Redbox, the company that operates DVD rental vending machine across the US, reported a decline in sales, according to the fourth quarter financial report by it’s parent company Coinstar (CSTR).
The company cited several reasons for the lower sales numbers, with the most prominently discussed reason being the new stipulation from movie studios to delay Redbox rentals of new DVDs until 28 days after they’ve been released. Essentially, this means when a new movie gets released to DVD, you can buy it through retail stores, but you cannot rent it for almost a month.
Also mentioned in the financial report as reasons people weren’t renting as many movies from Redbox, was because the movies they wanted were unavailable due to people returning popular DVDs to a different kiosks than they originally got the movie from.
The only thing that was missing from the report was the looming competition from streaming media, which has no doubt taken a huge bite out of their customer base. Netflix has some of the same 28-day rental restrictions as Redbox, but their subscription base (as well as their stock price) is on the up.
How are you watching movies in 2011?
[Source: The Seattle Times]