Redbox Announces Record Week Thanks to ‘Super Mario Bros.’; Should Streamers Look to Add Their Own Rental, Purchase Platforms?
Redbox first gained a reputation as the company that helped Netflix bring down Blockbuster. Redbox rental kiosks still litter the country’s grocery stores and gas stations, a reminder of a time when most home media took the form of physical discs that had to be returned after watching.
But unlike Blockbuster, Redbox has continued to evolve past the offering of physical home media. It also operates a digital rental platform, which is likely a big reason Chicken Soup for the Soul Entertainment (CSSE) saw Redbox as a worthwhile acquisition. CSSE purchased Redbox last summer in a deal worth around $375 million.
That investment is paying off handsomely, according to CSSE. This week, the company announced that Redbox saw its highest revenue-earning week ever from May 14 through May 21. The company has the “Super Mario Bros. Movie” to thank for its success; that film was first released to digital purchase and rental platforms on Tuesday, May 16. Since then, it has helped Redbox break the record for revenue first set when “Avatar: The Way of Water” was released for digital purchase and rental in late March.
“It’s clear that movie fans have a voracious, pent-up demand for big new release movies, which is something we’ve long expected,” CSSE CEO William J. Rouhana Jr. said. “Starting this week, we will have major releases coming to our kiosks every week through the end of the year and launches of premium window titles through our Redbox [rental and purchase] service. More movies mean more rentals and more revenue.”
Redbox’s recent stretch of successes reflects a bounce-back for the movie industry as a whole. The COVID-19 pandemic shuttered many theaters, and when they opened again they had to overcome a new wave of customer inertia as audiences had become used to streaming newly-released movies at home. Now, movies like “65,” “Creed III,” “Shazam! Fury of the Gods,” “Ant-Man and The Wasp: Quantumania” and “Dungeons & Dragons: Honor Among Thieves” are all making their way through theaters and onto digital rental platforms, showing Hollywood’s blockbuster machine is revving up once again.
But should other streamers start looking into hosting their own movie rental platforms, as well? Such services allow studios to further monetize their popular films, before sending them to streaming platforms that don’t drive nearly as much direct revenue. However, there are several factors that will likely keep more streamers from offering transactional video-on-demand (TVOD) services like Redbox and Prime Video do. For movies like “Super Mario Bros.,” when they are available for digital rental or purchase while still also being in cinemas, that is known as premium video-on-demand (PVOD).
For one thing, users have become too accustomed to thinking of subscription video-on-demand (SVOD) sources as a place to see the biggest movies for the price of a subscription, and nothing more. Users know that services like Paramount+ and Peacock will get Paramount and Universal movies eventually, and patient ones are more than willing to wait. Adding a rental or purchase element will likely cause users to think of streamers as less of a value, which could cause churn rates to increase.
Another factor keeping more streamers from setting up their own TVOD platform is that the costs of doing so will likely outweigh the revenues these companies are currently making. Movie studios get lucrative licensing fees to send their movies to third-party platforms for digital rental. Clawing back those rights would be a long and expensive process, at the end of which studios would no longer be getting the fees, but would instead be forced to pay to maintain a rental platform of their own.
That means that, despite Redbox’s series of successful weeks, there’s not likely to be a rush by prestige streamers to integrate more digital rental or purchase options on their platforms. That’s certainly good news for Redbox, Prime Video, iTunes, and other such services, who will continue to enjoy the benefits of a rebounding theatrical release schedule.
Redbox
Redbox is a free ad-supported video streaming service with dozens of live streaming channels and on demand movies. Users can also rent or buy movies through the platform.