I’m not sure if Netflix(or should I say Quikster?) is worried about losing DVD rental subscribers. I think they may be angling to get out of the DVD-by-mail business, eventually. Netflix has a bigger battle to fight, and that is with their online streaming content foes, and it is going to be a tough road.
Some Netflix customers already cancelled their DVD rental plans as a result of the de facto price increase. I think a whole lot more will cancel when Netflix separates the DVD website from the streaming website, and makes it somewhat more inconvenient for customers to make their rental selections.
But, there is a RedBox kiosk seemingly on every corner. Customers can easily log on to the Redbox website or phone app, check movie availability and reserve their copy. It beats visiting a Blockbuster store and hoping they have what you want, when you want it. And getting that movie from Redbox is a whole lot cheaper. For a vigilant and cost-conscious customer, they can get probably twice as many rentals in a month from a Redbox than they would ever be able to get with a mail service, for about the same amount of money. Plus, they can get them when they want them, which means they are most likely going to watch them right away, instead of getting them in the middle of the week and leaving them lying on the counter for a few days.
If the streaming services continue to struggle for content, especially more recent content, they could easily start to see their subscriber numbers fall off, and customers may start using that more Redbox rentals.
Sure, Redbox doesn’t have new releases on day one, but in the current economy, most people aren’t going to suffer through the inconvenience of Blockbuster stores, not to mention the prices, to get them. And customers certainly aren’t buying the new releases, since the latest sales numbers continue to show a downward trend.
I think that at least in the short-term, Redbox is going to make a killing. And if they are smart, they will continue to install those kiosks at every available location to take advantage of it.