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.