We saw it happen with Blockbuster — the rise of online video services such as Netflix and Amazon hastened the brick-and-mortar retailer’s decline.
Now, is that trend playing a role in the demise of Redbox?
A report from The Wall Street Journal this week certainly signals that things are changing at Outerwall-owned Redbox, with the company planning to uninstall more than 500 of its movie rental kiosks across the country. That comes after the company installed 300 new kiosks at retail outlets last year, down from more than 7,500 new kiosks in 2012.
Redbox operates about 40,000 retail kiosks.
The Journal notes that Redbox’s sales are slowing — up just three percent last year to $1.97 billion— because there are no longer good locations for expansion in the U.S.
But it would seem more is at play here, including a shift by consumers to what’s perceived as much more convenient online services. The Journal notes that Redbox’s attempt to tap into that market through an online service known as Redbox Instant is struggling to keep up with rivals, such as Netflix and Amazon Prime Video.
Outerwall, which owns Redbox and is based in Bellevue, has seen its stock rise 26 percent in the past 12 months. It has a market value of $1.47 billion, and some have suggested in the past that it would make an interesting acquisition target for Amazon.com.
Meanwhile, Outerwall is looking to expand its Exchange kiosks, which allow consumers to exchange unused gift cards into cash. The company also operates the Coinstar coin-counting kiosks.