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Redbox: How influential in DVD purchases?
March 12, 2009

At breakfast just this morning, I was talking with a veteran industry exec about Redbox's virtually pariah status among the major studio home entertainment divisions. He and I, just for the record, were in agreement that since Redbox is one of the only growing accounts in the business, it might be more beneficial for the studios to find a way to work with the giant kiosk operator than to throw up obstacles becuase a they are scared stiff that $1 per night rentals are cannibalizing DVD sales. (And how is it that Redbox can be such a threat to sales, but VOD in the DVD window is not only not a threat, but slightly additive ?)

Then, as soon as I got back to the office, a press release from Redbox popped into my Inbox. It seems that Redbox commissioned NPD to survey its customers and found that Redbox actually influences its customers to buy DVDs. 

Straight from the press release: "According to a recent redbox NPD survey of home entertainment customers deployed in January 2009 and internal data, redbox projects that its customers will purchase approximately 77 million DVDs in 2009, which would account for approximately nine percent of the total DVDs sold this year.  Of these purchases, an estimated 23 million will be the result of a customer trying the title at redbox first and then buying it at retail."

Going further, Redbox says its conversion to purchase is approximately 10 percent higher than for Netflix and Blockbuster renters.

This is a nifty piece of P.R. served up for the studios benefit. A  "look, we're actually helping you sell more" pitch that's a way more cooperative in tone than the antitrust suit Redbox slapped Universal with recently when Universal tried to deny the kiosk operator new release product on street date. Guess it wouldn't hurt for the judge in that case to get a gander at the press release, either.

Of course, the press release doesn't say how many Redbox customers rented in place of purchasing a DVD...
 

Posted by Marcy Magiera on March 12, 2009 | Comments (0)