Outerwall and Verizon has announced that on October 7th the Netflix rival, Redbox Instant, will be closing down at 11:59 p.m. (Pacific). The business will offer customer refunds and almost no time for consumers to finish streaming movies. This summer has been rough for the company and hit an all-time low in June 2013, as the Box Office was down 83 percent. Only four releases in that month.
There isn’t an exact reason Redbox Instant is shutting down. But with their horrible payment methods and credit card fraud history, let alone their poor title selection. For the past few months, the company would not allow new consumers to join the $6.00 a month service, and those whose credit cards expired were cut off from the program without warning. They didn’t have a chance to renew their credit card information before being dropped.
The company has been struggling with competition (Netflix, Hulu) since its release in 2013. Even though their prices are lesser than Netflix the real issue is obtaining newer, more entertaining movie selection. Many of the movies available are barely 3 star quality films. Every once in a while a decent title appears, but you would have to wait months to even access it.
Though this is upsetting to currently happy Redbox Instant customers who planned on streaming for longer, the company is devastated to have a business shut down. After weighing the odds, they have decided that the only way to thrive in this business is to shut down streaming. The real question is: will this affect the Redbox DVD kiosks? This will not affect the Redbox DVD kiosks as of yet, however, the times may affect them, with DVDs being a thing of the past. Eventually Redbox may eventually be closing up shop by 2016, unless they can find a new innovative way to lure in more customers.
Sources: MarketWatch, Dumb-Out
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