Redbox Moves into Wal-Mart Stores Nationwide

The death of the traditional video store seems inevitable. But, while many point to online movie downloads or through-the-mail rental services as the clear successor, a new way to rent DVDs – one that mixes the old method with innovative technology – may be giving people another option. Last month, redbox™ announced the expansion of their DVD-rental vending machines into the majority of Wal-Mart stores. While the devices already sit in nearly 800 Wal-Marts, the new deal will put redbox machines in another 2,700 stores. No doubt, the Wal-Mart agreement comes in response to the rising popularity of the system that offers people a convenient way to rent DVDs for only $1 a night. The addition of machines at the mighty Wal-Mart chain signals red box's emergence as a major player in the DVD-rental field.

Redbox started out by positioning machines at McDonald’s restaurants in Denver in 2005, and has since expanded to more than 6,700 locations nationwide – including leading grocery stores and retailers like Walgreen's. Each redbox holds more than 500 DVDs, representing 100 to 150 of the newest movie releases. A person walks up to the machine, selects a movie to rent from the touch-screen menu and swipes a credit card to pay. The redbox dispenses the DVD, and the renter has until 9pm the next day to return the disc. If a disc is not returned on time, the renter is charged $1 for each additional night (after 25 nights, charges stop and the person owns the disc). Best of all, DVD rentals can be returned to any redbox location, no matter where they were originally rented.

Certainly, the convenience factor is the invention’s major benefit. Unlike the video store, stopping at a redbox does not necessarily require an extra trip. A person running errands can drop by a redbox on the way out of the grocery store or during a quick stop at Wal-Mart. And, redbox continues to take steps to make its systems even more convenient. Taking advantage of online technology in ways video stores have been reluctant to, redbox now allows users to reserve movies online. A person goes to the redbox website, selects a film for rental and a redbox location, and enters their credit card information. The redbox will then hold the DVD at that location for 24 hours. When a person shows up to the machine, he or she just swipes their credit card and the machine dispenses the reserved DVD.

With the addition of the online reservation program and expansion to nearly all Wal-Mart sites, what was once a curiosity is quickly becoming an increasingly viable rental source. While rental services like Netflix and Blockbuster Online have been growing in popularity, they still require a user to select in advance what movies they want to watch and wait for them to come in the mail – which doesn’t really speak to the immediacy of movie rentals (e.g. – "there’s nothing to do tonight, let’s rent a movie..."). And while online downloads do provide an immediate solution, they also require users to watch movies on computer screens – not exactly the ideal home-viewing experience. But video stores are the services that should be really nervous about the redbox upswing. Despite dwindling customers, stores like Blockbuster bafflingly continue to charge around $4 for in-store rentals. If a person has the option of renting the same DVD for $1 at the place they stop to buy milk, the choice seems obvious.

Redbox machines will begin popping up in more Wal-Mart stores immediately, with the entire installation project expected to continue into 2009.

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