Monday, September 29, 2014

Market Penetration As Redbox Resurrects DVD Rentals to Canadians

A lot of giant red boxes have been popping up lately in grocery stores, gas stations and convenience stores across Canada. They’ve arrived at Tim Hortons and Shoppers Drug Mart too.

They’re the new face of DVD rentals, a business that continues to hang on even after the big box video stores faded to black.

Since 2012, the Redbox DVD rental business that has enjoyed huge success in the U.S., has been making inroads north of the border, particularly in major urban centres. The bright red kiosks are being installed at the exits of well-known shopping and snacking spots, filling the void left behind by the demise of DVD rental chains like Blockbuster and Rogers, says Ron Cihocki, country manager for Redbox in Canada.

The estimated $1 billion video rental industry in Canada has undergone a major shift with the emergence of online streaming companies like Netflix and iTunes plus video-on-demand offered by cable companies, and now through these bright red vending machines.

Canada is the third largest DVD rental country after the U.S. and Japan so it only makes sense to grow the business here, says Cihocki.

When the company first started in the U.S. 12 years ago, Blockbuster was going strong “with customers paying big dollars and huge late fees,” he says.

In contrast to the old-school video stores that took up thousands of square footage with row after row of movie titles, Redbox is essentially a fully-automated video rental store contained in 12-square feet of retail space.

There are 1,350 across Canada now, and every box has 200 of the newest movie titles available and 800 discs. The price point is also eye-catching at $1.50 per day for DVDs and $2 for Blu Rays.


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