Friday, May 28, 2010

Movie Night Marketing

Redbox, Kroger, and Pepsi want shoppers to "Make it a movie night:" Buy 3 Pepsi or Frito-Lay products at Kroger's and get a coupon for a free Redbox movie rental.

Redbox is already a standout in movie-rental kiosks, having rented some 750 million DVDs during its lifetime. As local and regional movie-rental chains close, Redbox is in a good position to benefit by picking up new customers.

However, Redbox faces critical challenges. Yes, it represents "disruptive technology" compared with movie rental stores (such as Blockbuster). But Blockbuster is still around, rolling out its blue Blockbuster Express kiosks, which carry more DVDs and, in some areas, allow later return times than Redbox allows. Of course, Blockbuster's ongoing financial woes make the company's future a big question mark.

Cable video-on-demand offerings are clear competition for Redbox. So are Hulu's online offerings and Netflix's "watch instantly" movies and TV episodes. Can Redbox continue its profitable growth based on $1 per night movies? Tune in again...

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