Why Kiosk Rentals Crush Netflix…
An article about the video rental business made the observation that Redbox is “kicking Netflix’s butt.” According to Michael Pachter, a Wedbush Securities analyst quoted in the article, customer viewing habits are the reason for the dominance of kiosk rentals.
He points to research showing that the vast majority of people watch fewer than 3 movies a month, which means that “Redbox is more competitive if you only watch a DVD a week.”
Another reason is the fact that a Netflix subscription is the type of thing people cut from their budget if they’re worried about job stability, a phenomenon that’s become much more common in recent years in practically every country. But the occasional “splurge” on a low-cost movie rental is still doable.
“There’s a reason Walmart exists,” Pachter says. “People like the value proposition. And that’s the same reason why Redbox exists.”The same reasoning applies to Vidbox, which incidentally, already owns 4,000 kiosks in Mexico and has 150 rolled out now, and many more planned.