Redbox Swot Analysis

For years, McDonald's Ventures wanted to come up with a way to increase convenience for Mcdonald's customers. In 2005, corporate leaders came up with the idea of RedBox. RedBox was a way to rent new movies for a extremely cheap price. At the kiosks, customers were able to rent movies for only one dollar per day. The kiosks were originally placed at McDonald’s across Denver. RedBox was a huge success and spread across the United States and into Canada. However, Redbox is no longer a trend due to losing the stickiness factor and the creation and increase of online streaming services. In 2005, Outerwall Inc. signed an agreement with McDonald’s Ventures to invest in Redbox. The agreement allowed Outerwall to use their retail expertise to expand

Prior to the explosion of Netflix, there were hundreds of thousands of Redbox kiosks across the United States and even Canada. However, the decline has caused Outerwall to shut down Redbox operations in Canada. “Redbox is no longer making a profit from the kiosks located in Canada” (Armental). With online streaming services, people do not feel the need to go and buy the movie. Most of the time, the movie is available right when they want it. While Redbox does focus on having the newest movies out for rent, most people do not want to spend the time to go and rent the movie. They would rather stay at home then go get it. Netflix became popular in Canada the same time it did in the United States. While the Redbox kiosks are not making a profit in Canada, they are making a profit in the United States, but not as much as owners of the company would hope. “Since the kiosks are not making a profit in the United States Outerwall has decided to close over 500 redbox locations in the United States. The decline of usage of the redbox kiosks is because of new online streaming services” (Fritz). With the online streaming services becoming more popular everyday Outerwall feels the need to close even more