Bookmark and Share

Wednesday, December 30, 2009

Does Redbox exist anymore?

Of course I am kidding. But there is definitely a lot less talk about the DVD rental kiosks lately. It is still a household word, but could it be that like all new retail concepts, people have gotten used to it? Or, could this be an early indicator of another business destined for the declining revenue train?

Right now, Redbox kiosks are still being installed everywhere. It is the best deal in movie rentals in nearly every city across America. But recent changes to their promotions are not only causing increasing frustration among customers, it has also stopped the conversation about the brand.

Customers subscribed to receive emails and mobile updates so they could receive free rental codes every Monday. The codes worked for every customer, which prompted people to forward the SMS messages to everyone on their phones, post on Facebook, and post to Twitter. The codes were spread so quickly and frequently that you could count on Redbox as a trending topic on Twitter each Monday.

Then the free Monday rentals were cut-off. Redbox announced it would only offer their mobile subscribers one free code each month. Shortly after, the codes became personalized, so that each code could only be redeemed once, not just once per customer.

Understandably, it can be hard to make money when giving your product away. The problem is that Redbox cut off too much, too quickly. Then they followed that up by eliminating their best advertising program when they made the new codes unsharable.

Customers can understand when prices increase. We are not happy about it, but we know it happens. However, Redbox needed to find a way to increase revenue without throwing this many disruptions into their customers' behavior. Especially considering that they are in a business that is increasingly threatened by new technology.

I'm sure Blockbuster could tell them what happens when the customer base is no longer talking about them.

No comments:

Post a Comment