Monday, September 07, 2009

RedBox and Netflix = Majority

Scott Kirsner over at Cinematech made a discovery today after reading this article from the NY Times.

RedBox and Netflix together represent 54% of the
DVD rental business in America.

These two companies - whose mottos advocate bargain DVD rentals and convenience (so much so that Netflix added a download to rent program) represent the consumer wishes when it comes to their rental entertainment.

I can only imagine that the current lawsuit outlined in the article will only spur consumers to find more RedBox locations near them or open a Netflix account. The Studios are in the unenviable position of having to argue that they aren't making enough money on their movies...

And when the figures are trotted out as to how cheap it is to actually manufacture and replicate a disc - the average consumer will wonder why they couldn't just make a rental version of the movie and a retail version (as some studios are doing).

The studios that are fighting RedBox have a much higher hill to climb. If they actually trot out numbers as to how much it costs to make Hollywood blockbuster movies then we'll all get a peek at how much fat there is built into the Hollywood machine. No one will argue that they have to recover their production and marketing costs.

But when they open the books and people see what the costs are - what was actually charged to the movie's accounts on the studios books - well there's going to be an outcry... Especially from hedge funds that have invested in Hollywood movie making.

This is a can of worms. Squiggly, epileptic worms.

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