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Movie Rental & the RedBox Strategy

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Renting movies has been part of out culture for more than a couple of decades.

As a matter of fact, I remember when the line of "Make it a Blockbuster night" was at its peak, and nobody would even think about going anywhere else. Well, as of yesterday, Blockbuster (BB) might have to ask for Chapter 11 help, bankruptcy.

The following is a quick excerpt from USA Today:

"Blockbuster ended 2009 with nearly $1 billion in debt. The chain that once made Hollywood moguls tremble saw its net loss rise 20.7% to $437.7 million in the fourth quarter on revenue of $1.1 billion, down 17.5% from the same period in 2008.

This year continues to look gloomy. Faced with growing competition from Redbox's $1-a-night DVD rental kiosks, Netflix and a host of Internet and cable video-on-demand services, Blockbuster says that sales at its stores open a year or more will continue to fall in 2010."

I used to be a BB member (store only) in El Paso, then moved to Lubbock and became a Hollywood video member... moved to Dallas (then to San Antonio) and graduated to BB Online. One day when planning how I was going to tackle debt, I cut BB Online - it would be my reward when I achieved my goals. Then comes to the picture RedBox (2009). I said, well, its only $1 and pretty convenient, I will give it a try. I might add that I knew this was happening a couple of years ago, when I was working for one of McDonald's ad agencies, and this concept kept coming up in meetings. I tried and I liked - redbox doesnt have late fees, they have additional rental day fees ($1), nice!

So I tried redbox for a couple of months, and when I achieved one of my set financial goals, I decided to treat myself to becoming a member of an online rental provider. After carefully evaluating both options, BB and NetFlix, well, the latter was the option.
By now you are thinking so what is the point of your story?? well good question.

The point of the story is that redbox understands their consumer and how people are using them - they know they are the other person, and they are ok with that. Not too long ago, I received the promo email you see here saying:
"For a limited time only, enjoy a free one-night rental when you use the promo code..... hurry - this offer expires at 11:59pm CST on Monday, March 1, 2010."

Now what I love about this promo is that it was sent on Sunday very late at night, so it has a very specific call to action, and with a due date. What is even better, is that all new releases come out on Tuesdays, hence the pressure to rent on Monday... so, when you are returning the movie on Tuesday, you will be inclined to rent the "new release."

Now, Tuesday is when things start to get busy for the week, so it is safe to assume that you will have to keep the movie for maybe one or two extra days... giving redbox the dollar that was given to you on Sunday - Nice isnt it?!

Thoughts?!

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