Swot Analysis Of Redbox

There are basically six technology-driven threats to the traditional rental model: (1) Cable companies offering Video on Demand (VOD), (2) online movie downloads, (3) online movie rentals, (4) disposable DVDs, (5) illegal movie downloads and DVD copying, and (6) Digital (or Personal) video recorders (DVR). (Jackson) One could also consider traditional pay-per-view (PPV) as and additional substitute. Only one of these seven, online movie rentals has proven to be a major competitive substitute for traditional movie rentals. All other areas, except traditional pay-per-view are expanding rapidly, but some face significant challenges.

The movie rental industry is a living industry; there are constant changes with advances in technology, rights management, and the slow, but steady, move away from physical Media. Companies such as Netflix, Hulu, RedBox, and Blockbuster are being forced to look at new business models and try to keep up with these changes.

Blockbuster implemented a new strategy for customers to access their rentals in “five channels of distribution: in-store, by mail, through vending machines and kiosks, online, and at home (direct to the TV)” (DATAMONITOR, 2009). However, this strategy was a reactive approach to the problem produced ten years behind schedule. Wooldridge et al., (2007) stated that Blockbuster should select and adapt their strategy to respond to the fast changing market and maintain a competitive position. This was an obvious failure for Blockbuster. The changes in the market produced a decline in profit at a faster pace than the strategies that Blockbuster implemented to combat these losses.

While Redbox is one of our biggest competitors for viewers, it seems that the DVD rental market is on a downward trend. Therefore it is probably best to focus on companies that are intent on delivering video streaming. One recent player in the market is Sling TV, which is a subsidiary of Direct TV, and they have an offering of content that covers an area of entertainment that we have not been able to crack into (Katzmaier, 2015). They stream live cable programs such as AMC, TNT, TBS, Disney, HGTV, Cartoon Network, and ESPN to users for twenty dollars a month. While they are still subject to commercials and do not offer the ability to fast forward on certain channels, their product offering is one that differs enough from Netflix to cause

Redbox has not segmented its market by any demographic variable. With its kiosk located at routine place, it wishes to target the whole market, otherwise known as mass marketing.

Blockbuster used to have so much power in the movie rental industry until Redbox and Netflix have come to the market. One of Porter’s five forces

The main suppliers for the Redbox and other movie rental business are the movie production houses which own the copyrights of the movies produced by them. Three major studio houses 20th Century Fox, Warner Brox and Universal separately refused to sell DVDs to Redbox atleast 28 days after their arrival in stores. Other major studio houses, Sony Pictures, Paramount Pictures and Lionsgate signed distribution deals with Redbox. Since Redbox’s business model largely relies on new releases, “windowing” of new releases by the three studios may make Redbox’s business model unviable. Redbox responded by filing lawsuits with three claims against these companies - copyright misuse, tortuous interference and antitrust claims. In August 2009, a federal judge rejected the first 2 claims but allowed the antitrust claim to continue. Earlier this year, Redbox dismissed the lawsuits and reached and agreement

This type of segmentation is about the buying behavior of the consumers. In this case, it is about how people behave in terms of entertainment and social interaction.

Currently the competitive forces in the movie rental marketplace are not very strong. There are not very many players seeking to gain share in the market. The only competitors that come to mind when thinking of the movie rental marketplace are Netflix, Blockbuster and Red box. The evolution of technology has allowed many people to stream movies from online at no charge, for most and without any required subscription. Places like Blockbuster and Movie Stop are not as vivid as they have been in previous years due to the market shifting

The success of Netflix forced Blockbuster to see the growing popularity of rent-by-mail formats. In 2003 Blockbuster launched a rental subscription program, which would allow subscribers to rent an unlimited number of movies during the subscription period like Netflix, but with Blockbuster there was no waiting for movies to arrive. Blockbuster also fine-tuned its rental program and introduced a no-late-fee policy to compete against the growing number of subscribers to online rental companies. In 2004 Blockbuster

Psychographic segmentation is consits of assumptions for example is customer purchases reflect the lifestyle or represent him or her characteristics. According to this information Volkswagen reachs to all groups through their products as Polo, Beetle, Passat, Passat CC, Toureg, Scirocco etc.

Concession sales and ticket sales are the two biggest sources of revenue for a movie theater. Both continue to increase in cost to the consumers and may have reached a price point that is starting

Redbox is an easy way to rent and watch DVDs, Blu-Ray Discs and Video Games via automated kiosk or electronic device based streaming video. Kiosks are located at select fast food restaurants, grocery stores and convenience stores. Each Redbox kiosk holds approximately 630 DVDs/Blu-ray Discs/Video Games. DVDs rent for $1.20 per day, Blu-ray discs at $1.50 per day

The competitive forces in the movie rental industry are quite strong, as I will explain through the five forces model. There are a vast amount of substitutes for watching a movie. You can go to a play, sporting event, concert, out the lake/beach, go for a run, watch regular television, go shopping; I could go on and on. Also, torrenting or pirating movies is growing increasingly popular. Buyers have a strong presence in this industry mainly because they are picky about how much they will pay to rent or stream a movie. With the amount of substitutes and their pickiness, they make this

the need for a retail store in every city. Netflix functions in a virtual environment