Netflix DVD service, you will be missed

On Friday, Sept. 29, Netflix will mail out its final DVDs to subscribers. It will mark the end of company’s legacy DVD-by-mail service, which started some 25 years ago. And I will be sad to see it go.
I have subscribed to the DVD service continually since March 2001. In that time, I’ve watched about 1,660 discs, including movies, TV series and documentaries. That’s a lot of discs.
The end has been coming for a while. Consumers clearly prefer the immediacy of streaming video, whether that’s subscription video on demand or transactional video on demand.
The beauty of the Netflix DVD service was that it carried virtually every theatrical Hollywood release in one place. Now, you have to use a service like Reelgood or JustWatch to find out where to access a particular movie online, if it’s even available.
Netflix’s DVD.com also offered many movies, particularly older titles, that weren’t available for streaming anywhere.
My movie watching now is split across Amazon Prime Video, Disney+, Kanopy, Max and Netflix. In the future, I’ll likely switch off with other services such as Hulu, Paramount+ and Peacock. There also are niche services I’d like to try such as horror movie specialist Shudder.
I have a watch list on Reelgood to keep track of all the movies I’d like to see. Reelgood lists where those movies are available to stream, if they’re available.
I’ll miss the little thrill of finding Netflix DVDs in my mailbox every week.
However, I may try another DVD rental service. But those offerings seem limited. Video game rental service GameFly has a movie rental service offering DVD and Blu-ray Disc titles. There’s also 3D Blu-ray Rental, 4K Blu-Ray 4U and Scarecrow Video.
Plus, there’s Redbox and its video rental kiosks. But those machines are getting harder to find in my area.

Related articles:

Netflix Prepares to Send Its Final Red Envelope (The New York Times; Sept. 23, 2023)

Netflix is shutting down its DVD service this week. (Trung Phan; Sept. 25, 2023)

The high tech behind Netflix’s old-school DVD service (The Verge; Sept. 25, 2023)

Redbox to Increase Catalog, Niche Titles in Kiosks as Netflix Exits Disc Biz (Media Play News; Sept. 26, 2023)

Photos: My last few Netflix DVDs (Patrick Seitz)

GameFly, Redbox ready to carry the DVD flag after Netflix surrenders

When Netflix announced an end to its DVD-by-mail service, most media reports mentioned Redbox as a beneficiary. But what about GameFly?
Redbox is a much larger operation, offering more than 34,000 self-service DVD rental kiosks nationwide. Its kiosks offer a great option for people who live near them. But for people who prefer a DVD-by-mail service, GameFly offers an alternative.
GameFly is primarily a video game rental service but also offers movies by mail. It has two plans for DVDs and Blu-ray Discs: one disc at a time for $8.95 per month and two discs at a time for $13.95 per month. It also offers 4K Ultra High Definition disc plans, with one disc at a time for $13.95 per month and two discs at a time for $18.95 per month.
GameFly’s website lists 2,300 discs available for rental, mostly major Hollywood releases.
GameFly has touted its movie service on social media since Netflix’s announcement. But I wonder if they’re planning any other initiatives to capture some of the Netflix DVD subscribers who will be displaced this fall?
We’ll see.

Related articles:

Unanswered questions as Netflix ends DVD-by-mail rental business (April 22, 2023)

When will Netflix stop adding new releases to its DVD inventory? (April 30, 2023)

Unanswered questions as Netflix ends DVD-by-mail rental business

Internet television network Netflix announced April 18 that it will end its U.S.-only DVD-by-mail rental service this fall. But the announcement left subscribers and industry watchers with a few unanswered questions.
Netflix’s decision to end its legacy service after 25 years was not surprising, given the company’s focus on streaming video. Since its pivot to online video, Netflix has done no promotion of its DVD service, other than through a modest social media presence.
Netflix declined to say how many subscribers the DVD service now has. Estimates put the subscriber count at roughly 1 million.
Last year, the DVD business generated $145.7 million in revenue, or less than half of 1% of Netflix’s total revenue. It was literally a rounding error for the company.
Faced with a declining user base and diminished economics, Netflix figured the time was right to pull the plug. (Also, Netflix co-founder and longtime chief executive Reed Hastings stepped down as co-CEO in January. His successors were likely less emotionally attached to the legacy business.)
But what’s going to happen to its inventory of thousands of movies and episodic TV series on DVD and high-definition Blu-ray Disc? Netflix won’t say.
The parent company of Redbox, operators of DVD rental kiosks, reportedly tried to buy Netflix’s DVD operations several times but its offers were ignored.
I suspect that Netflix didn’t want to sell the business to a competitor, which might be able to revitalize it through marketing and promotion.
My hope is that Netflix doesn’t trash of its inventory of DVDs. That would be environmentally negative. They could auction off the movies (to Redbox, GameFly or others) or even donate the movies to a library. They still have value.
Netflix will ship its final discs to subscribers on Sept. 29. It will continue to accept returns until Oct. 27, the company said.

Related articles:

Why Netflix Hit Eject on DVDs (The Wall Street Journal; April 21, 2023)

Netflix Is Mailing Its Last DVD. The Die-Hards Are in Mourning. (The Wall Street Journal; April 20, 2023)

No Room for Nostalgia: Netflix Ejects DVD Business (Statista; April 20, 2023)

Redbox Owner Interested in Buying Netflix’s DVD Business (The Hollywood Reporter; April 19, 2023)

By Killing DVD Rentals, Netflix Is Sending an Elitist Message to Middle America (Media Play News; April 19, 2023)

Watching the slow death of DVD

A little over 25 years after its introduction, the DVD is in its end-of-life-phase. The ease of on-demand video streaming has been pounding nails in DVD’s coffin for years. But the digital video disc and its high-definition successor, Blu-ray Disc, have been holding on.
However, the signs of its demise are easy to spot. From retailers shrinking shelf space for video discs to fewer movies being released on the physical format, you can almost see the obituary for the DVD being written.
Last year, revenue from physical video media fell 20% to $2.8 billion in the U.S. Meanwhile, revenue from digital video services rose 11% to $29.5 billion, according to the Motion Picture Association.
Physical sales have been on a slow, steady decline. In 2014, for instance, disc revenue totaled $10.3 billion in the U.S., the MPA said.
Netflix continues to run a DVD-by-mail service in the U.S., but it has been shrinking along with the overall physical media business.
In the first quarter, Netflix’s DVD revenue fell 20% year over year to $39.8 million.
While Netflix still has a better movie selection than any single subscription video-on-demand service, its catalog has been diminished as older films go out of print and new ones are never put on disc to begin with.
My Netflix DVD queue now has 47 discs in it. But my “saved” queue of movies not presently available on the service is up to 65 titles. Many of those may never be released or are permanently out of print.
My “saved” list would be even longer if I didn’t occasionally remove titles that got to see via HBO Max, Amazon Prime Video, and other services.
And my “saved” queue only includes movies that Netflix has indexed on its website. There are dozens more movies I’ve searched for on the service but just aren’t listed. I keep a list of those movies in my “want-to-see” movies list at tracking service Reelgood.
Elsewhere, Redbox, operator of DVD-rental kiosks, says its business has been hurt by fewer new movies being released on disc. It blamed the lingering Covid pandemic for a smaller number of theatrical releases.
Redbox said it released just 57 new DVD rental titles in 2021, compared with 68 in 2020 and 140 movies in 2019.
Are the bells tolling for DVDs?

Photos: Netflix DVDs (top) and Redbox kiosk.

Netflix DVD business still alive and kicking, for now

Netflix’s legacy DVD-by-mail business barely manages a footnote in the streaming video giant’s financial statements these days. But the U.S.-only business, now called DVD.com, is still hanging in there.
This week, Netflix said its DVD business generated $59 million in revenue in the third quarter. That’s down 18% from the same period last year.
The pace of revenue decline has been slowing this year. Revenue in the DVD unit dropped 20% year over year in the first quarter and 19% in the second quarter.
Netflix stopped giving subscriber numbers and profit figures for the DVD business at the end of 2019. As of Dec. 31, 2019, the Netflix DVD service had 2.15 million subscribers.
Netflix is clearly letting the DVD business wither on the vine. The company doesn’t promote the service, other than through social media accounts.
Netflix likely would shut down the business rather than sell it to someone who could reinvigorate it. The big question is when that will happen. The main determining factor is the profitability of the business. But Netflix is keeping that information to itself now.
So long as Hollywood studios keep producing movies on physical media, there will be a place for DVD.com and Redbox. But once they go all digital, that will be the end for sure.

Related articles:

Netflix Generated $59 Million in Q3 Legacy Disc Rental Revenue (Media Play News; Oct. 20, 2020)

Why Are 2 Million People Still Getting Netflix DVDs by Mail? (Wired; Sept. 16, 2020)

Will Netflix’s DVD Rental Biz Finally Succumb to the ‘Kneecapping’ of the U.S. Postal Service? (Next TV; Sept. 16, 2020)

Photo: Ice cream from Ben & Jerry’s called Netflix & Chill’d. (Netflix)

What happens when studios stop releasing movies on disc?

I still subscribe to Netflix’s DVD-by-mail service because it offers an unparalleled selection of movies to watch.
Unlike the company’s streaming video service, Netflix’s DVD service offers movies from every major film studio. If it’s available on disc (DVD or Blu-ray), Netflix is likely to carry it, thanks to the first-sale doctrine in U.S. copyright law.
In the streaming sector, movie rights have Balkanized so films are spread out among different subscription video-on-demand services.
The nice thing about Netflix’s DVD service is that it’s the great equalizer. It gets movies from everywhere, regardless of studio. It even gets TV series from HBO, Showtime and others once they’re released on disc.
But Netflix’s DVD service has been steadily losing subscribers, in part because the parent company puts most of its marketing efforts behind streaming.
Lately I’ve been wondering what will happen when studios stop releasing movies on disc.
Major Hollywood blockbusters likely will continue to be available on disc for some time, but smaller budget movies, independent films and foreign films might skip physical media distribution.
Already retailers like Best Buy have reduced the store space they allot for DVDs. Redbox has cut back on the number of kiosks it maintains for renting discs.
The future appears set. Digital streaming via subscriptions will rise while movies for sale or rental on physical media will disappear. I just hope that takes a long time to happen.
When DVDs disappear, so will Netflix’s DVD business. But I intend to stay a subscriber to the bitter end.
Netflix’s DVD service had about 3.3 million subscribers last year. Netflix CEO Reed Hastings said he could see the service lasting for at least another five years, USA Today reported in March.
Last month, the Netflix DVD business celebrated 20 years of operation. I hope it has many more years ahead of it.
Without DVDs, consumers will have to sort through various streaming options to find the movies they’re looking for or else watch them on a pay-per-view basis.
Film buffs will mourn the loss of such DVD features as deleted scenes, director and actor commentaries and behind-the-scenes videos, which likely will go away when the shift to digital distribution is complete.
Streaming might be a more convenient way to watch movies, but it will be less satisfying when it’s the only option.

Coinstar’s new company name, Outerwall, makes me think of other walls

In December 2011, I predicted that Coinstar would change its name to Redbox to reflect the fact that the majority of its sales come from the DVD rental kiosk business. I ended up being half right.
Coinstar this week did announce a name change. But it decided on Outerwall. It’s an odd name that makes me think of other walls in pop culture, not a company involved in automated retail.
I understand why they chose Outerwall. It connotes what it used to call its “fourth wall” strategy. Coinstar puts its machines in the underutilized front of stores. Traditionally retailers sold things everywhere but the very front of the store. But Coinstar’s coin-counting machines, DVD kiosks and premium coffee vending machines have helped change that.
Still, when I hear Outerwall, other walls come to mind. Here are a few.

Wonderwall

“Wonderwall” (1995) is the classic song by English rock band Oasis.

Sugar Walls

“Sugar Walls” (1985) is a single by pop singer Sheena Easton. The song, composed by Prince, is presumed to refer to the “walls” of the vagina and was considered one of the “Filthy Fifteen” by a parents group at the time.

Pink Floyd’s The Wall

“The Wall” (1979) is the classic double-album by English progressive rock group Pink Floyd.

The Wall from 'Game of Thrones'

In the fantasy book series “A Song of Fire and Ice,” and the HBO TV series “Game of Thrones” based on it, the Wall is a colossal fortification that stretches for 300 miles along the northern border of the Seven Kingdoms. It is over 700 feet tall and made of solid ice. It was built to defend the realm from the White Walkers who live beyond it.

The Wall from ‘Almost Human’

The Fox sci-fi cop show “Almost Human” was set in 2048 in a city divided by a giant wall. The Wall separates the good part of the city from a lawless zone populated by terrorists. (Note: This entry added on April 30, 2014.)

Photos: The Wall from HBO’s “Game of Thrones”; covers of “Wonderwall,” “Sugar Walls” and Pink Floyd’s “The Wall”; another photo of the “Game of Thrones” wall; and the Wall from “Almost Human.”

Examining Netflix’s fake movie selection

A family sits down in their living room to watch a blockbuster Hollywood movie streaming on Netflix. They go to the on-screen menu and see their choices. There are thrillers like “Agent .45” and “Hong Kong Taxi,” romantic comedies like “Bella Ciao” and “Hotel Social,” and children’s animated movie “Zen & Zack.”
The cover art for these flicks includes no recognizable actors or movie posters. That’s because they aren’t real. They exist only in the minds of the artists who created promotional art for Netflix.
Netflix provides these photos to the press to illustrate their stories on the company and its service. It obviously came up with the fake movies because the streaming selection on Netflix is subject to change. A movie available one month might not be available the next because of licensing deals with the studios.
A lot of these unfamiliar movies look like some of the Z-grade flicks that end up on Redbox or buried in Netflix’s own library.
Titles include action movies “Kaliber” and “Contract Vengeance,” love story “Ameretina,” documentary “Wild Kenya,” sci-fi movie “Orion 3” (also called “Universe V”) and horror movie “Zombie Colony.”
Also in the fake Netflix library are comedies “Mic Night” and “The Student Exchange,” melodrama “Petals,” foreign films “Salut Mademoiselle” and “Juillet,” and martial arts movie “Silent Ninja” (also called “Rocket Ninja”).
Of course, I’m just guessing at the genres based on the titles and cover art. They’re bogus, so who knows?

Photos: Netflix promotional art with its library of made-up movies. 

11 bold tech and business predictions for 2012

Year-ahead predictions are a dime a dozen.
Put more bluntly by some foul-mouthed philosopher: Opinions are like assholes – everyone’s got one and everyone thinks theirs doesn’t stink.
I’ve reviewed a lot of 2012 predictions by experts in their fields and have compiled some of the most interesting ones.
Here are 11 notable predictions in technology and business that I’ve seen for the coming year.

1. Microsoft will buy Netflix and/or LinkedIn

Kudos to the analysts at market research firm IDC for sticking their necks out with their 2012 predictions. They predicted that Microsoft would buy Netflix to buck up its online content offerings and LinkedIn to add social networking capabilities.
IDC analyst Frank Gens admits they’re “audacious” calls.
“You can’t do layups all day,” he told me. “You have to take a half-court shot now and again.”

2. Microsoft will fire CEO Steve Ballmer

IBD tech business writer Brian Deagon is convinced that 2012 will be the year that Microsoft will give the boot to long-time CEO Steve Ballmer. This prediction has been floated in previous years, but Deagon is practically alone this year. (Warner Crocker at Gotta Be Mobile also predicts that Ballmer will step down next year.)
Deagon thinks Ballmer will be shown the door in 2012, despite the anticipated launch of Windows 8 later in the year, which will give the company a shot at penetrating the tablet market and reinvigorating PCs. Deagon thinks the Microsoft board will finally tire of Microsoft’s lagging stock price and missed opportunities.

3. Apple shares will plummet 50% from 2011 highs

Europe’s Saxo Bank predicts that Apple shares will tumble to $213.35 at some point in 2012, half of its 2011 high. The bank predicts that Apple will lose ground to competitors in smartphones and tablets in 2012 and see its profit margins cut.

4. Apple will buy Twitter

Apple will swoop in and buy Twitter as the microblogging service sees usage wane from competition from Facebook and Google+, ReadWriteWeb founder and editor-in-chief Richard MacManus predicts.

5. Apple will declare a dividend

The Apple board will decide to share some of its $26 billion cash hoard with investors in the form of a dividend, predicts Marc Lichtenfeld, senior analyst at Investment U.

6. Zynga will lose half its market cap

Social gaming company Zynga will see its market capitalization of over $6 billion cut in half in 2012, predicts Bernard Moon, co-founder and CEO of Vidquik, writing at VentureBeat.com.
Moon thinks Zynga will start to see its leadership position in the space diminish next year.

7. RIM will exit the hardware business

Research In Motion will ditch its BlackBerry smartphone hardware business and focus on software, says Alan Shimel, co-founder and managing partner of the CISO Group. RIM will focus on software for managing mobile devices for the enterprise, he says.

8. FTC will take Google to court

The Federal Trade Commission is likely to take Google to court next year on antitrust charges, according to Clint Boulton, senior editor for eWeek and Google Watch.
Boulton also predicts that Google will shutter its Chrome OS and Google TV products as CEO Larry Page continues to clean house of dead-end products and focus on core software.

9. Facebook will expand into e-commerce and business networks

Colin Sebastian, an analyst with Baird Research, thinks social networking leader Facebook will make a big push into e-commerce next year. He calls the online sales trend F-commerce.
IDC thinks Facebook will be getting more “business-oriented” in 2012, partnering with enterprise tech giants like Microsoft, IBM, Oracle and SAP to add social networking to their offerings.

10. Twitter for your toaster

IDC predicts that 2012 will see the arrival of microblogging by things, so people can follow the status of a product or service.
“Think Twitter for your toaster,” Gens said.
Machine-to-machine communications will allow people to follow a Twitter feed from an appliance in their home, the arrival time of a bus or the available parking spaces in an area.

11. Coinstar will change its name to Redbox

Coinstar will change its name to Redbox in 2012. Redbox is the company’s largest business today and it’s being used to brand new ventures like Seattle’s Best Coffee kiosks. This is my only personal prediction for the year.

Photos: Netflix on a laptop computer (top); and a Redbox-powered Seattle’s Best Coffee kiosk at the Harris Teeter grocery store in Reston, Va., in December 2011.

Digital culture timeline: Major events in the transition to pure digital media

The other day I wrote about mourning the loss of cultural businesses – those selling music, movies, books and video games.
Here’s a timeline of major events in the transition of entertainment from a retail business to an online activity.

Music

October 1982: First music album on Compact Disc (CD) released.

June 1999: Online music file-sharing service Napster launched.

July 2001: Napster shut down by court order for copyright violations.

October 2001: Apple debuts the iPod portable music player.

April 2003: Apple opens the iTunes store for legal music downloads.

December 2006: Last Tower Records store in U.S. closes after bankruptcy liquidation. At its peak, the chain had nearly 200 stores in 21 states.

March 2009: Virgin Megastores announces plan to close all of its U.S. record stores.

News articles:

The Graying of the Record Store (New York Times; July 16, 2006)

A Broken Record Store: Industry Icon Tower Is Bankrupt and on the Block (Washington Post; Aug. 23, 2006)

For Tower Records, End of Disc (Washington Post; Dec. 11, 2006)

Record stores closing in U.S. at record rates (Associated Press; March 30, 2008)

Retailing Era Closes With Music Megastore (New York Times; June 14, 2009)

Rough Trade and the future of the record store (Wired; May 27, 2010)

‘I Need That Record!’ Film Explores Plight of Indie Record Stores (AOL; July 27, 2010)

Movies

October 1977: VHS videocassette tapes introduced. VHS became the dominant home video format in the mid-1980s after a protracted format war with Betamax.

October 1985: Movie rental chain Blockbuster opens its first store, located in Dallas.

March 1997: DVD optical disc format introduced to U.S. market. It would become the most popular movie rental format in June 2003, surpassing VHS tapes.

December 1999: Netflix debuts its subscription DVD-by-mail service. The company now has 15 million subscribers nationwide.

May 2004: Redbox installs its first 12 machines, at McDonald’s restaurants in Denver, after two years of testing. Redbox now has 23,000 kiosk locations nationwide. It rents movies for $1 a night.

January 2007: Netflix debuts its online streaming video service, but only to PCs initially. It started streaming to TVs, first with the Roku set-top box, in May 2008.

March 2008: Online streaming video service Hulu is launched. Hulu is owned by the parent companies of ABC, NBC and Fox.

May 2010: Video rental store chain Movie Gallery announces that it will close all of its stores. At its peak, the chain had 4,700 stores in North America.

News articles:

Video rental stores fading to black (The Boston Globe; Feb. 23, 2010)

Hollywood Video Closes Doors (Wall Street Journal; May 3, 2010)

It’s A Wrap: Movie Gallery To Close All U.S. Locations (PaidContent.org; May 4, 2010)

A Timeline: The Blockbuster Life Cycle (Forbes.com; May 18, 2010)

Analyst: Blockbuster’s Last Gasp to Occur in 2011 (Gizmodo; July 11, 2010)

Blockbuster Hangs On For Dear Life (TheStreet.com; July 29, 2010)

Video games

1978: Space Invaders arcade game debuts, ushering in the start of the golden age of arcade video games. It’s soon followed by Asteroids, Pac Man, Donkey Kong and others.

1985: Nintendo’s NES console along with breakout hit game “Super Mario Bros.” fuels the home video game market.

1995: Software retailer Babbage’s begins a series of mergers and acquisitions that lead to the creation of GameStop, the largest specialty retailer of video game software. Its acquisitions include Software Etc. (1995), Funcoland (2000) and Electronics Boutique (2005).

2002: Microsoft launches its Xbox Live service for online multiplayer gaming. An updated version of the service for the Xbox 360 console, launched in November 2005, added game and video downloads.

News articles:

As Blockbuster Falls, Is GameStop Also Doomed? (Seeking Alpha; March 18, 2010)

New GameStop CEO’s Half-Baked Plan to Avoid Blockbuster’s Fate (BNet; July 22, 2010)

GameStop Is Bulking Up to Battle New Rivals (Bloomberg BusinessWeek; July 22, 2010)

A Game-Changer for GameStop? (The Motley Fool: July 30, 2010)

Books

November 2007: Amazon.com debuts its Kindle e-book reader. The first-generation product cost $399.

April 2010: Apple starts selling its iPad media tablet. The entry level model costs $499.

July 2010: Amazon.com unveils its third-generation Kindle, which starts at $139.

News articles:

Borders Seeks e-Book Strategy (Seeking Alpha; May 9, 2010)

Barnes & Noble Planning Big Push to Increase Nook Sales (New York Times; July 29, 2010)

Kindle to Go 'Mass Market' (Wall Street Journal; July 28, 2010)

Photos (from top): Gerosa Records in Brookfield, Conn.; Blockbuster Video store; Space Invaders arcade game and screenshot; and Amazon.com’s third-generation Kindle e-book reader.

Redbox: The early years

Redbox, operator of those popular red DVD rental machines, was almost called Tik Tok DVD Shop.
Gregg Kaplan, one of the founders of Redbox, shared that tidbit and others about the early days of the company in a speech Nov. 10 at the KioskCom Self Service Expo in New York City.
I had the chance to interview Kaplan, now president and chief operating officer of Coinstar, after his speech. Coinstar purchased Redbox in February and Kaplan joined the parent company. We discussed movie studio issues with Redbox and Coinstar’s future in automated retail. Read the story at Investors.com.
Redbox officially launched in 2004. But during two years of beta testing, it experimented with every aspect of the business, including its name. It tried Tik-Tok EZ Shop and Tik Tok DVD Shop before settling on Redbox.
“In the first two years, we went through probably about 50 different business models,” Kaplan said. The company experimented with pricing, selection, locations and the user experience for automated DVD rentals.
“We tested 99 cents a day, $1.50 a day, $1.98 for two days, $2.97 for three days, and by the way, even today we’re testing different price points,” Kaplan said. Today it rents movies for $1 a day.
The selection of DVDs in its machines ranged from 28 titles to 300 in the early years. Redbox eventually settled on 200 titles per machine.
In addition to grocery stores and McDonald’s restaurants, Redbox tried placing machines in office buildings, hospitals, apartment buildings and busy street corners. Since then, it’s tested machines in airports and casinos.
It didn’t have many machines in the early days. It ended 2002 with 12 kiosks and 2003 with 35 kiosks. Today it has more than 21,000 kiosks nationwide.
Kaplan, who was chief executive of Redbox, pushed to make the user interface on the machines as simple as possible.
Early designs for the touch-screen interface included flashy graphics (namely a rampaging dinosaur), but those were spiked in favor of big buttons.
Kaplan recounted the development process:

“When we first designed the GUI (graphical user interface) for Redbox, we had a very creative graphic designer come in. We described what we wanted; he went away for three weeks and came back (and showed us what he came up with).
There was a red dinosaur – a T-rex – charging towards you as the user, a la ‘Jurassic Park.’ And there at the bottom were two little buttons that said “Rent here” and “Return here.” And I looked at him and said, ‘What is this? What’s with the dinosaur?’
And he said, ‘Well, you know, this is a movie concept like ‘Jurassic Park’ and I thought it would be exciting and it would be cool’ … and he said ‘Isn’t that great?’
And I said, ‘Well, we’re trying to convert users here. We’ve trying to get people comfortable with a kiosk. How about we make those buttons a little bit bigger?’ And he said, ‘Alright, I’ll come back.’
So another two weeks go by (and he shows us what he’s done) and the same damn dinosaur is still charging on the screen. The buttons have gotten slightly larger … By the way, we’re running up against deadlines to get these machines out into the field … So I turned to him and said, ‘Alright, you’ve got to get rid of the bleepin’ dinosaur. This has to be so easy that my grandmother can use this. And first of all, my grandmother is going to be scared by the scary dinosaur. And my grandmother can’t see all that well and if you have buttons this small it’s not going to happen. I want big buttons and all it should say is “Rent here” and “Return here.”’ And that’s essentially how we started.”

Since then, Redbox has added another button for “Online reservation pickup.” But the main screen is still very simple.
“If the GUI and user experience feels like an airline cockpit, it’s probably not going to work. It’s hard enough to convince a consumer to use a machine to begin with,” Kaplan said.
Redbox is now testing the rental of high-definition Blu-ray Discs and video games.

Redbox is considering using its self-service kiosks to rent video games

With its self-service video rental kiosks, Redbox is putting the hurt on traditional movie rental stores like Blockbuster.
Redbox, a unit of Coinstar, rents DVD movies for $1 per night from its automated machines in grocery stores, drug stores and fast-food restaurants. It operates about 13,000 red kiosks nationwide in Walgreens, Wal-Mart and McDonald’s outlets and plans to have over 20,000 deployed by year’s end. (I profiled Redbox in a story published April 8 in Investor’s Business Daily.)
Meanwhile, GameFly, which rents video game discs by mail, is experimenting with self-service game rental kiosks. Privately held GameFly is the online video game rental leader. It provides video games on a subscription basis, much like Netflix does for DVDs.
Redbox is watching the video game market closely. I asked Coinstar President, and former Redbox CEO, Gregg Kaplan about the GameFly test and Redbox’s plans for video games in a March 18 interview.
“Video games is an obvious place for us to look,” he said. “I can’t really comment on plans for the future specific to video games because we’re currently focused just on DVDs. But it seems like a pretty obvious place for us to consider. You could bet that it’s certainly something that we’re looking at.”

Pure Digital, Redbox skip the IPO path

With the market for initial public offerings on hold during the current recession, two consumer technology companies that had planned to go public opted to be acquired instead.
Pure Digital Technologies, maker of the popular Flip pocket camcorders, and Redbox, operator of automated DVD rental kiosks, would have been fun to watch as standalone public companies.
But Pure Digital and Redbox needed to find a different exit strategy to satisfy their investors.
Cisco Systems on March 19 announced its intent to acquire privately held Pure Digital of San Francisco for about $590 million in stock.
Pure Digital has sold more than 2 million Flip Video camcorders, easy-to-use devices for capturing videos and sharing them on YouTube, MySpace and other popular Web sites.
Coinstar, operator of those green coin-counting machines in grocery stores, in February bought the remaining portion of Redbox that it didn’t already own.
It purchased the 44.4% stake in Redbox held by McDonald’s as well as shares held by other minority investors. Redbox is based in Oakbrook Terrace, Ill.