped the service, Hastings explained. Commenting during a conference call with analysts, Hastings said Netflix is not overly concerned about the kiosks, despite their increasing ubiquity, because the kiosks focus on new release DVDs, which only account for about a third of Netflix's rentals. "Our differentiators continue to be our vast selection, over 100,000 titles, the convenience of mail and streaming," he said.

Posted by staff at April 24, 2009 09:07 AM