April 30, 2019
It may be a streaming video ecosystem, but consumers still spent about $400 million renting DVD and Blu-ray Disc movies in the first quarter, ended March 31, according new data from DEG: The Digital Entertainment Group.
Most of that spending came at 41,000 Redbox kiosks, which accounted for 61% ($244 million) of spending, up about 1.3% from the previous-year period.
Privately-held Redbox does not disclose fiscal data, but when it was last publicly traded in 2016, the chain generated about $2 billion in annual revenue.
The company continues to co-promote transactional VOD service Redbox On Demand despite the fact the kiosk remains the most cost-effective way to rent new-release movies without a subscription.
“A five-minute drive is not going to be that much gas or time,” CEO Galen Smith told The Chicago Tribune. “In 11 minutes, you’ve got that movie at your house.”
Netflix’s legacy by-mail disc rental service generated about 20% market spending, or $80.6 million, down 1.1% from $98.7 million in spending last year.
The decline was due in part to the service losing 573,000 disc subscribers to end the period with 2.6 million subs. The loss was not surprising considering Netflix’s singular focus remains streaming video.
Brick and mortar disc rental revenue — spearheaded by Family Video — backstopped packaged-media rental with about $73 million (18.3%) in spending, which was down from revenue of $99.75 million (18.8%) during the previous-year period.
Like Redbox, privately-held Family Video does not reveal financial data. Forbes in 2017 estimated the Glenview, Ill.-based chain generated about $405 million in annual revenue.