

Study: Redbox Will Destroy the Entertainment Industry - adamhowell
http://newteevee.com/2009/12/08/study-redbox-will-destroy-the-entertainment-industry/

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ryanwaggoner
I think Redbox is part of a bigger trend: automation will destroy tons of
service jobs and "hurt" a lot of established industries in the process.
Blockbuster/Redbox is a good example. I can replace a 5000 sq ft store and 10
employees with a kiosk that takes up a few sq ft. Selection might not be as
good, but it's good enough for most people.

Or take your typical restaurant. There's almost no reason that 95% of the
waitstaff couldn't be replaced by ordering kiosks at each table. It would
reduce errors and reduce costs. Or what about convenience stores? Figure out
which items make up 90% of your sales, put them in an automated kiosk and put
one on every street corner. You're now selling almost as much (or maybe even
more) with dramatically lower costs.

I think it's a good thing overall, but there will definitely be some big
losers economically from such a dramatic shift.

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apsurd
Good thought analysis, but in general, there will always be people willing to
pay to be waited on (in your restaurant example). If anything it would be more
accurate to say fast-food workers would be most in trouble. Being a waiter is
a skilled job afterall =)

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ryanwaggoner
There may always be those people, but convenience and price win over personal
service. Example: Wal-Mart.

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ardit33
if it was for price people wouldn't go at a restaurant, but just buy the
cooked food and eat it home.

Most non-cheap restaurant ($12 per meal and over) will just not automate.
Think about it, you can get your coke/cola from a vending machine and it has
been like that for ages, but you are still not able to get the beer/fancy
drink. Even if sometimes they can be rude, a bartender is part of the
experience.

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apsurd
I should have also edited my post to add:

I frequently (3 times per week) go to tea houses to program, in order to get
out of the house. Some spots cost upwards of $6 dollars, for TEA! Do I spend
the money? Hell yes;

very simply because pretty asian girls serve you the tea with a smile.

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protomyth
from the article: It should be noted that LAEDC’s mission is to “attract,
retain and grow businesses and jobs for the regions of L.A. County,” so it has
an agenda.

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gfodor
Study: On-demand instant HD movie streaming will destroy Redbox.

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kierank
"Acquiring Rights" for DVD rentals is vastly easier than getting the streaming
rights to HD content.

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philwelch
As you can tell by comparing the Netflix DVD library to the Netflix streaming
library. And that's with all the money and influence of Netflix, plus a
strategic partnership with Starz (which itself has clout).

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nym
I had a terrible experience with Redbox, I liked the idea of avoiding the
teenagers at Blockbuster, but when I rented a movie it was unplayable because
it was scratched beyond repair. I suppose I could have contacted their
customer service reps, but at the price of a rental vs. my time it just didn't
make sense.

On the other hand, I wish I had shares in their company.

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idoh
No need to wish, they are part of a publicly traded company, cstr (Redbox is
owned by Coinstar).

[http://www.google.com/finance?client=ob&q=NASDAQ:CSTR](http://www.google.com/finance?client=ob&q=NASDAQ:CSTR)

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jfarmer
Which is also one of those "Why didn't I think of it?" companies.

Coinstar makes machines you dump your change into and, for a percent of the
transaction, prints out paper bills.

Free money! You build the machine, give the store a percent of the cut, and
every (non-premium) store will let you put one of those up front.

They're in every Safeway I've ever been in. I'd expect to see them in Wal-
Marts, Targets, etc. too.

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me2i81
It has to pay the store well enough to cover the cost of the Safeway manager
standing in front of the machine, scratching his head when it jams up.

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philwelch
Really?

Vending machines, pay phones, and coin-op laundry machines are all the same
business model, and typically, that business model involves the owner of
wherever the thing is installed calling the owner/operator of the machine when
it breaks down instead of fixing it yourself. My landlord knows nothing about
fixing the washer and dryer in my apartment building, that much is for sure.

All the head-scratching should probably boil down to "put an out of order sign
on it and call Coinstar" at worst.

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kp212
I understand DVD sales from retail outlets being harmed. However, I've always
wondered why rentals get harmed, doesn't Redbox have to follow the same
channels as Netflix, Blockbuster and pay for DVD's that are rented? I've
always wondered how the rental portion of the market in terms of revenues
works.

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pyre
I don't work for Redbox so I don't know for sure, but I'm speculating that
they maybe using the Krispy Kreme model (i.e. their growth is based on
expansion). In other words, since they keep opening up new kiosks they can
move product that is not selling well in one kiosk to another new kiosk,
rather than it being a sunk cost if they buy product for an area and it
doesn't end up selling well. At some point, they may end up collapsing in on
themselves if they are not able to raise their prices to account for such
write-offs (as their expansion slows). Though my theories could just be hot
air since I neither work for them nor am I an MBA (or an economics major at
that).

I know that they are looking to raise prices:
[http://www.insideredbox.com/redbox-begins-testing-higher-
ren...](http://www.insideredbox.com/redbox-begins-testing-higher-rental-
prices/)

Blockbuster is trying to compete with kiosks too:
[http://paidcontent.org/article/419-blockbuster-adds-dvd-
vend...](http://paidcontent.org/article/419-blockbuster-adds-dvd-vending-
kiosks-50-machine-pilot-redbox/)

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anigbrowl
I don't really see why...$1/rental is cheap but then if you watch a lot of
movies Netflix is arguably cheaper (and has a vastly better selection). I
think they ought to be more worried about movie downloads for a monthly flat
rate.

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JulianMorrison
I realized yesterday, DVDs take the piss. A hand-span of plastic to store less
data than you could fit on a micro-SD the size of your fingernail. This is an
obsolete medium.

I wonder how soon the general public will see it?

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zackattack
Redbox = dvd for big screen and instantly accessible to the mainstream
customer. It has already crossed the chas. When everyone has set top boxes it
will be obsolete. But that is not happening for a long time.

