Redbox’s Vending Machines

By The New York Times

Elaine Thompson/Associated Press

Donel Ragpala and his son Sydney chose a movie at a Redbox kiosk in Seattle.

In 2002, Redbox was just an incongruous experiment that McDonald's restaurants had tried to expand beyond burgers.
McDonald’s strategy group tried selling everything from toilet paper to fancy sandwiches, but only the idea of DVD rental succeeded.
The group running Redbox grew from operating 12 of the DVD machines to about 900 in three years. Redbox today has more than 15,400 vending machines set up to dispense discs that rent for $1 a day in supermarkets and discount stores. In 2005 and 2006, Coinstar invested $37 million in Redbox; this year, Coinstar bought out McDonald’s and other investors for up to $25 million.
Redbox is opening an average of one kiosk an hour to lure consumers, which has Reed Hastings, chief executive of Netflix, taking notice.

Because Netflix pays postage twice for every DVD it rents out, it does best when customers choose ambitious subscription plans, but are slow to watch and return movies. By comparison, Redbox’s profits depend on it renting out each disc as many times as possible before demand for the movie peters out.
To that end, Redbox tracks rentals to predict the right mix of titles and the right number of copies for each location.

I would not like to be bluckbuster at all...