Redbox is currently the leading DVD and video game rental companies in the United States. Their primary model focuses on automated teller machines – ‘kiosks‘ – placed in thousands of convenient locations which hold the latest DVD’s and video games ready to be rented at any time. As of September 2016, Redbox controlled more than 51% of the physical rental market share. One reason this is the case, is due to their attractively low prices.

Here are the latest Redbox prices:

AGE	TICKET PRICE
Movies
Per Day	$2.25
Blu-Ray Movies
Per Day	$2.25
Partners
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On Demand
Per Movie	$5.99
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Redbox’s History

Redbox’s origins date back to 2002, when the McDonald’s corporation first funded Redbox Automated Retail LLC. Surprisingly, the kiosks first offered both movie rentals, as well as various grocery products including eggs, milk, and sandwiches. To begin with, there were four (4) grocery kiosks, and eleven (11) DVD rental kiosks – all placed around the Washington metro area.

Consumers weren’t overly interested in purchasing their food from a kiosk, so Redbox was quick to withdraw them within a year of opening. DVD’s on the other hand, they proved to be a success. Such a success, that they went all in on the movie rental market.

From 2005 to 2009, Coinstar made a series of purchases which ended in them gaining full control and ownership of Redbox from McDonald’s. Altogether, Coinstar paid around $200 million for disc rental company. A number of critical milestones soon followed:

• 2007 – Overtook Blockbuster in total number of locations
• 2008 – Rented out a cumulative total of 100 million discs
• 2010 – Rented out a cumulative total of 1 billion discs
• 2010 – Blu-ray discs added to kiosks
• 2011 – Video game rentals added to kiosks
• 2011 – 68% of the US population now lives within a 5-minute drive of a Redbox kiosk
• 2013 – Redbox holds more than 50% of the total disc rentals in the US
• 2013 – Rented out a cumulative total of 3 billion discs
• 2016 – Rented out a cumulative total of 5 billion discs

As you can see, Redbox is one of the largest DVD rental companies in the United States. One such factor which can be accurately depicted to have assisted along the way is the low prices they offer. Why pay for the full cost of a DVD if you’re only going to watch it once? Why not rent it from Redbox for 10% of the cost instead?

Redbox has tried expanding into international markets such as Canada, but was forced to retreat back to their home ground citing low customer demand as the reason.

Today, Redbox is owned by Apollo Global Management following the purchase from Outerwall for a whopping $895 million. The purchase wasn’t only for Redbox, however, it also include the Coinstar and ecoATM businesses.

Today, many are wondering whether future of Redbox and its position in the physical rental market is bright or dim. How will they position themselves with the ever changing shift to completely virtual transactions? Will Redbox exist in 10 years? We’ll just have to wait and see.

Lawsuits

In 2009 20th Century Fox, Warner Bros., and Universal Studios suddenly changed their agreement with Redbox, refusing to sell them DVDs until at least 28 days after they were made available for sale in stores. They believed the growth of Redbox was hindering their own profits in the DVD sales department.

Redbox was quick to file lawsuits claiming copyright misuse, tortious interference, and antitrust claims by the three companies. The first two claims were quick to be thrown out by the judge, but the third was granted permission to be heard. However, in order to prove the antitrist claims, Redbox had to provide evidence of nationwide collusion between the three companies showing they worked together as a cartel.

In the end, Redbox entered into agreements with the movie companies, settling their lawsuits put forward, and agreeing to not make movies available for rent until after 28 days of being in stores. You can find details on the deal with Warner Bros. here.

Play Pass

Play Pass is Redbox’s take on a sort of loyalty/rewards program for its customers. In its simplest form, for every rental you pay for, you’ll earn 10 points on your Play Pass card. Once you have 100 points, you’ll have enough to take home a movie or video game for one night – for free.

That’s not all – you’ll also be treated to a few surprise prizes along the way such as:

• Free one-night rental on your birthday
• Free one-night rental on the anniversary of you joining Play Pass
• Numerous other special prizes which aren’t listed (that’s what makes them special!)

Keep in mind – the points expire 60 days from earning them – unlike many other programs in which the points only expire after 365 days. So in order to be eligible for a free rental, you’ll have to pay the standard rental price in the table above at least 10 times in two months.

There are a number of other terms and conditions, which you can read about on Play Pass’ about page.

Past Prices

Redbox has been able to maintain its low prices simply because of the dominant hold it has over the market share in the country (larger volume of transactions = lower margins). In the company’s 15 year history, they’ve only increased their rental prices on two (2) occasions. Once in 2011, and another time in 2014.

Here’s a timeline of Redbox’s rental price history:

• 2002 – 2009
  • DVDs – $1
  • Blu-ray – N/A
  • Video games – N/A
• 2010 – 2011
  • DVDs – $1
  • Blu-ray – $1.50
  • Video games – $2.00
• 2012 – 2014
  • DVDs – $1.20
  • Blu-ray – $1.50
  • Video games – $2.00
• 2015 – 2018
  • DVDs – $1.50
  • Blu-ray – $2.00
  • Video games – $3.00
• 2019 – 2021
  • DVDs – $1.75
  • Blu-ray – $2.25
  • Video games – $3.50
• 2022 – Present
  • Regular and Blu-ray DVDs – $2.25 for 1 night
  • Regular and Blu-ray DVDs – $3.75 for 2 nights
  • On Demand – $5.99

As you can see in the list above, prices do regularly increase, so we can expect that trend to continue until DVDs are eventually no longer a thing. Also, their model changes over time as they learn what is profitable. For instance, they stopped carrying games in 2019, and on demand became more of a focus around the same time.

Fun Facts

Busy Bodies

2010 was one of Redbox’s busiest years – they opened a new kiosk every hour on average.

Most Popular

Paul Blart: Mall Cop (2009) was the first movie to be reach the 1 million rentals milestone.

Kiosk Capacity

In each of Redbox’s kiosks – there are around 700 discs of the latest movies and video games.

Today

At the end of 2016, Redbox has rented out more than 5 billion discs, and currently maintains over 35,000 kiosk locations around the United States.

Conclusion

As you can see, Redbox has risen to become a force to be reckoned with within in an extremely small time frame of 15 years. One of the main factors behind their exponential growth has been the ultra-low prices in which they’re able to rent discs out to consumers.

If there is a Redbox location where you regularly shop it makes more sense from a cost standpoint to rent a movie there than to rent one from streaming on any service.

For more information on Redbox, please visit their official website.

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