There’s a very interesting article published today in Video Business that shares that Redbox is testing what happens if it sells DVDs through end-user kiosks.
Wow.
Apparently they’re tapping a new kiosk design that’s black, not red, and have the Vidigo brand banner (though not for long as there’s already a TV production company by that name at vidigo.tv), but they’re not at the same price point as the $1/night Redbox rentals. Instead, they’re going to be $19.96 and $20.95, depending on title.
At that price point I don’t imagine that they’ll find much business as it’s cheaper to go to Target or Wal-Mart and buy at their discount prices (typically $13.99-$16.99), but then again, is it worth a few dollars to complete the transaction at the local convenience store? Maybe.
In addition, Redbox is also testing both video game and Blu-Ray disc rentals through its bright-red video rental kiosks, though I certainly haven’t seen that at the Redbox units I’m aware of in my community in Colorado.
The interesting timing here is that the major studies are starting to complain that the $1/night rental price is cannibalizing their DVD sales, clearly something that’s impacted the pricing strategy of the Vidigo systems. Will that cause the studios to chill out? Well, the Redbox execs told Video Business that they have data that indicates a typical Redbox renter bought, on average, 3.3 new and 1.4 used DVD discs in the previous six months, versus non-Redbox renters who bought 3.1 used and 1.2 used discs in the same time period.
Of course, that’s correlational data so there might well be a separate explanation, but still, it’s certainly interesting that people who tend to rent DVDs also tend to buy them more than the average person.
Back to the point, though: point-of-sale physical DVD kiosks at $20/unit? Very interesting, but way too little, too late, given the shift to digital distribution. But what do you think?