Redbox Strategy Analysis
Introduction
This analysis takes an in depth look at the movie rental industry and more specifically Redbox. Redbox is the only company that has taken advantage of the in-between state of technologies that we are currently in. The movie rental industry has traditionally been, renting hard copies of movies in brick and mortar stores with thousands of retail titles. Technology has advanced so fast that it is clear to see that the future of home movie rental lies in wireless downloads and streaming movies instantly. However, the success in the movie rental industry is not solely determined the method of renting and technology. After investigating the movie rental industry and gathering a greater understanding of Redbox and their strategies, the recommendations for Redbox will conclude this case study.
Discussion
The Internet age brought about a newfound ease and convenience for gathering information and watching movies. The convenience of the Internet is just the beginning as Farhad Manjoo says, “where the movie-rental business is going and you will hear one thing: digital streaming. Amazon, Apple, Netflix, the cable companies, and many startups are gearing up to send every movie to your home on demand.” (Manjoo, 2009, pp. 3). Wireless movie technology is being stifled because of Hollywood’s outdated licensing structure. Redbox is positioned perfectly because it is an in-between technology, bridging the gap between disc rental and digital download of movies along with streaming of movies online (Manjoo, 2009, pp. 3). The technology that is packed inside each kiosk is the key to the low cost of running and maintaining their machines, which as Mitch Lowe explains in Manjoo’s article "That's the most intere...
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...hat can endure for some time. The only question is if they will adapt their business offerings along side customer desires.
Recommendations
Redbox must transition their business to wireless renting, downloading movies, and streaming to remain profitable long term. For the near future they need to expand how many movie titles their kiosks can hold. Otherwise they should keep doing what they are doing.
Conclusions
I have concluded that Redbox is near maximizing the profitability of their business model. Farhad Manjoo sums up the health and future very well,
Manjoo (2009) By the time GM launches its plug-in Volt, Toyota will have been selling the gasoline-based Prius for a decade. Sure, it's unlikely Redbox will survive the transition to streaming; its chief assets -- all those kiosks -- will suddenly become a liability. Until then, it'll take what it can get.
In 1985, Blockbuster opened its first store in Dallas, Texas. After the first few stores opened, founder David Cook built a six million dollar warehouse, which could pull and package multiple stores in a day. Blockbuster’s ability to customize a store to its neighborhood, loading it up with films geared specifically to demographic profiles in addition to the popular new releases, and a sizable collection of catalog titles. Blockbuster had instant success. In the early 1980’s and 1990’s Blockbuster put neighborhood mom and pop video stores out of business by offering better selection and convenience. However, success like that enjoyed by Blockbuster can foster arrogance. For Blockbuster, arrogance meant they believed they could do anything within their stores. For example, Blockbuster purchased Sound Music and Music Plus chains. This move took Blockbuster from movies to music. Secondly, this Blockbuster Music meant they were no longer renting now they were selling.
The video rental industry began with brick and mortar store that rented VSH tape. Enhanced internet commerce and the advent of the DVD provided a opportunity for a new avenue for securing movie rentals. In 1998 Netflix headquartered in Los Gatos California began operations as a regional online movie rental company. While the firm demonstrated that a market for online rentals existed, it was not financially successfully. Netflix lost over $11 million in 1998 and as a result significantly changed the business model in 2000. The new strategy included focusing on becoming a nationally based subscription model and focusing on enhancing the subscribers experience on their website. The change in strategic focus has allowed Netflix to grow into the largest online entertainment subscriptions service in the United States with over 6.3 million subscribers (Netflix).
...verything in the consumer’s home. Many techies would love to have a box that stores security video, TV, internet, photos and music. Make that Wi-fi and Bluetooth enabled so that they can access it anywhere in the world and you could be on to something bigger.
As advance technology of fiber-optic developed and is on the rise, everyday there is another story about entertaining movies on demand and streaming online is with ease. Those developments which let movie’s viewers sit in the comfort of their home or anywhere with access to the internet can stream instance movies with a push of a bottom. They no longer need to make a trip to the movie’s stores for movies rental and return, so that is why movie shops fail and filed for bankruptcy bring a symbolic close to the “let’s go rent a movie” era. Blockbuster LLC, formerly Blockbuster Entertainment Inc., both owned and franchised American-based giant provider of home movie and video game rental services through video rental stores, later adding movies by mail, streaming online and video on demand. Due to the peak of fiber-optic and competition from companies such as Netflix, Redbox, and GameFly, Blockbuster became the victim of digital media and filed for bankruptcy on September 23, 2010 due to significant lost in revenue.[3]
? Charging a monthly fee for unlimited rentals, Netflix eliminates due dates and late fees, as well as eliminating the long lines of a brick and mortar store.
In Conclusion, the SWOT analysis shows that Redbox has many strengths to be profitable and has the potential for future growth in the industry. The DVD movie rental industry is still s...
The twenty year journey of Blockbuster has not been without bumps, valleys, road blocks, and detours. Blockbuster has come under legal fire from Netflix, a major online competitor, the Free Trade Commission for attempting a host...
The best companies embrace change and make plans to create a future for their business like Amazon did. Amazon did not have to wait very long for their strategy to take affect because that the way that the future of business was going. All they did was waiting until the demand flourished and took over the book giant’s like Barnes and Noble and Borders market share. This proves that Amazon did their research and plan accordable so that their demand matches their supply. This also shows the type of value chain process and evaluation that they did in order to continue to conduct business which is quite genius. Their demand has increasable giving them many opportunities to expand. ...
The Digital Video Recorder used in modern entertainment systems can now be replaced with an easy to use streaming video devices. As the online video libraries grow to include more content, eventually streaming set top boxes will provide this functionality, without the need to schedule recordings or manage space used by previous recordings. One additional advantage, often referred to as TV Anywhere, allows viewing of online content from a variety of devices, as long as an Internet connection is available. Now the real motivation that drives many Americans to consider these alternative options is money.
It is more or less predictable that Harrods will have a long-lasting success in the retail industry as some people look for the high standard products. Despite the different everyday challenges that Harrods has to face, Harrods is still looking forward to an expansion while maintaining a strong relationship with their customers through different kinds of means.
... this and their marketing strategy will be key if they are to remain viable, grow and compete in the market.
Reed Hastings, co-founder of Netflix headquartered in Los Gatos, CA, began the company’s operations in 1997 after receiving an enormous late charge from a movie rental he returned long overdue. However, Hastings had the desire to be different than traditional movie outlets; whereas, customers had to drive to the location, pay a certain amount for each movie they rented, and were given a deadline in which to return the movie. Instead of using a method established by other video markets “to attract customers to a retail location, Netflix offered home delivery of DVDs through the mail” which eventually led to a booming business towards streaming forms of entertainment (Shih, Kaufman, & Spinola, 2009, p. 3). Today, Netflix exists along with several competitors; however, offers the most streaming content available for viewing, and continues to grow its subscriber base both domestically and globally. Although, direct and indirect competitors, acquisition costs, and several barriers present a financial threat for Netflix, the company has managed to grow with the acclamation of partnerships, expand to international territories, and vastly increase its price in shares of stock.
According to the history of movie rental, home video, and gaming, Netflix was the first company to introduce the movie rental service back in April of 1998 and offered more than 900 titles (Lardener, 2010). Ever since, the industry has become larger with new technology such as online streaming and next day delivery. Also, more competitors are now available and provide the same services, such as Amazon, Wal-Mart, blockbuster, and Redbox kiosks.
A movie theater has its advantages and disadvantages. One advantage is that people can see the showing of different movies that have been newly released. The disadvantage is that, that is all there is to it and nothing more. At home, you can control the variety and ways to watch a movie. People buy many movies to watch at home and it can be anything at any time even at any place. The only bad thing about it is that they cannot see any of the newest released movies that recently came out in theaters. There are two types of ways people watch movies at their homes. One way is people already own DVDs or have bought many of them and start watching them in their DVD players. The other ways are streaming a movie through the internet. For this to happen, people would mainly buy the monthly subscriptions such as Netflix, Hulu, or Amazon Prime. Through this subscription people do not only watch movies in their homes but they also watch television shows. The only downside is there is a very limited number of movies added onto these
In today’s technology boom, the new waves of doing business have transformed the way people shop and live. The same happened the way people access personal entertainment. With Internet, people can stream movie online without have to go theater, or the rental movie box.