Hey all…I don’t know about your areas, but in my neck of the woods, Red Box DVD boxes are taking off like crazy.
The customer rents a DVD from the box for $1.00 a night and returns the next day. It is completely “cash-less”, using debit cards to allow the customer to rent.
We have 2 in town…one at Wal-Mart and one at Walgreens, and there is a line of customers there any time I pass by either location.
Imagine if those customers knew your pizza joint had one inside. Some carefully placed menus and grab n go items (like sodas, TNB’s, or by the slice ops, etc), and maybe you could increase your revenues?
I don’t know of any pizza joints here that have one, but I’m always looking for ideas to increase revenue, even if I’m not a store owner.
So, I don’t know a thing about Redboxes, but they seem to at least draw a crowd, and where there’s a crowd, there’s money making potential.
I did some research on this about a month ago. Redbox wants you to serve at least 15,000 customers per week before they’ll consider placing a machine. They own it, maintain it and keep all sales - there is no revenue share with the location it is placed at.
You don’t have the option to purchase or lease one, so you have to meet their traffic requirements. It would be very difficult for them to break even on a machine in a location without massive foot traffic already in place.
On a tangent, digital delivery is gaining momentum and is mostly likely the future. I’ve been using Comcast’s OnDemand for several years, and now my Tivo can stream HD movies from both Netflix and Amazon. Xbox users can do the same. How long until our broadband connections make physical rental completely obsolete? I’m not sure exactly, but I think it could be soon enough that I wouldn’t be looking to drop $30,000 on a Redbox.
I can’t believe they don’t share revenue. Why would Wal-mart want this box taking up space in their store if they’re not making something off of it. It’s not like they need more people to come in. :evil: Or, maybe that’s what RedBox is telling the little guys so they don’t get bothered by them.
Walmart is looking for impulse purchases from people coming in for their movies. They only take up about 10 square feet; Walmart isn’t out all that much.
It’s the same deal with the McDonald’s locations. The franchisee doesn’t make a penny - it’s there to generate an impulse purchase (in theory anyway.)
It is possible, walmart has a share in thier company, total speculation but you never know. In the walmart close to me they put it where the scooters were and were in the way. They move the scooters where they should be and put that in next to the claw machine.
DVDNow was their major competitor June 2007 when I was researching. They are a different business model wherein the local franchiser pays a chunk for all the connectivity, machine and reorder costs. As I recall the costs were way more than I cold recover in my tiny market, but not so much for you big traffic places . . . I cannot recall actual numbers.
I think the cable companies need to take a lesson from Red Box and sell their movies for 99 cents instead of $4.00 per rental. THAT is why Red Box machines are even able to pop up in the first place, because they undercut EVERYONE in the market.
Next thing you know there will be pizza and beer machines outside Walmart…lol…
PS…We have www.zip.ca in Canada…Mail order dvds…Not quite as convenient as local shops but 50x more selection and half the price…We use it mostly for old tv series and obscure movies…
Royce, in US Netflix.com is the big mail order movie company. They also have direct view online to see TV/Movies unlimited anytime day or night right on your computer . . . or buy a $100 piece of hardware and play right on the television.
we also thought of adding a DVD kiosk as well. however, after simple mathematics it just wasn’t worth it. It’s more than just having a machine in or outside the store you actually have to be maintain it w/ new release DVDs every tuesday which can be expensive since you have to purchase multiple copies. and eventhough digital download is still at least a couple years away from fully gaining traction, it’s certainly eating up the share of the home video market that will eventually make machines like these obsolete.