Redbox Closing Over 500 Rental Kiosks
Redbox’s success may hinge on their accessible red kiosks at seemingly every gas station, McDonalds, and grocery store to grace the face of the earth. However, The Wall Street Journal reports that declining revenue and stagnant growth as why Redbox will be closing over 500 of their physical locations. Redbox recently began its attempt to compete with Hulu and Netflix by introducing the Redbox streaming service, partnered with Verizon. The service however failed to take off and created a huge drain on the resources of the company. Still, red kiosks won’t be any harder to find, with over 42,000 in operation.
The company may have realized they oversaturated the dvd rental market, and will be closing locations that are too close together. Last year the company only saw a 3-percent increase in revenue, and it doesn’t look like that will increase this year even with the closing of locations. The company still has a huge problem with out-of-date selections, with dvds not appearing in the kiosks until after weeks of them being released for sale. This means some people will find other ways to watch their movies, and streaming services are beginning to offer movies more promptly than ever before.
Some of the deals that the company has with studios expire this year, so it is possible that restructuring the previous contracts Redbox had could save the company. The studios will undoubtedly want more money, but even with a cash incentive it is uncertain whether the studios will be more open to getting dvds out faster as a move that could stop streaming networks like Netflix from taking over. Though Redbox survived the fall of physical stores like Blockbuster, how long do you think the company can hold on? Tell us what you think about Redbox closing over 500 locations in the comments below.