Red Box, Not The Future

Have you seen these things around? Maybe at your local grocery store? It’s a big ass Red Box and it rents movies for a buck. It’s quick, it’s easy, there is new stuff, and… it’s not the future of movie rental.

I was talking with my uncle recently who was enamored with them and said if he had any free cash he’d certainly invest in their future. I was kind of shocked. Even as a somewhat new idea, it seems like a dinosaur to me.

• It requires physical machines
• It requires physical media
• It requires physical distribution
• It requires human beings to manage, stock, and repair the machines
• Only one person can use the machine at a time

They have a few things going for them though.

• People like how cheap it is
• People understand it
• People have the equipment to use it already

It couldn’t be more obvious to me that digital distribution of movies is the true future of this business. The scaling problem is far easier to handle. Doubling your business means buying some more server power, not employing twice as many people and doubling the complexity of distribution.

I know I’m probably a bit of an “early adopter” but I have a shitload of ways to watch movies on my TV without any physical media getting involved.

TiVo – Record something off HBO or other movie channel
Netflix Streaming – Built right into the TiVo, tons of titles instantly watchable
Amazon Downloads – Built right into TiVo, tons of titles instantly watchable
AppleTV – Buy TV shows and movies from the iTunes store and watch instantly
AppleTV – Watch movies I have gotten elsewhere on the internet

I think it’s these digital distribution methods that are clearly the thing worth investing in. Eventually there will be a consumer device that actually starts selling to the masses (like AppleTV or TiVo never really did), and that is when this will take off.