Redbox Rentals Declining: Are Physical Disc Rentals Going Obsolete?

Profits are dropping for Redbox rentals, and the kiosk-based rental company could be following Blockbuster Video into quiet extinction. Business is declining so much that streaming services appear to be taking over.

In the early days, it was common practice for someone to visit their local Blockbuster and grab a copy of a Schwarzenegger movie on VHS. The cost was minimal as long as they returned it within the week. Then DVDs and Blu Rays eventually broke into the scene, as the VHS and its accompanying players had become yard sale fodder. Blockbuster then had a serious competitor arrive, known as Redbox.

There was no salesperson serving everybody in the store. You just selected a movie from a list and entered a credit or debit card, and as long as you returned the disc in its case a day later, it only cost a dollar. Redbox rentals soon included video games, which helped expand on the variety of entertainment available.

Now, everything is heading for 4K resolution, and internet companies are pushing to offer higher speeds than before. This means that it’s become more convenient to simply search for the movie you want to see on Netflix, Hulu, or some other subscription-based service. You don’t have to drive anywhere except maybe to get a quick meal from a local fast food chain.

Because of these streaming services and the increasing popularity of downloadable video games thanks to consoles like Xbox 360, PlayStation 3, Wii, and their current successors, Redbox rentals are seeing a significant drop in profits. There are still some consumers who prefer a physical disc, but with the option of simply downloading and not risking traffic problems, Cinema Blend says Redbox has seen steady drops in its profit margin over the years.

Many are opting to eliminate the headache of driving to a Redbox rental kiosk and grabbing a physical disc, in favor of choosing from a wider selection on Netflix for probably the same monthly cost. This is reflected by a drop in revenue by nearly 20 percent in 2015. As a result, parent company Outerwall is planning to start removing Redbox rental kiosks that don’t perform as well as others, according to Variety.

Some might also claim that the decline in movie rentals is due to a lack of good choices at the kiosk, or even piracy. It has become an unspoken common practice for those on low incomes to simply download movies from The Pirate Bay or the torrent host of their choice. Others are still renting, and then copying the disc on writable DVDs.

Of course, rental DVDs now come with trailers and previews you can’t skip through, discouraging pirates from simply ripping the content. This, along with the FBI stating on nearly every movie disc that piracy is a crime punishable by incarceration and fines, could slow piracy to at least a degree.

Redbox’s Business Model Doomed as DVD Rental Demand Shrinks | Variety https://t.co/5rMhWlMYIg

— Eric H. Kearney (@ehk009) February 18, 2016

Streaming is clearly becoming a popular option, as the Inquisitr previously reported that The Pirate Bay and other torrent sites are starting to offer it for a price. For a subscription to a service which allegedly blocks your IP address from watching eyes, The Pirate Bay will let you watch the movie or TV show on their website instead of having you download it to your hard drive. It’s still piracy, though, and still a crime.

If you wish to avoid illegal activity, though, legal streaming will cost you, and there is an ever-expanding variety of services. Netflix and Hulu are among the oldest, while newcomers are cropping up and offering new content. Even YouTube is attempting to get in on the trend using YouTube Red, a paid subscription version offering allegedly better monetization options for successful channels.

What do you think of Redbox rentals bowing out to streaming services?

[Photo by Justin Sullivan/Getty Images]