RedBox: The Enemy of the Movie Industry?

So we all know what RedBox is, right?

The kiosk that sits in McDonalds (or various other places now) and allows you to rent a DVD for one night for the low price of a buck and tax, of course (the Government has a healthcare plan to fund).

RedBox Generic Terminator Salvation PosterI started to wonder why some of the posters and “cover art” wasn’t the actual cover art for the movie.

Examples can be seen here:

http://johnnydriver.com/2010/01/11/redbox-kiosk-generic-movie-posters/

I then heard that RedBox was having problems with certain movie studios pushing back on allowing them to carry their titles. So It seems that RedBox just goes and buys the discs from WalMart and sticks a “generic” poster up there to show that they have the movie, but without all that pesky copyright infringement.

It’s Tricksy, I likes it!

Well, than I stumble across this article that sort of sums up the whole whining and crying bitchfest that the studios are playing up right now.

http://mashable.com/2009/12/08/redbox-study/

We previously reported that studios were trying to force the hand of Redbox and Netflix to delay new release rentals by 30 days. While Netflix ponders the option, Redbox is suing many of the major studios who refuse to sell them their DVDs. The battle wages on, with some reports indicating that Redbox buys its DVDs from Walmart. If the data from the study can be trusted, we now have further insight into why the struggle is building up to be a battle to the death.

The LAEDC paints a picture of doom and gloom. From the report:

“In the event that new releases are available in Redbox kiosks at street date, there will be erosion of retail revenues. Additionally, to the extent that consumers substitute away from higher-priced rentals to lower-cost rentals, there will be erosion of rental revenues. While the magnitude of the revenue loss is difficult to disentangle from the myriad factors threatening this revenue stream, we estimate overall industry revenues of $1 billion or more will be foregone.

For each $1 billion of revenue in the domestic home video industry, the motion picture industry earns $520 million. Using the motion picture industry in Southern California as representative of overall industry activity, an extra $520 million in industry revenue would translate into direct, indirect and induced economic activity, including:

– At least $1,493 million in economic output (as measured by business revenues)

– At least 9,280 jobs with annual earnings of almost $395 million, of which at least
2,290 would be in motion picture and sound recording industries with earnings of at least $109 million

– Up to $35.4 million in contributions to health and welfare funds for guild and
union members, the majority of which would occur in union plans for below-the-line
employees

– Over $30 million of tax revenues at state, county and local levels.”

So what I’m getting out of this is that the movie studios are IGNORING the consumers. Never a good thing. They want to charge what they want and MAKE us like it. That is the goal of all marketing at the core, sure. But it’s visibly public this time and people are noticing it. Studios are complaining that sales of DVD’s will (and have) go(ne) down because of this, to which I counter: release movies that people WANT TO BUY TO HAVE ALL THE TIME. I buy all the movies I’ve enjoyed so that I can enjoy them on my time and in the way I want. If I don’t know if I want to see the movie, a buck is a nice gamble to take. So I BUY the movies that I really enjoy and I RENT the ones that I am iffy about.

Why is this such a hard concept for studios to follow?

Even the price breakdown doesn’t make much sense to me. Studios are complaining that a dollar is “too cheap” for the product. What? They are not comparing numbers correctly.

Let me spell it out for you, studios:

RedBox offers a movie at: $1 for 1 day

Rental stores typically charge $2-$3 for 2-3 days.

I think Blockbuster now does $5 for 5 days.

So in all examples, a movie rental averages out to being *gulp* $1 for 1 day!

Does anyone else not see this? Hundreds of highly paid marketing people are squiggling  the numbers and shifting the facts but it turns out to all be the same in the end.

Typical.

Here are my parting thoughts. Hollywood, make movies people WANT TO SEE and WANT TO SEE AGAIN, and this problem goes away.

Make crap that people can only stand once and you LOSE MONEY.

The End.

These things give us money. Visit them!

About Wugmanmax 220 Articles
(AKA – Wug, Dug, Foug) Hailing from the Twin Cities, Wugmanmax is an avid toy collector, graphic designer, video producer, husband, father of 3, firefighter, and Ingress player.

6 Comments

I suppose you have a better thought on the subject?