Screenhead

You may wonder what exactly would be wrong with those big red movie rental kiosks whose ilk now controls fully nineteen percent of the movie rental market.  It’s not the ease of use that has the studios so plainly terrified.  Nor is it the low cost, or their sheer ubiquity.

No, it’s all about the timing that’s got the studios panicking.

See, Redbox basically tries to get its movies when they’re released to stores.  Typically there’s a bit of a lag in there, forcing early adopters to buy the DVD first for anywhere between twenty to thirty dollars.  But, especially in a down economy, people looking for a low-cost alternative are more likely to take it.  And they’ve found that low-cost alternative in Redbox.

Pay a buck to rent the brand-new DVD or twenty five to buy?  Well, it’s clear what most will want to do.  And that’s what’s got the studios burning.  Sure, they make some cash selling the DVDs to Redbox, but Redbox turns around and rents them out.  For every rental, the chance increases that the renter won’t buy the movie himself.  This means huge losses to the studios.

Redbox, for what it’s worth, is responding with antitrust lawsuits and plenty of charm offensive of its own.  Whether or not this will do them any good remains to be seen, but we’ll definitely be keeping an eye on it.