Redbox Owner Interested In Buying Netflix's DVD Business (hollywoodreporter.com) 56
Redbox CEO Bill Rouhana told The Hollywood Reporter that he'd like to buy the business, saying: "I wish Netflix would sell me that business instead of shutting it down." From the report: Redbox is already the biggest DVD rental company in the U.S., with a network of some 32,000 red DVD kiosks across the country. Just this week, it announced plans to add another 1,500 kiosks at Dollar General stores (Rouhana says the Dollar General kiosks are some of the company's most profitable). While the DVD business kickstarted Netflix's meteoric rise, in recent years it has been on the decline. In 2022, it had $146 million in revenue, down $40 million from the year prior. Q1 had revenue of $32 million, suggesting a further decline this year.
And Rouhana says he has reached out to Netflix over the years expressing a desire to acquire the DVD business, to no avail. "I have tried like three or four times to reach out to the corporate development people about it but just got rebuffed each time," Rouhana says. "So when I saw it being closed, I thought, 'Well, maybe they'll do it now.'" A Netflix source tells THR that the company is winding down the business, and not selling it. (As for what happens to those warehouses full of DVDs that fueled Netflix's red envelope business, they seem to be in limbo for now.)
Even if that is the case, Rouhana says he believes Netflix's decision to shutter the service will benefit his company. "This could be a great boon to us because now there are a whole bunch of people who are going to look for a new place to get their DVDs, and we're close to 90 percent of them based on where our kiosks are located," he says. And, he notes, he does not expect the DVD business to go away anytime soon. "We believe in it, and we believe it's going to be around for a while. Like most legacy things, it's a lot harder to kill them than people say, I believe," he adds.
In fact, he believes the DVD business is in a position for growth over the next few years, thanks to a larger slate of movies hitting theaters and a desire from studios to reengage with windowing strategies. "We programmed our business plan for us to get back to about 30 percent of the 2019 level," Rouhana says. "I feel that's pretty conservative, I think we'll be better than that. But, you know, that's how we built the business plan that we've articulated. So people can decide for themselves whether they think that's overly optimistic or overly pessimistic."
And Rouhana says he has reached out to Netflix over the years expressing a desire to acquire the DVD business, to no avail. "I have tried like three or four times to reach out to the corporate development people about it but just got rebuffed each time," Rouhana says. "So when I saw it being closed, I thought, 'Well, maybe they'll do it now.'" A Netflix source tells THR that the company is winding down the business, and not selling it. (As for what happens to those warehouses full of DVDs that fueled Netflix's red envelope business, they seem to be in limbo for now.)
Even if that is the case, Rouhana says he believes Netflix's decision to shutter the service will benefit his company. "This could be a great boon to us because now there are a whole bunch of people who are going to look for a new place to get their DVDs, and we're close to 90 percent of them based on where our kiosks are located," he says. And, he notes, he does not expect the DVD business to go away anytime soon. "We believe in it, and we believe it's going to be around for a while. Like most legacy things, it's a lot harder to kill them than people say, I believe," he adds.
In fact, he believes the DVD business is in a position for growth over the next few years, thanks to a larger slate of movies hitting theaters and a desire from studios to reengage with windowing strategies. "We programmed our business plan for us to get back to about 30 percent of the 2019 level," Rouhana says. "I feel that's pretty conservative, I think we'll be better than that. But, you know, that's how we built the business plan that we've articulated. So people can decide for themselves whether they think that's overly optimistic or overly pessimistic."
It's a business model (Score:5, Insightful)
Not everyone lives in areas with cable or fast internet connections. So it might seem odd to a lot of us, but they can watch movies without some of the conveniences we take for granted.
I think we get it (Score:1)
Re:I think we get it (Score:4, Insightful)
It's just hard to understand why Netflix wouldn't like to get some ROI on the existing customer list and infrastructure.
There is more potential value in converting the DVD-by-mail customers to streaming customers than in selling the business unit to a competitor.
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Although I have insanely fast streaming from Spectrum, it is currently way more expensive than getting a DVD or Blue Ray thru the mail for a $21+/mo subscription that lets me have 3 disks at the same time. And when near a population center like DFW, turn-around seems around 3 days, rather than a week like I moved away from last year in Virginia.
So, if Redbox falls to shipping disks thru the mail, they've got me. If I can order the disk to pick up at the box outside CVS, they've still got me, if either o
Re:I think we get it (Score:4, Insightful)
From what I gather, most of the remaining rental-by-mail market involved people who like shows and movies that streaming sites don't carry, e.g. obscure foreign anime series. That also means that their shutdown probably won't help Redbox much. If anybody benefits, it will be Amazon (if the DVDs are available for sale) or piracy sites (if they aren't).
But I could easily be wrong.
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Netflix still offered stuff on DVD that had been siloed by studios running their own streaming services. Pretty sure you could get Disney stuff through Netflix DVD, for example. I could be wrong about that specific instance but you get the idea.
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From what I gather, most of the remaining rental-by-mail market involved people who like shows and movies that streaming sites don't carry, e.g. obscure foreign anime series. That also means that their shutdown probably won't help Redbox much. If anybody benefits, it will be Amazon (if the DVDs are available for sale) or piracy sites (if they aren't).
But I could easily be wrong.
Agreed!
We rent DVD's of classic movies you cannot find anywhere but on Netflix DVD. We also stream Netflix. Now I don't see any reason to stay locked into Netflix as I was previously was. I can dump then do Hulu for awhile and then come back later when a new series that interests us comes out.
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There are RedBox DVD rental kiosks in a number of local convenience stores. People rent them. Apparently enough to make money for RedBox.
Not everyone lives in areas with cable or fast internet connections. So it might seem odd to a lot of us, but they can watch movies without some of the conveniences we take for granted.
Indeed, and not just areas lacking good Internet availability. I saw someone using a Redbox kiosk outside a 7-11 here in Virginia Beach last week. There are also kiosks outside (at least) several grocery stores in the area.
Re:It's a business model (Score:4, Interesting)
I have 250 Mbps fiber, but we'll still rent an occasional DVD at Redbox.
Some of us don't want to sign up for every streaming service. Some of them require a Widevine level not available for Firefox on Linux.
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I have 250 Mbps fiber, but we'll still rent an occasional DVD at Redbox. Some of us don't want to sign up for every streaming service. Some of them require a Widevine level not available for Firefox on Linux.
That's a really good point. When I look at all the available stream services - I could make my cable bill a $1000 dollars a month est.
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Some of them require a Widevine level not available for Firefox on Linux.
Yet another reason to dislike Google. DRM is of the devil.
Re: It's a business model (Score:4, Insightful)
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The medium is reliable but a lot of the hardware is trash. Too bad Blu-ray on PC was killed by a reliance on an Intel feature that no longer exists. Either way, I just illegally format shift with MakeMKV. I want the ownership and convenience but discs and especially players are slow.
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RedBox is probably the cheapest way to see many newer releases. I don't use RedBox very often, but I got the most recent Spiderman movie from RedBox a few months ago. Renting it digitally would have been way more expensive and I knew that getting the disc would give me better video quality.
But yeah, it's a niche. It probably would have jived well with the Netflix disc-by-mail service because they would have been able to offer free pick-ups at kiosk. The downside of the kiosks is that there's a relativel
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The number of them has decreased significantly though - they used to be everywhere, now I can't remember the last time I saw one. I know they're around, but I haven't seen any in my local ar
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Personally, I'm more interested in Netflix's DVD library than their ephemeral and/or walled-garden streaming content. Dropped Netflix streaming some time ago, but kept the DVD subscription.
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Especially in BluRay quality for newish releases.
Re:It's a business model (Score:4, Insightful)
Not everyone lives in areas with cable or fast internet connections.
I have a fast internet connection - and yet I rent a lot of physical BluRay and UHD discs. Quite simply because the "streaming" bandwidths are so low (not because of my Internet connection, but because of the streaming companies cost saving measures) that their video quality is just abysmal at times. Plus the idiotic market separation into an ever growing number of streaming services, all of which ask for a monthly fee for their tiny catalog, is quite expensive in comparison. Plus I am entirely not interested in "series", only in movies.
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Why buy? (Score:2)
The DVD customers will find you, you don't need to buy them.
Re:Why buy? (Score:4, Interesting)
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Also, probably favorable USPS contracts.
Are the still renting SD DVDs? (Score:2)
Are the still on DVD or are they now on Blu-Ray?
DVD is standard definition and thus appears hellishly blurry on all current HD televisions.
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the kiosks have DVD, Blu-Ray and some 4K Ultra HD Blu-Ray
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I still watch DVDs. I care more about the plot of the movie than the screen resolution, and DVDs get the job done. I never cared enough about resolution to buy a Blu-Ray player. I suspect if I looked at Blu-Ray movies a lot, I'd learn to dislike DVD, though.
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Sometimes I've seen 4K movies, not on my gear, and it gives a "soap opera" feel to a movie to see actors' every pore, every thread in clothes, every hair on arm, etc. It's a weirder look that even theater doesn't give.
So I'm not a fan
What will happen to the DVDs? (Score:3)
Re:What will happen to the DVDs? (Score:4, Funny)
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If Redbox or someone else is offering to buy something that Netflix wants to destroy / throw away, and Netflix refuses, I think Netflix's shareholders may have something to say about that.
Unless Netflix has info that Redbox or whoever bought it will become a competitor to Netflix. Which seems unlikely with Redbox considering Redbox is not into streaming (from my understanding).
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Good riddance (Score:1)
Netflix's physical media by mail service might've been better back in the day, but I tried using it a few years ago to fill in the gaps in my media server's collection for movies that weren't available on the high seas, and it was soooo slow. Movies would sit in my queue for an eternity, and I even had a few get cancelled because Netflix couldn't find the disc. I eventually just said "fuck it", cancelled and legitimately purchased used copies of what I was looking for from eBay.
I also bought an Elgato HDM
Re:Good riddance (Score:5, Informative)
That's because Netflix was coasting on old stock for years. They didn't replace bad media. And they no longer had enough subscribers to justify even buying more discs.
Redbox could upgrade their machines to allow disc returns for a DVD by mail service and cut the turnaround time in half. A hybrid subscription with local pickup and dropoff might be really good. But they'd probably kill off most of the depth of the catalog that made the Netflix DVD service good in the first place.
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My experience was that Netflix's physical rental service is already essentially useless. You'll honestly have better luck just going the eBay/Amazon route and buying discs you can keep, rather than waiting literally months for your queue to be fulfilled.
IMHO, it really seems like Netflix took a "gym membership" approach with how they've been handling the service over the last few years. They're getting by hoping people don't realize they're still paying for something that they rarely utilize.
As for Redbox,
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what they really need are kiosks that can burn your rental onto blanks. Copyright law be damned, that would solve a lot of title availability problems.
It was called DIVX [wikipedia.org]
I am Shocked SHOCKED (Score:1)
Re: I am Shocked SHOCKED (Score:1)
Back-catalogue requests (Score:2)
No (Score:3)
>"This could be a great boon to us because now there are a whole bunch of people who are going to look for a new place to get their DVDs, and we're close to 90 percent of them based on where our kiosks are located,"
Sorry, not enthused.
I am not going to drive to some seedy place (7-11) every time I want a movie.... to a "box" that has a selection of what, only 70? (I counted). If you did offer a mail service, and decent selection and price for BluRay rentals, I will consider your service.
I expect the majority of the Netflix Disc customers probably concur.
Are they also going to invest in VHS/Beta Max... (Score:1)