Redbox’s landmark kiosks, which litter grocery stores and 7-11s across the U.S., will be less prominent by the end of 2014. The Wall Street Journal says the DVD rental company has plans to shutter over 500 of its locations before the year is up, citing declining revenue and floundering growth. With so many excellent streaming alternatives out there, it seems the physical rental model just isn’t a sustainable business. That doesn’t mean Redbox’s kiosks are disappearing completely, in fact, there are currently about 42,000 kiosks operating.
Redbox has relied on market saturation and cheap prices to lure customers in. But the company saw its revenue increase by only 3-percent last year, and studios are making it more difficult for Redbox to offer new releases in a timely fashion; once a new release is available in stores, Redbox typically has to wait several weeks before the movie is offered through its service. With slowed growth, the WSJ says the company’s outlook looks even worse this year, which is why it plans on shutting down so many kiosks.
During the fall of physical media, Redbox adopted a unique approach by offering standalone kiosks instead of maintaining an entire store. It seemed to work out well, too, giving customers an easy way to pick up DVDs/Blu-ray and even video game rentals for cheap. But online options have much more content available, and you definitely can’t beat the convenience of streaming. Redbox tried to supplement this trend with its own streaming service, but reports say Redbox Instant has so far been a dud.
Redbox’s content deals with five of its six studios are set to expire later this year, bringing everything to a head for the Illinois-based company. Among re-negotiating deals, the company will be in the midst of closing down kiosks all across the country, possibly making the service less accessible to residents—or at least the ones that are available more crowded. Redbox is remaining for now, but how much longer can physical media stick around? Even video game companies are trying to go all-digital. It’s not a matter of if, but when.