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Industry Spotlight: Redbox DVD Rental Vending Machine

The Redbox DVD rental vending machine is aflame with popularity. The company, founded as a subsidiary of Coinstar, who is the company that came out with the Coinstar vending machine - able to exchange your loose change for dollar bills.

The Redbox has  helped reduce the prevlancy of brick and mortar DVD rental outlets, such as Blockbuster. While not a heavy-handed factor, other influences affected the diminishment of B&M rental stores - most importantly, the Internet and online video streaming, like Netflix.

Redbox DVD rental vending machines have popped up all over the nation, with an estimated 22,000 locations as of the end of 2009. Locations span the range of available spots, such as fast food restaurants, grocery stores, pharmacies and other convenience stores.

Believe it or not, Redbox was originally funded by McDonald's Ventures, LLC (a subsidary of McDonald's Corp). And in 2005, Coinstar bought up to 46% of the company, and finally in 2009, Coinstar bought up the rest of the company, which was worth around $170 million dollars.

In 2007, Redbox attained new heights by surpassing big-time player Blockbuster, in number of locations in the United States - they passed 100 million total rentals by 2008.

Needless to say, there are quite a few competitors to Redbox, including Moviecube, DVDXpress, Blockster and more. Overall, DVD rental vending machines occupy 19% of the DVD rental market.

For the future and beyond, Redbox will introduce high definition rentals (blu-ray format) this year, and are testing video game rentals as well.

The facts & figures

• Interactive touch screen
• Robotic system for disk array
• Linked up to the Internet
• DVD selection updated weekly
• Can reserve DVDs online
• Real-time inventory updates
• As of 2007, Redbox DVD rental vending machines averaged almost 50 rentals per day, and $37,457 dollars a year in revenue.