Redbox's streak of big growth is over: the company says it plans to uninstall more than 500 of its DVD / Blu-ray rental kiosks this year. The move comes after Redbox saw its revenue increase by just 3 percent last year, and The Wall Street Journal says it's not likely to see better results in 2014. But beyond the flat growth, Redbox seems to be running out of new spots for its signature rental machines, having already hit saturation across most major US supermarkets. The company has previously revealed that it operates over 40,000 kiosks.
That clever placement strategy has helped the company find success with its $1-per-day rental model. Since starting with DVDs, Redbox has added Blu-ray and video game rentals, though both cost more than a dollar. Blu-rays made up 15 percent of disc rentals last quarter; video games represent only 3 percent of revenue. Redbox has also experimented with branching out beyond home media at its kiosks, but those tests haven't gone well. The company tried selling concert and event tickets through the machines, but abandoned that idea in less than a year.
Let's just say that Redbox is much better at rentals than streaming
Redbox is preparing to renegotiate its content deals with major studios this fall. In an effort to boost disc sales — which bring in far more money than rentals — many have implemented restrictions that allow Redbox to offer rentals only after a movie has been on shelves for several weeks. Those annoying wait periods haven't caused customers to flee from the service, however.
And while Redbox can claim that it's helped extend the life of physical media, the company is failing horribly at streaming. It's Redbox Instant service — a collaboration with Verizon meant to compete with the likes of Netflix and Hulu — has completely fallen flat since launching publicly last year. Subscribers get added perks like in-store rental credits, but even those bonuses have failed to attract consumer interest. According to the Journal, Redbox Instant has amassed a measly number of customers compared to leading services like Netflix, and there's no obvious formula to help better its chances.