Description:
Redbox Automated Retail LLC (stylized as redbox.) is an American video rental company specializing in DVD, Blu-ray, 4K UHD rentals, and formerly video games via automated retail kiosks.For other uses, see Red box (disambiguation). Redbox Automated Retail, LLC. Redbox Automated Retail LLC is an American video rental company specializing in DVD, Blu-ray, and 4K UHD rentals via automated retail kiosks. It Automated Retail, LLC. Redbox Automated Retail LLC (stylized as redbox.) is an American video rental company specializing in DVD, Blu-ray, 4K UHD rentals, and formerly video games via automated retail kiosks.
Redbox entered into an agreement with Warner on February 16, 2010, followed by Universal and Fox on April 22, 2010. In the agreements, which settle Redbox's lawsuits, Redbox agreed to not make available for rental films from these studios until 28 days after their initial home-video releases. It continued to sign additional and new distribution deals with these and other movie studios; by 2017, titles from Fox and Warner became available on Redbox seven days after their initial home-video release.
Redbox Automated Retail LLC was initially started by McDonald's Corporation business development team. Originally the kiosks sold convenience store products under the name Ticktok Easy Shop, however in late 2003 McDonald's ended its use of the kiosks for these products. Instead, Gregg Kaplan decided to use the kiosks for DVD rentals which was tested in Denver in 2004. The company also employed a ‘return anywhere’ policy, different from competitors, which allowed consumers to return their rental to any Redbox kiosk, not just the one from which they originally rented the unit. Kiosks rented both films and video games.
In 2005, Coinstar bought 47% of the company for $32 million, after unsuccessful attempts to sell half the company to Blockbuster and Netflix. In early 2008, Coinstar exercised an option to increase its share from 47% to 51%. In February 2009, Coinstar paid McDonald's between $169 and $176 million for the remainder of the company. While traditional brick and mortar rental stores were closing at a high rate, Redbox moved into existing retail locations such as supermarkets, and placed kiosks within them or outside of them in order to gain that consumer base.
The company surpassed Blockbuster in 2007 in number of U.S. locations, passed 100 million rentals in February 2008, and passed 1 billion rentals in September 2010. Current and former competitors include Netflix, Blockbuster, Movie Gallery and its subsidiary Hollywood Video, West Coast Video and Family Video along with other DVD by mail rental services. In Q2 2011, kiosks accounted for 36% of the disc rental market, with 38% of that attributable to rent-by-mail services and 25% to traditional stores, according to the NPD Group. As of Q2 2011, 68% of the U.S. population lived within a five-minute drive of a Redbox kiosk. The numbers for Q2 2013 shows that the Redbox rentals had surpassed 50% of the total disc rentals in the country.
Mitch Lowe joined Redbox in 2003 after spending five years as an executive at Netflix. At Redbox, he started first as a consultant and then as VP of Purchasing & Operations. In 2005, he became the Chief Operating Officer of Redbox. Lowe owned and operated a video rental company named Video Droid from 1982 through 1997. Video Droid attempted a VHS rental vending machine concept, though the idea was quickly deemed impractical. Lowe was named President of Redbox in April 2009.
With growing concern in 2009 that DVD kiosks might jeopardize movie studio income from DVD sales and rentals, three major movie studios, 20th Century Fox, Warner Bros., and Universal Studios, separately refused to sell DVDs to Redbox until at least 28 days after their arrival in stores. Fox and Warner Bros. represented 62% of home video rental revenue in 2008–09. Redbox responded by filing lawsuits, first, against Universal in October 2008, then against 20th Century Fox and Warner Bros. in August 2009. In August 2009, the federal judge hearing the Universal case allowed an antitrust claim to continue. In October 2009, 20th Century Fox and Warner Bros. filed motions to dismiss Redbox's lawsuits against them. During this time, Redbox continued to rent films from these companies, purchasing them retail from places like Walmart instead of receiving them from the movie studios, which in some cases saved Redbox in costs due to the discounted prices offered by retailers. Other major studios — Sony Pictures, Paramount Pictures, and Lionsgate — signed distribution deals with Redbox.
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