Cord-Cutting and Cloud: Why Does Redbox Defy the Trends?

Source: Thinkstock

Source: Thinkstock

While technology trends toward cord-cutting, cloud-based technology, digital copies, and everything — files, software, and even hardware elements — existing beyond consumers’ physical reach, Redbox seems to be defying the trends and succeedingly so. The Illinois-based Outerwall (NASDAQ:OUTR) subsidiary hasn’t even come close to giving up on its ventures centered around real, palpable, hard-copies of movies and video games that it makes available for rent through its Redbox kiosks.

People may move in droves to Netflix (NASDAQ:NFLX) and away from cable providers so they can stream movies and binge watch TV shows whenever they want without any commercials, but Redbox is proving plenty of people still go for renting a disc and taking it home. With 44,000 kiosks in 36,000 locations as of early June, Redbox accounted for half of the DVD rental market, according to Outerwall CFO Galen C. Smith, reports Variety. On top of that, 38 percent of all movie rentals came through Redbox during its fourth-quarter, and that includes Video-on-Demand rentals.

The company offers its own streaming service, Redbox Instant, to fulfill the competitive need when faced with all the VOD services from cable operators and services like Netflix, Hulu, and Amazon Instant Video. It may also prove a valuable asset in the near future, as analysis firm PwC estimated home entertainment revenue would fall from $12.2 billion in 2013 to $8.7 billion in 2018 in the category of physical copies that Redbox occupies, according to Variety. Still, it has particular value to consumers that other services might not, and it even values that fact that it serves physical copies  instead of just digital ones.

One major bonus that Redbox offers is that new releases will often be available more than half a year earlier than other streaming services can offer then, according to Variety. In addition, it has speed and convenience on its side when it comes to physical copies. Sure, the old Blockbuster stores might have been well and good, but Redbox is easy to find when you’re out getting things, since it often sits by convenience stores — convenient indeed. For people that want physical copies, it is more quickly available than the discs from Netflix, so there isn’t that planning in advance necessary.

The other big thing Redbox has going for it is video games. At $2 per day, it offers hard copies of video games from its kiosks to target a very particular group of gamers. A survey by Interpret determined that 50 percent of Redbox’s customers want to try games before they consider buying them, reports Gamespot, and that figure would likely also extend some into gamers who don’t use Redbox.

For now, Redbox insists that people want to have a physical copy. The company’s director of video games, Ryan Calnan, said that, “There’s obviously this emotional relationship to the physical disc,” reports Gamespot, and whether there’s any emotion involved or not, Calnan is definitely onto something, as an NPD Group study found that almost three quarters of gamers would purchase a physical copy over a digital copy at the same price point.

Though Redbox may appear behind the time with its continued focus on discs, it’s proving a capable competitors in the video and gaming space. Of course, that may change when PwC’s predicted decline comes around, when more people upgrade to devices that allow easy streaming, or if the video game console makers work out robust systems for letting people try out more games before they purchase.

If you’re interest in streaming content, you might also be interested in our earlier post on video content that’s not available on Netflix. Check it out here:

Netflix is adding a healthy helping of films and TV shows to its streaming service in July to help get over the lazy hump of summer vacation. Here’s a breakdown of the new offerings by genre to give you something to watch, no matter what you’re in the mood for. The titles come from an article by Indiewire, and all offerings will begin streaming on July 1 unless otherwise noted.

Source: Weinstein Co.

Critically Acclaimed Films

Netflix has added some major critical darlings to its streaming options. The Master (1), starring Joaquin Phoenix, Philip Seymour Hoffman, and Amy Adams, will be available to stream on July 14. The film sees Phoenix playing a World War II vet struggling to adapt to society after he returns from war; he is sucked into a religious cult led by Hoffman’s character, and all three of the aforementioned actors received Academy Award nods for their performances. The acclaimed 2002 foreign-language film City of God (2) from Brazilian director Fernando Meirelles was lauded for its portrayal of the true story of the rise of drug-related violence in one of Rio de Janeiro’s worst favelas.

Tom Hanks won an Oscar for playing a homosexual lawyer struggling with AIDS in 1993′s Philadelphia (3). Dead Man Walking (4) gained multiple Oscar nods after its release in 1995 and stars Susan Sarandon as a nun trying to help a convicted murderer (Sean Penn) avoid the death sentence; 1996′s courtroom drama Primal Fear (5) was the first major critically acclaimed role for Edward Norton. Surprisingly, the 2004 remake of the 1962 classic The Manchurian Candidate (6) was well received, in particular for Meryl Streep’s performance as Sen. Eleanor Prentiss. Finally, one of the most well-received Star Trek films, 1991′s Star Trek VI: The Undiscovered Country (7), is bringing the final installment of the Star Trek franchise featuring the original cast to Netflix.

Source: Paramount Pictures

Classics

The 1957 classic 12 Angry Men (8), starring Henry Fonda, will begin streaming on July 1. The courtroom drama is considered to be one of the best movies of all time, and Fonda’s character, Juror 8, was voted one of the best movie heroes by the American Film Institute. There’s also the classic romantic comedy Funny Face (9), starring Audrey Hepburn in her iconic role as a bookstore clerk who’s reluctantly convinced to model by Fred Astaire, who plays a fashion photographer. She is tempted at first by the opportunity to go to Paris and see the thriving literary and philosophy scenes, and later just by Astaire’s character. Boyz n the Hood (10) is famous for its gritty, realistic portrayal of life in South Central Los Angeles and for producing the first Academy Award nomination for an African-American director for John Singleton. The 1992 raunchy neo-noir classic Basic Instinct (11), starring Sharon Stone and Michael Douglas, is also set to hit Netflix on July 1.

Source: Touchstone Pictures

Chick Flicks and Man Movies

It’s well known that Hollywood is one of the biggest sources of problematic stereotypes of all kinds, so here are some stereotypically male- and female-oriented movies coming to Netflix this month. “Man movies” was the best term I could come up with as the condescending equivalent of “chick flicks.”

Man movies: The Battered Bastards of Baseball (12) is a documentary about Minor League Baseball team the Portland Mavericks, debuting July 11. The Last Days (13) is great for some rough, post-apocalyptic foreign-film action coming July 15. Homefront (14) is an action-thriller staring James Franco as a depraved drug dealer in a meth-cooking biker gang that promises lots of fighting and which comes to Netflix on July 9.

Chick flicks: The Farrelly brothers’ 2005 baseball-based romantic comedy Fever Pitch (15), starring Drew Barrymore and Jimmy Fallon, will appeal maybe a bit to both parties on a hypothetical date night, given the sports and romance themes. Under the Tuscan Sun (16), about a woman who buys a villa in Italy after a bad divorce, is a better bet for a more well-received romantic film. Will Smith and Kevin James’ sweet rom com Hitch (17) gained decent reviews for those actors’ performances despite the movies’ predictable plot, and will start streaming on Netflix on July 14.

Source: International Film Investors

Historical Films

Just because students are all off on summer vacation doesn’t mean learning should stop. You can combine a history lesson with relaxation with one of these historical period films. Legends of the Fall (18), starring Brad Pitt and Anthony Hopkins, follows an immigrant family living in the wilderness on the American frontier during the early 1900s, following three brothers and their father through World War I, Prohibition, and the Great Depression. Ben Kingsley’s portrayal of the Indian pacifist independence movement leader Gandhi in the 1982 film Gandhi (19); the biopic about World War II Gen. George S. Patton and the 1970 winner of seven Oscars, Patton (20); and the 2012 biopic Renoir (21), about the muse of famed French impressionist painter Pierre-Auguste Renior and his filmmaker son Jean Renior, are also bringing some history to Netflix. Renoir debuts on July 6, while the others hit Netflix at the start of the month.

Source: Walt Disney Pictures

For the Kids

Lots of family friendly additions are coming to Netflix this month, as well. Eighties classics include the original three Karate Kid (22-24) movies and 1989′s Honey, I Shrunk the Kids (25). More kid-approved nostalgia can come from pre-meltdown Lindsay Lohan playing separated twins from opposite sides of the tracks in 1998′s Parent Trap (26). For even younger children, 2004′s Winnie the Pooh: Springtime with Roo (27) will see the classic characters having their signature fun adventures.

Source: Columbia Pictures

Christmas in July

July is the time of year when we are six months away from Christmas, and at this point, some get too impatient to wait for the holiday any longer and decide to engage in what’s known as Christmas in July to satiate their holiday cravings until December. If you are one of these people, on July 1, Netflix is adding Bad Santa (28), a raunchy black comedy starring Billy Bob Thornton as an alcoholic, sex-addicted mall Santa. For a more family friendly option, Christmas With the Kranks (29), starring Jamie Lee Curtis and Tim Allen as a couple who attempt to skip Christmas, is also coming to the streaming service, on July 26.

Source: Red Granite Pictures

Critical Disappointments

Sometimes a bad movie just hits the spot. Terrible films can be inadvertently hilarious or make for good background noise, and they are likely very cheap for Netflix to get the rights to. This year’s Sleeping Beauty (30), from low-budget direct-to-video filmmakers The Asylum, was as lackluster and terrible as any of that studio’s offerings, with just a 2.7 rating from users on IMDb, and it’s coming to Netflix on July 12. Out of the Furnace (31) disappointed critics due to its awesome cast — including Christian Bale, Woody Harrelson, and Zoe Saldana — not being used properly, and it has a 53 percent Fresh rating on Rotten Tomatoes. It comes to Netflix on July 9.

Hemlock Grove

Source: Netflix

New TV

The biggest show debuting on the streaming service this month is the second season of the Netflix original horror series Hemlock Grove (32), which begins streaming July 11. If ABC Family comedic sitcoms are more your thing, Season 3 of both Melissa & Joey (33) and Baby Daddy (34) will premiere on July 18. The first season of science fiction anime series Knights of Sidonia (35) will premiere on July 4. Pac Man and the Ghostly Adventures (36) offers a computer-animated option on July 17. The third season of AMC’s Hell on Wheels (37), a historical drama about the building of the transcontinental railroad, hits Netflix on July 19. On July 24 comes the fourth season of the Canadian supernatural crime drama Lost Girl (38), which follows a bisexual succubus named Bo as she seeks to use her demonic powers to help humans. Lastly, Continuum (39) is another Canadian sci-fi series hitting Netflix on July 26.

Follow Mark on Twitter @WallStMarkSheet

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