Redbox: Disruptive Innovation in DVD Rentals

            
 
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Case Details:

Case Code : BSTR359
Case Length : 14 Pages
Period : 2002-2009
Pub Date : 2010
Teaching Note :Not Available
Organization : Redbox Automated Retail / Redbox Automated LLC
Industry : DVD Rentals / Entertainment
Countries : USA

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"I do not think this will destroy the film business, but it's certainly a major issue over the next few years, especially if it continues to grow at the rate it's growing. Whether or not the titles get sold at the end of it, $1 a day does not help the entire movie industry."1

- Rich Greenfield, Analyst at investment research firm, Pali Capital, talking about Redbox, Inc. in 2009.

"Redbox is firing on all cylinders. They have good hardware and software, good marketing and good partnerships for their deployment locations."2

- Rufus Connell, Research Director for Information Technology at consulting firm, Frost & Sullivan, in 2007.

Introduction

In August 2009, Paramount Home Entertainment (Paramount)3 announced that it was beginning a trial licensing program with Redbox Automated Retail, LLC (Redbox) the leading automated kiosk rental service in the US, which offered DVDs on rent for US$ 1/ day.

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1] Ryan Nakashima, "Whither Redbox? Hollywood Studios Are Conflicted," www.mercurynews.com, August 7, 2009.
2] Bill Yackey, "Rise of Redbox," www.selfserviceworld.com, August 20, 2007.
3] Paramount Home Entertainment, created in late 1975, is the division of Paramount Pictures Corp. dealing with home video.
4] Street date is the day on which the DVD of a movie is released by the movie producers.


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