Redbox's airport take-off slow and steady

PHYSICAL: Coinstar unit gradually expands airport channel

By Danny King -- Video Business, 11/23/2009

NOV. 23 | PHYSICAL: Redbox isn’t looking to redefine the concept of the in-flight movie, at least not quite yet.

The largest U.S. movie-rental kiosk chain is rapidly expanding its machine deployment at general merchandise stores and grocers every year, but it’s taking a far more measured approach with the airport channel.

Since September, Redbox has deployed five kiosks at U.S. airports, including two at Boston’s Logan Airport and two at Cincinnati/Northern Kentucky International Airport, the company confirmed. Redbox, which installed its first two airport kiosks at Nashville International Airport in August 2008, also added a machine at Austin-Bergstrom International Airport in September. The company won’t disclose future plans for airport deployment.

The strategy appears to be a departure from Redbox’s otherwise aggressive expansion plans with its $1 a night rentals. Redbox has led growth in the U.S. kiosk industry, which is expected to expand over the next few years as video store chains such as Blockbuster and Movie Gallery close underperforming stores. Coinstar said earlier this month that Redbox’s third-quarter sales surged 90% from a year earlier by adding 2,700 kiosks and boosting sales per machine by more than 25% from a year earlier.

Walmart, Walgreen’s and 7-Eleven are among retailers that have added thousands of Redbox kiosks either within or just outside of their stores. Blockbuster and ATM-making giant NCR last year agreed to a licensing agreement in which NCR will deploy as many as 10,000 Blockbuster Express kiosks by mid-2010 in an attempt to challenge Redbox.