About six months ago, when Netflix was back on its heels after jettisoning some 800,000 angry customers, StreamingMedia.com received lots of traction around the whole story including a number of radio and television interviews on the story. One piece that got little attention, though, was our conjecture that Redbox and other kiosk-based DVD delivery systems might prove problematic for Netflix as the DVD-by-mail company morphed into a streaming media delivery giant.
Turns out the hunch about Redbox was right, and it's affecting not just Netflix but also Verizon and Blockbuster.
Turns out the hunch about Redbox was right, and it's affecting not just Netflix but also Verizon and Blockbuster.
Yesterday's announcement that Coinstar, the "coin-operated" company that runs the Redbox kiosks—among other types of entertainment stations—had tripled revenue for the year and was using some of that cash on hand to buy Blockbuster Express kiosks from another point-of-sale company, NCR of cash register fame.
The news sets the streaming world on edge a bit. The Blockbuster Express name was licensed out to cash-register maker NCR for the kiosk-based system NCR had cobbled together to compete against Redbox. The interesting irony here, of course, is that the Redbox name is now being licensed out to Verizon Communications for the streaming service (in much the same way that the Blockbuster name was licensed to NCR for Blockbuster Express).
The news sets the streaming world on edge a bit. The Blockbuster Express name was licensed out to cash-register maker NCR for the kiosk-based system NCR had cobbled together to compete against Redbox. The interesting irony here, of course, is that the Redbox name is now being licensed out to Verizon Communications for the streaming service (in much the same way that the Blockbuster name was licensed to NCR for Blockbuster Express).
As I mentioned in the KOMO interview around the Netflix debacle of late 2011, the problem with Blockbuster and Netflix is that neither offer—to steal a marketing phrase from Blockbuster—Total Access to their disparate DVD and streaming libraries.
Coinstar might just be on to something, though, with its simple-to-use kiosks popping up all over the USA (34,000 and counting, before the Blockbuster Express units are accounted for). If it can pull off an equally simple approach to streaming in its newfound partnership with Verizon Communications—especially a non-subscription model akin to the kiosk approach—there just might be hope yet for a "total access" option.
Out of all this comes one truth: the days of brick-and-mortar DVD rentals are well past being numbered, but the pax romana of physical DVD rentals is still ahead. Still, the other major difference between Netflix and Redbox is the one-off impulse rental nature of a kiosk delivery—available to anyone passing a Walgreens, 7-11 or Wal-Mart in any corner of the USA—versus the subscription-only nature of Netflix's DVD or streaming models.
Read the StreamingMedia.com article for more details.
Read the StreamingMedia.com article for more details.
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