Updated Dec 3rd 2009 11:55AMDouglas McIntyreJun 22nd 2009 8:00AM Updated Dec 3rd 2009 11:55AM
Netflix (NFLX) has been able to hold off attempts by Blockbuster (BBI) to challenge its CD-through-the-mail model. It has also added an internet streaming video product to fight VOD from cable and new companies that send movies over the internet.
Now, Netflix is being challenged by a low-tech, low-cost alternative for customers. Redbox, which has almost 15,000 rental kiosks from which it offers movies for as little as $1 a day, is beginning to take a large chunk of the CD market.
According toThe New York Times, "Redbox is opening an average of one kiosk an hour to lure consumers, which has Reed Hastings, chief executive of Netflix, taking notice."
How does Netflix combat the low prices and large numbers of Redbox locations? Maybe it can't. The kiosks only hold a limited number of films, but if they are the most popular films it may not matter that NetFlix can offer movies from years ago. Netflix would have trouble marketing its service for $1 without severely undermining its margins.
Redbox shows that in a high-tech market, low-tech can be a winner, especially by offering low prices during a recession.
The 'Trek' franchise boldly went back to the drawing board, with a new cast and a new origin story, and fans rewarded J.J. Abrams' vision. The 11th film in the franchise not only earned critical raves, it generated $72.5 million at the weekend box office, plus $4 million at Thursday night preview screenings. Live long and prosper!
There is an exception to every rule. This latest 'Potter' film -- perhaps the most somber of the lot -- didn't surpass its series predecessors; but being in the top 25 openings of all time is nothing to scoff at.