Can I Compete with Redox?

I have recently had several folks call me and e-mail me and ask about competing with Redbox. Although I compete with them on a limited scale, I still do. I have not been affected by them whatsoever. I also look for areas where there really isn't any competition. In Montana, things are quite different than some of the areas in the country. Some of you will probably end up competing with them more than I have to. In Great Falls , MT there are several Redbox stores but they aren't that close to my machines. Also, overall, the price is only off by 99 cents. Big deal, who wants to drive for 99 cents. Anyway, I asked Scott McInnes about DVDNow machine owners and their results with going head to head with Redbox. Very interesting comments coming from the top.. See Below

Oh, by the way, Scott is the top dog at DVDNow... Some of you may have even had the opportunity to speak with him. I very much appreciate his time in answering this question for all of us

Sincerely,
http://readydvd.com


Hi Mike,

I know that you recommend that our owners not try to compete with
Redbox. I know that you've had success by not going head to head with
them. But, some of our other owners do really well when they do go up
against them. Some of our top machines are right in the middle of
Redbox territory. In my opinion, it is possible to go head to head
with Redbox but to do so you need to have aggressive pricing. I was
speaking with one of our owners in Salt Lake City and he does $.99 for
the first night and $1.49 for additional nights. He does very well.
There are positives and negatives to Redbox but in my opinion the
positives outweigh the negative.

The most compelling evidence we see is how much quicker kiosks get up
to a decent revenue level in Redbox areas vs. non-Redbox. Few of our
kiosks in Canada, South Africa, etc... do as well as the kiosks in the
United States. Redbox has done a great job of increasing people's
awareness of the benefits of renting from a kiosk. Now they're popular
to the point where the lineups to use their kiosks are causing people
to seek alternatives to Redbox.

I agree with you that if you're across the street from a Redbox you
can't charge the same as what you could if there was nothing else in
town. But, with the right strategy there is definitely an opportunity
to be successful on Redbox's turf.