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Streaming is the long term answer.

Kiosks only make sense as long as the physical discs still exist. (short term)


I thought Netflix was looking on Redbox as a real problem, but not the future.

Won't streaming take hold in 5 years or so and Redbox start to die down? I like the dollar rentals, but only use Redbox to supplement Netflix once every few months because of convenience and their lack of selection.


Difference is that Redbox is going backwards. Investing in DVDs, physical kiosk, etc...like the poster above stated, in 5 years streaming will become mainstream.

Just b/c you have competition doesn't mean you should buy them.

Big difference between BB buying Netflix to Netflix buying Redbox.

Netflix has been smart in not diluting their core business. (i.e. getting into the gaming biz, setting up kiosk, etc...)

Eventually what Netflix will do is begin producing their own original programming.

They experimented a little with distribution with Red Envelope. As the studios try to restrict their own exclusive content Netflix will need a draw to their services.


Streaming is definitely the future. Zeros and ones will replace all of our media if they haven't already. Cable and Satellite companies will eventually have to switch their focus to primarily providing high speed internet. Who needs cable when you can stream your favorite show at any time? Once the computer and television interface evolves to satisfy the masses it will be a tipping point.


I can understand taking the long view on streaming becoming the predominant distribution method in 5 years, but from the perspective of a customer looking to diversify the choice/availability spectrum (Redbox just new releases all available now vs Netflix discs of all media avail in a few days) I'd like them to buy it. Maybe similar to Blockbuster's in-store returns for online rentals, Netflix can do kiosk exchanges for mailed discs. 4 exchanges per month? Swap out that foreign film that's been sitting on your DVD player for weeks for a new release at a kiosk.

I don't think the prevalence of streaming is as much a certainty ans everyone seems to think. Things can change for the worse in the next few years with ISPs due to outright legislation against net neutrality, condoned business practices like throttling, or unreasonable pricing for large pipe connections to make widespread adoption of high def streaming perpetually out of reach. Buying Redbox would be a cheap hedge against an uncertain future.


I think 5 years is a bit optimistic, but streaming is definitely the future. I love my streaming and hardly watch physical DVD disks anymore, but I'm definitely a technophile. I just don't see most people on streaming until about 10 years.

However, Netflix has noted that Redbox is their biggest competitor and their outlook shows tremendous growth. Even if Netflix wasn't to buy Redbox, it might consider a sort of partnership. Maybe a way to exchange your Netflix DVDs with a Redbox DVD (like Blockbuster's in store exchange). I could see that as a beneficial partnership for both parties as it will suddenly increase Redbox's library and give some added convenience to Netflix users.

It's too hard to ignore Redbox and being able to position yourself well for the next 10 years will be imperative. Although the future of movies will be exclusively streaming, that still is a mid to long term thing and it doesn't make any business sense to ignore Redbox.

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Five years? No way. Look around: Lots of VHS still in use.

And, everyone will always have an internet connection? Everyone will be able to work through DRM? Etc. Regardless of what they are dispensing, I think Coinstar is a decent play. Hell, you've still got the coin business.

If I was NF, I'd buy it and do nothing to the end-user model (well, except fix the UI dumbnesses). Let it make money, and don't rebrand or anything. Run it as a separate business unless something changes in the world, then you have that to take advantage of it also.


Davis only has a hunch, but not the data.

Coinstar's management believes Redbox is worth somewhere in the $750 million ballpark. That's a lot of DVDs. And I don't know that they have any interest in selling.

And if you want to buy Coinstar, that's a real problem because, like Netflix, it's trading at a premium valuation.

Reed Hastings is not buying an overvalued kiosk company. It ain't happening. If he was going to do it, he'd roll out his own kiosks. That ain't happening either.

It would take an unusual set of circumstances to bring the companies together.


they should have bought redbox 3 years ago.


I just can't wrap my head around who even uses these kiosk rental things. Sure, it sounds like a convenient thing, until I realize that renting a disc means I need to return to that location tomorrow (or as quickly as possible). I don't know about you, but I really only see RedBoxes at my grocery store, and I go there once a week, max.

I don't rent DVD's from my local library because I'd have to drive back and return it 2 days later. The last thing I want to do is have to go to the kiosk so frequently. With a 2-day turnaround, Netflix is so much more convenient.

Now, if Netflix had such kiosks, and I could return a DVD in exchange for an instant new rental, I might like that. But like I said, I only pass by the kiosk once a week, so even then it would have limited utility.

Chance the Gardener

In five years, you will go to Walgreens, park your car in front of the redbox, turn your radio dial to 87.7, and watch your movie stream on the redbox screen.

Some overestimate how hard it is to use a redbox. There are two redboxes on my 6-mile drive to work. Convenient and cheap.


Redbox no longer has the studio support it needs to continue growing. Purchasing the company would not be a wise move at this juncture. Unless Coinstar can get Hollywood back on the bandwagon, their days are numbered. I expect Redbox to declind rapidly in 2010.


It's a mistake to call out or focus on Redbox's rate of growth since that's starting from a comparitively small number. Just a ONE percent increase in Netflix membership would dwarf anything Redbox is likely to achieve.

I have to agree with others who've stated Netflix should focus on what they do best, which in all likelyhood has a brighter future anyway.

Of course, they COULD buy Redbox, close it down, then take all those discs and end wait times for their current members.


Like all businesses Netflix needs to keep their options open.

We have no idea how much ISP's will be charging for bandwidth. How much are we willing to pay our ISP per movie streamed?

ISP's could also simply block, blacklist, or throttle whoever they want. Netflix would be forced to 'pay to play' with every ISP.


Owning kiosks would be a great thing if Blockbuster stores have a large number of closures, or a bankruptcy.


Most people have forgotten that the service that was intended to run on what Al Gore called "the data superhighway" was VOD (Video on Demand) not WWW (World Wide Web). Back in the nineties Oracle and the Baby Bells were poised to deliver movies to your house over an IP connection. Sun Micro created a language to run in the VOD set top box. It was called Java.

Everyone knew what VOD looked like. There was an interface on your remote control that gave you instant access to any movie ever made. Find the movie, press start.

Everyone wanted to provide that service in 1994. Few thought that most homes would have much use for computer-to-computer connections. The Web was a makeshift service deployed on the infrastructure designed for VOD.

Now fifteen years later and we can almost do it, except: the Internet connection to the home is too slow, the storage of all those movies is too expensive, and movies need to be processed for streaming.

VOD virtually requires FTTH (Fiber to the Home). Verizon provides some FTTH in parts of the country now. Most homes in the US will have FTTH in maybe three years (2012).

The current NetFlix VOD (Watch Instantly) has too few movies, low data rates that compromise video and audio quality, and a kludgy user interface.

The goal of having every movie ever made online will be approached slowly. Currently WI has about one eighth of the movies available that NF has by DVD-mail. WI should grow to a full hundred thousand titles in about five to seven years. Eventually moderately rare titles like "This Island Earth" will be processed and indexed for streaming. One problem is that the DVD transfers made a decade ago often stink. They will have to be redone. Conversion will be an asymtotic process - rare movies last.

FTTH will finally allow 1080p video to stream as well as five or seven channel audio. Web connections, subtitles, foreign languages and other such services will also have the needed bandwidth.

Finally someone needs to devise a good remote control that can accept alphanumerics. All modern computers today use some variation of the OOTF (Office of the Future) technology invented at PARC (Palo Alto Research Center) more than three decades ago. The mouse, keyboard and GUI were created for a physical desktop. We need something else now. This will take from one month to perhaps ten years.


For those of you banking on streaming as the future, keep in mind that a large percentage of US households do not have broadband. Many don't even have access to it locally if they can afford it. Many can't afford it. Many can't even afford a computer.

However, DVD players are available at Walmart for less than $30. For low-income folks, $1 a night DVD rentals at a Redbox by their local grocery store may be a primary source of entertainment.

On a similar note, the ISPs in the US are fighting tooth-and-nail to keep our broadband speeds as slow as possible (to avoid the costs of upgrading infrastructure,) while keeping the prices as high as possible to maximize profits.

Now, I'm not suggesting that Netflix has any obligation to service each and every person in the US, online or not. I'm just pointing out that there are a lot of folks out there that are currently completely out of Netflix's reach. Buying Redbox would allow them to connect with these other folks.


I'm with most everyone's analysis here, but I assure you there never fails to be people actively select/returning RedBox movies since I started seeing them turn up at Walmarts here. Dare I say it, there are still a lot of non-broadband infrastructure yet to be upgraded in rural America. Oh but what does rural America almost always have? Not always a Blockbuster, but they more often do have a WalMart. Now they have Wal-Marts with RedBox, until the broadband infrastructure gets there. there's RedBox.


Netflix has done very well following their vision. I would be worried for their customers (especially me!) if they lost that focus. Companies that lose their vision lose what makes them great. Nevertheless, I am a BIG fan of Netflix and will be with them for a long time.


Consumer adoption rates are too slow to talk about streaming totally replacing physical media, not anytime soon.

Not to mention how much slower the communication companies are at updating the lines and connections to make it a solid delivery system. And then we're back at waiting for customers to adopt everything fast enough. Notice how Blu-Ray still hasn't done away with DVD?

Netflix could take those kiosks and make them an optional drop off return for us, and get an available movie from said kiosk. of course then they would have to maintain these kiosks more.

whatever happens, it sure ain't happening overnight. and while the system currently set up for streaming is great, I look forward to better consistant quality.

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Netflix and Redbox is the futire of DVD borring right now. Both will become even more sucessfull, I think Netflix should defently Consider the buy out its an obvious step in my mind.


On a similar note, the ISPs in the US are fighting tooth-and-nail to keep our broadband speeds as slow as possible (to avoid the costs of upgrading infrastructure,) while keeping the prices as high as possible to maximize profits.

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I think that if it is their decision costumers should support them, If they want to buy Redbox is a good idea, because online marketing is growing so this investment will be great.


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streaming!!! noles than that!!
Streaming is the future, the technology that changes everyting.

Why would I want a fisical disck when I can get What I need without having to leave home or wait for being in stock

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Netflix has been smart in not diluting their core business. (i.e. getting into the gaming biz, setting up kiosk, etc...)

Eventually what Netflix will do is begin producing their own original programming.

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