Posts for 'Redbox'

  • VideoNuze Podcast #316: Analyzing the Crowded SVOD Landscape

    I'm pleased to present the 316th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

    It seems like a week doesn’t go by these days without a new SVOD service being announced or launched. For example, this week Fullscreen said it would launch its “fullscreen” SVOD service on April 26th, while comedian Kevin Hart and Lionsgate announced a new video/games service.

    In today’s podcast, Colin and I discuss these ventures, as well as Redbox’s planned SVOD service, NBCU’s Hayu (“hey you”) reality SVOD startup, Cinedigm’s CONtv, Vessel and YouTube Red, all in the context of the crowded SVOD landscape.

    We’re both convinced that ultimately viewers won’t subscribe to more than a handful of SVOD services, meaning many of these new ventures won’t ever achieve scale. To support our SVOD analysis, we use the framework I posted a year ago with 9 key criteria. I continue to believe it is a valuable tool to add rigor when comparing services.

    Listen now to learn more!

    Click here to listen to the podcast (20 minutes, 56 seconds)

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    The VideoNuze podcast is also available in iTunes...subscribe today! (note the link has been updated)

  • Coinstar Reports Strong Q4, Proving DVDs Are Not Dead Yet

    Think the world has moved on entirely from renting DVDs to streaming? Think again. Coinstar reported strong Q4 earnings late yesterday, with its Redbox DVD kiosk unit showing 39.5% revenue growth for the quarter. Coinstar attributed Redbox's performance to new kiosks, popularity of new releases and the price increase that went into effect on Oct. 31st.

    Coinstar management is also bullish for 2012, forecasting Q1 revenue of $530M-$555M, exceeding analysts' average expectations of $517M. And it's betting further on DVDs' continued strength, also announcing yesterday that it is acquiring NCR's 10,000 Blockbuster Express DVD kiosks for approximately $100M, which will help it build out its international business.

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  • Winners and Losers Due to Netflix's Decision to Split DVDs

    Netflix's bizarre decision to separate its DVD business from its streaming business will have significant ramifications for the video ecosystem. Below are some of the clear winners, potential winners and clear losers.

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  • Redbox Subscription Still Coming

    Redbox's president was talking up his company's upcoming subscription video service this week, though no launch dates or partner were identified. Redbox has big-time Netflix-envy and clearly believes it can compete. That will be easier said than done.

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  • Time Warner's "Premium Video-on-Demand" Experiment is a Blind Alley

    Talk about an initiative that flies in the face of all prevailing sentiment: Time Warner is moving forward on testing a new window for early-release movies on VOD priced at $20-30 apiece in 2011, according to comments its CFO John Martin made yesterday at the Goldman Sachs conference. Never mind the wrath the idea will stir up among movie theater owners whose traditional windows get cannibalized as a consequence (Disney learned about that with its "Alice in Wonderland" early DVD release experiment last February), the real issue is that pay-TV operators should deem the idea a non-starter.

    Typical VOD rental rates of $4-5 already look expensive to consumers compared to Netflix's $9 all-you-can-eat monthly plans and Redbox's $1 DVD rentals. And while there are scenarios where getting a group or family together to watch a movie makes sense, it's getting harder than ever to do so. The reality is that families are atomizing to their individual activities; perusing or playing on Facebook, watching YouTube/Hulu/Netflix/etc., playing with the Wii or Farmville, chatting on Skype, shopping on Amazon, etc. Corralling this crowd and getting them to agree on any one movie is already a challenge; the prospect of paying $20-30 for the pleasure just sets the bar that much higher.

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  • In Trying to Preserve DVD Sales, Studios Are in a Tight Spot

    It's not news that DVD sales - the lifeblood of Hollywood studios' P&Ls - are in a freefall. In response, the studios are doing all sorts of things to eke out just a little more profitability from the sales of the shiny discs. But as several news items over the last week underscore, the studios have little wiggle room before their efforts to shore up DVD sales have real or perceived consequences for key business partners.

    Exhibit A is the brouhaha over Disney's new plan to release Johnny Depp's "Alice in Wonderland" on DVD 12 1/2 weeks after its theatrical opening, instead of the usual 16 1/2 weeks, regardless of whether it's still playing in theaters. In the past, when a film's "release windows" were distinct and well-separated, everyone in the distribution chain knew they'd have their separate bite of the apple. With collapsing windows, those bites are converging, leaving some feeling they're not going to get their fair share. In the U.S. there has mostly been just grousing about Disney's plan among theater owners, but in Europe there are threats by large theater chains of an all-out boycott of the film.

    It's hard not to feel some sympathy for the theater owners as the "Alice" plan isn't a random event. Sony recently ran a misguided promotional campaign giving away "Cloudy with a Chance of Meatballs" DVDs to certain Bravia buyers while the film was still playing in theaters. And it attempted to accelerate the release of the Michael Jackson "This Is It" DVD until theater owners drew the line. No doubt there are plenty of other examples being floated privately in Hollywood.

    Meanwhile, news also broke this week that Redbox, the $1 a day rental kiosk chain had acceded to Warner Bros.' demand that it not rent any films until 28 days after their DVD release, in order to help preserve initial sales. As part of the deal Warner dropped its lawsuit against Redbox. In return, Redbox got lower pricing on its Warner DVD purchases. The deal mirrors the 28-day deal Netflix did with Warner last month, which I thought was a win for everyone. But the key difference in that deal vs. Redbox's is that Netflix has a huge rental catalog available for its subscribers to choose from, meaning new releases are far less important (Netflix says only 23% of rental requests are for new releases). On the other hand, Redbox's whole value proposition rests on low prices and selection of new releases. What is Redbox's fate if it does similar deals with other studios?

    Putting the squeeze on Redbox and its kiosks seems like a dubious strategy by studios. In an age where piracy looms large, studios should be focused on enhancing, not diminishing the accessibility of their product (as a Coke executive once famously explained the company's marketing goal: "always within an arm's length of desire"). While Hollywood doesn't like Redbox's lower margins, focusing on that issue excessively when the product is clearly in decline is missing the forest for the trees.

    Studios' desire to preserve DVD sales is going to further intensify, but defending them is only going to get harder. Certainly part of the reason is that the ongoing recession is forcing many consumers to cut back on their discretionary purchases. But the larger issue is that there's huge momentum behind the shift to online subscription/rental and even free models. The data shows that online viewing hit an inflection point in 2009, with free premium sites like Hulu experiencing extraordinary growth.

    And the data showing online's appeal pours in almost daily; yesterday it was The Diffusion Group reporting results of a study of Netflix users showing that two-thirds of them that have a broadband connection are now using the "Watch Instantly" streaming feature. This week's launch of HBO Go, the premium channel's site for its subscribers, and its distribution deal with Verizon, are evidence that even the mighty HBO can't resist online's allure. Last but not least, in 2010 TV Everywhere rollouts will gain steam.

    There's no denying the truth that DVD sales are under assault from all sides. Studios, desperate to hold on to DVDs' precious profits, are increasingly contorting themselves to keep the DVD cash cow alive a little longer. No surprise though, their efforts are not without consequences. At what point do the studios capitulate and throw DVD sales under the bus? We'll have to wait and see.

    What do you think? Post a comment now (no sign-in required).

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