RedBox

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Contents

About Redbox

Redbox, an Outerwall Inc. brand, was founded within McDonald’s® Ventures, LLC, in 2002 as a vehicle to drive traffic and deliver additional convenience to McDonald’s consumers. The fully-automated DVD rental kiosks were first tested at McDonald’s locations in Denver beginning in 2004. In 2005, McDonald’s expanded the test to more than 800 restaurants across five additional markets: Baltimore, Houston, Minneapolis/St. Paul, Salt Lake City and St. Louis.

About Outerwall

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Since their begining in 1992 with Coinstar, we've always been looking for ways to provide value, convenience and simplicity to consumers and retailers with our kiosk brands:

◦Coinstar—a leader in money services

◦Coinstar Exchange—instant cash for unused gift cards

◦Redbox—the best value in home entertainment

◦ecoATM—instant cash for recycling phones and other devices

Beyond our network of more than 66,000 kiosks, we're re-imagining new retail solutions to fit everyday consumer needs now—and into the future.

Redbox History

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In 2005, Outerwall Inc. (formerly Coinstar, Inc.), signed an agreement with McDonald’s Ventures, LLC, to invest in Redbox by leveraging its retail expertise to expand the Redbox footprint outside of McDonald’s restaurants. The agreement made Redbox a separate company from McDonald’s and set the stage for Redbox to expand into grocery stores, mass merchant retailers, drugstores and convenience stores. In 2009, Coinstar, Inc. purchased the remaining stake of Redbox from McDonald’s and other minority interest holders.

Today, Redbox offers new-release DVD, Blu-ray Disc® and video game rentals through its network of conveniently located, self-service kiosks. Redbox has rented more than 3.7 billion discs and is available at about 35,000 locations nationwide, including leading grocery, drug and convenience stores, and select Walgreens, Walmart and McDonald’s locations. Redbox serves millions of unique customers nationwide, every week.At the end of the third quarter of 2014, Redbox’s digital-marketing channels span 36 million email subscribers, 26 million app downloads and 5.4 million SMS subscribers.

For a deeper look into the creation of Redbox and the ideals it was founded on visit: http://www.redbox.com/timeline

How to use Redbox

Features

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•They have about 35,000 locations in the United States at places average consumers already shop. This allows for convenience that would be too costly for other companies to implement on a brick and mortar basis.

•The convenient rent-and-return-anywhere policy means you can return your discs to any Redbox location in the country. This allows consumers to be as stress free as possible when it is time to return their purchase.

•Redbox allows you to create a customer account with them that gives you access to quick pickup, and to make sure you get the movie or game you want, by allowing you to reserve your rental ahead of time using your computer, tablet, or mobile device.

•They have a points-based rewards program, Redbox Play Pass, that offers exclusive deals and freebies (like a free movie night) just for signing up.

•They use multiple forms of communication to reach their customers, For example they have a Text Club that sends out weekly updates and deals to millions of subscribers.

•Redbox also has a mobile app that lets you find and reserve your rentals ahead of time. And if you enable push notifications, you’ll get updates on new releases and deals.

•Redbox uses email to offer up millions of deals and discounts every week.

•They also take advantage of Facebook, Twitter and Instagram pages to share news and deals. If you use the hashtag #HowDoYouRedbox, Redbox often sends out deals to consumers reaching out through social media.

Redbox Collaborations

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Redbox's most recent joint venture took place in 2012 with Verizon Wireless, a very dominant cell phone company that diversifies in other areas as well. In 2012, Verizon and Redbox teamed up on a service intended to rival Netflix in allowing consumers to rent physical DVDs and stream movies via the Internet. The service allowed any broadband customer, even if they are outside the Verizon FiOS network, to have access to the new service. With Redbox having 35,400 kiosks at convenience stores, in some McDonald's and grocery and drugstores nationwide and, Verizon having more than 100 million wireless customers and nine million broadband subscribers this partnership would be an immediate threat to Netflix and other companies offering movies.

Currently, Redbox does not offer a streaming service and does not control the digital rights to its movies. The Verizon partnership is expected to change that. Verizon estimates that by 2015 nearly half of the 114.7 million United States homes with televisions will have Internet-enabled sets. Those televisions already typically come with icons for Netflix, YouTube and Hulu. "The hope, said Bob Mudge, president of Verizon consumer and mass business markets, is that soon they will include a Redbox icon. Roughly 30 million people rent DVDs and video games for as little as $1 each at Redbox kiosks, compared with 24.4 million Netflix subscribers".

Unlike Netflix, which offers television and movies and is experimenting with original content, Redbox primarily focuses on recently movies on DVD and Blu-ray and video games. Having a partner like Verizon could give the company the financial backing and scale to negotiate with Hollywood studios, with which Web-streaming companies have had a tense relationship, and acquire more programming.

The partnership ended in 2014 when Redbox and Verizon officials were quoted saying, “The service is shutting down because it was not as successful as we hoped it would be”. It never took off as they expected it would, given limited content selection and poor marketing. The service officially shut down on Tuesday, Oct. 7, 2014, at 11:59 p.m. Pacific.

References

Redbox Homepage: http://www.redbox.com/

Thinking Outside the Redbox (New York Times): http://www.nytimes.com/2012/02/18/business/coinstar-ventures-beyond-its-redbox-success.html?ref=technology

Media Decoder: Verizon and Redbox join on DVD's and Streaming (New York Times): http://query.nytimes.com/gst/fullpage.html?res=9C03E5D8113AF934A35751C0A9649D8B63

Redbox Instant launches movie streaming after testing (USA Today): http://www.usatoday.com/story/tech/2013/03/14/redbox-instant-movie-streaming/1987875/

Redbox Instant streaming plan takes on Netflix (USA Today): http://www.usatoday.com/story/tech/2012/12/12/redbox-instant-netflix/1762989/

Redbox Timeline: http://www.redbox.com/timeline

Outerwall Homepage: http://outerwall.com/

Verizon, Redbox to Pull Plug on Video-Streaming Service: http://variety.com/2014/digital/news/verizon-redbox-to-pull-plug-on-video-streaming-service-1201321484/