SEATTLE -- Those $1 video vending machines are popping everywhere, led by Bellevue-based Redbox. The company is growing so fast, it is installing a new Redbox machine every hour of every day in America.
"It all comes down to value for the customer," says Redbox Senior VP of Marketing Gary Cohen. "People see the value and they embrace it."
Redbox revenues have skyrocketed 50% since 2009, and will have nearly 30,000 kiosks nationwide by the end of the year. This, as the company continues to take market share from traditional video stores. At the end of the third quarter, Redbox solidified 27.9% of the video rental market, up 9 points from a year ago, while brick and mortar lost 14%, according to spokesperson Marci Maule.
In the Seattle area, Redbox is now testing video game rentals.
"People like having everything they need under one roof," says Cohen. "They can come to a QFC, get their groceries, pick up a movie and now even a video game on a Friday night. It's a win-win."
But industry analysts warn that the trendy red boxes could soon face the same struggles as the Blockbusters of the video rental world. One day soon, the main platform for watching movies at home won't involve a DVD at all, but rather downloaded material through home computers or special TV boxes.
Redbox's Cohen says the company is now moving in that direction.
"We'll be announcing a digital partnership sometime next year," he says. Adding, "We've got a billion movies rented already. This is gonna be big."