I just came across this great article about McDonald's RedBox DVD rental kiosks over at SeekingAlpha. In short: the company is going gangbusters, renting millions of DVDs, and spawning a multitude of competitors. To give you an idea of how amazing their growth is, check out this quote:When I contacted Redbox to get clarification on the scope of the McDonald’s rollout, Redbox Vice-President of Marketing, Greg Waring said that “to begin with, we anticipate more than doubling our presence in the first half of next year. Exact markets and locations will be announced in the coming weeks.”
With McDonald's set to add at least another 800 kiosks in the first half of 2007 and with Redbox currently in beta testing at both Walgreens and Walmart, the future for DVD kiosks may be looking very bright indeed. What may have started as a hairbrained idea to diversify McDonald’s revenue beyond fast food has turned into a full blown DVD revolution. With McDonald’s having now rented over 15 million DVDs in the last 12 months at just their own 800 DVD locations, the economics of this expansion appear very compelling.
Compelling indeed. You can't say names like "Walgreens" and "Wal-Mart" without turning a few heads, and considering the diversity of venues that RedBox is considering (and having success with), it seems that the company identified a consumer need, even though similar services are already provided by pretty successful companies (a'la Netflix online, and Blockbuster/Hollywood Video in the brick-n-mortar world).
Image source: http://people.snapstream.com/wp-content/RedBox.jpg
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