The DVD isn’t dead yet: Sales surge at Redbox kiosks

Movie streaming and digital downloads may be rising in popularity, but it looks like many of us aren’t quite yet ready to give up on good old-fashioned DVDs — even if we aren’t going inside a traditional movie rental store to get them anymore.

DVD kiosk venture Redbox saw its sales rise nearly 39 percent to $503 million in the first quarter, according to the latest numbers from its parent company, Coinstar, the Bellevue-based automated retail company.

Redbox was helped in part by its price hike last year, which increased the rate for overnight rentals to $1.20 from the previous $1. The company says consumers have accepted that increase.

Also helping was growth in DVD sales at existing locations, the installation of new kiosks, and strong performance of new releases.

In addition, as noted by news site PaidContent.org, Redbox appears to be benefiting from the decline of Netflix’s DVD-by-mail service. After a series of missteps last year, Netflix has seen its domestic DVD subscribers decline to 10 million from nearly 14 million in the past six months, even as its digital streaming subscription numbers have risen.

Redbox, meanwhile, is expanding its DVD business with the $100 million purchase of assets from NCR, including Blockbuster Express kiosks.

However, Redbox won’t be counting on DVDs exclusively. The company has entered into a joint venture with Verizon that plans to combine online movies and DVD rentals in a unified subscription service. It’s scheduled to roll out later this year.

Coinstar is also looking to expand the Redbox brand to additional types of automated retail kiosks, including upscale coffee machines.

  • Guest

    We expect to see Redbox’s DVD kiosks move towards a “burn on demand” model. Simply stated, the kiosks will be able to burn one of thousands of films to a disc. This will vastly improve selection and profitability.

    Thank you, Coinstar, for continuing to innovate.

  • http://www.intrinsicstrategy.com/ FrankCatalano

    I’m one of those consumers who moved from Netflix DVDs to Redbox DVDs for current movies after Netflix’s unapologetic separation of, and dramatic increase in prices for, its DVD service. Kept Netflix streaming. But found Redbox is cheaper than digital-on-demand services for current movies and is very convenient, even allowing online reservations at no extra charge, and return to any Redbox kiosk (not just the one when you rent it). Nice model and probably a good business for as long as there’s a large installed base of DVD players — at least until first-run digital film rentals drop in price dramatically.

  • guest

    I have a dvd/blu-ray kiosk .. its just the start. red box watch out!!!