retail news in context, analysis with attitude

The Seattle Times reports that Coinstar’s Redbox DVD vending machine business continues to grow. Here’s how the paper reports it:

“Increasingly, Redbox is the go-to place for cheap movie rentals on a Friday or Saturday night.

“While Movie Gallery, the bankrupt parent of Hollywood Video, closes all of its remaining U.S. locations, and Blockbuster plans to shutter at least 500 stores, Redbox adds nearly 22 new machines daily, bringing its projected year-end total to about 30,000.

“Coinstar-owned Redbox accounted for 23 percent of U.S. video rentals in the first three months of 2010, up about 7 percentage points from a year ago, as 24,000-plus machines dispensed 9 million DVDs weekly, according to data released by its Bellevue-based corporate parent.

“The data, which Coinstar attributes to NPD VideoWatch, put Redbox ahead of Blockbuster for DVDs and Blu-ray discs rented in the first quarter. Subscription service Netflix, with nearly a third of the rental-unit market, grabbed the No. 1 spot.”
KC's View:
This is one of my favorite cautionary examples of a business model (Blockbuster) that no doubt thought it had a viable long term business plan...until two other models came along that made it virtually obsolete. Sure, Blockbuster is trying to catch up. But I think that train has left the station.

Here’s the big question. What are the folks at Netflix and Redbox doing today to insure that the same thing does not happen to them tomorrow? Because change is inevitable.