Red Box - Can It Long Survive?

 June 2010

One way to rent movies these days is to visit your nearest Red Box machine. For $1 per day you can rent movies.  It's easy to do.  There are over 22,000 Red Box machines scattered around the country.

Red Box is killing the movie rental stores like Blockbuster. Netflix was already doing a pretty good job of that. But even as Red Box takes business from Blockbuster, there is a growing alternative to Red Box that is taking potential business from Red Box. Can you guess what that is?

The answer should be obvious if you're looking at this web site.  It is becoming easier and easier to simply watch movies and TV online.  The number of web sites that are hosting and showing movies and TV shows is growing. What could be more convenient? You don't have to get in your car and drive to a Red Box machine. And there are no late return fees if you watch online. And the selection online is unlimited, while Red Box is very limited.

High speed internet access is becoming more and more prevalent. Free Wi-Fi is showing up in more and more places.  It's not that hard to go to your favorite coffee shop and then watch an episode of your favorite TV show there.  And it is free. It costs you nothing to use their Wi-Fi and it costs you nothing to logon to your favorite web site to watch the show or movie you want... when you want.

What does all this mean to Red Box?  It means that Red Box was a great business idea to take market share from Blockbuster, but Red Box itself is being diminished as a business by cheap internet access and free TV and movies online. High speed internet access is getting less and less expensive each year.  More and more people have access to high speed internet access. The second part of this is that more and more TV and movies are available online... viewers can watch what they want when they want.  Increasingly that cost of viewing is free.  Uh oh... Red Box is in trouble.  How long will it be before Red Box becomes obsolete?  Clear as a sunny day, that obsolescence is coming.