Although it’s probably a transitional mode of movie distribution until streaming becomes the preferred mode – probably in 3-4 years, Redbox really puts conventional movie stores to shame when you want a popular title.

The friendly big movie boxes are located at heavy traffic stores like Wal Mart, and offer popular titles (as well as a limited selection of older films) at only $1.    The combination of a very intuitive and simple touchscreen interface, credit card scan, networking and the “robotics” of the Redbox are impressive to me.  The entire system seems well designed to eliminate the challenges that face other touch systems – clunky navigation and printer problems.   No printer problems at RedBox because they don’t use one – instead you are emailed both when you rent and when you return.

Another innovative solution is to avoid the frustrating and usurous “late fees” by simply charging a dollar a day – the standard low rental rate – until 25 days after which you own the movie.   This is an approach likely to get some revenues from movie sales and avoid pissing off customers who forget or keep the film for a few extra days.   I’d guess the optimal “you’ve bought it” number is lower than this – probably about $12 or so – but to know that you’d have to have information such as the cost to replenish titles in the machines, cost of lost revenue before titles are replenished, etc.    I’m assuming that RedBox’ largest long term cost is the human interaction needed to maintain and load the machines.

———- Return receipts are emailed immediately ——-

Dear JHUNKINS@GMAIL.COM:

Your copy of “Cloverfield” was successfully returned on 7/11/2008 11:30 AM.
Your return was on time. You will receive a receipt via email when we process your account.

Thanks for using Redbox!

DVD rentals cost only $1.00 + tax until 9:00 PM the next evening, then $1.00 + tax for each night thereafter. After 25 days, rental charges will cease and the DVD is yours to keep.