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Blockbuster loses a customer

Out west (in Utah, at least) a little upstart rental company called redbox is giving Blockbuster a run for its money. The concept is simple: set up DVD “rental stations” similar to vending machines outside of popular locations like McDonald’s restaurants and Smith’s grocery stores. Charge folks 99 cents per rental per night, with the rental automatically converted to a sale after 25 days. Stock the machines with tons of new releases (since those tend to fly off the shelves most quickly), toss out a free rental code or two every so often, and voila! Instant phenomenon.

I remember when redbox began its test market trial run in the Salt Lake/Utah County area a few years back. It didn’t take long for word-of-mouth to spread about this neat little vending machine outside the Mickey-D’s that let you watch movies for a buck a night. Soon the lines to get at this machine stretched far into the parking lot, and it was regularly out-of-stock of the most popular releases. What to do about that? Why, add another kiosk, of course! And so the “redbox craze” spread like wildfire up and down the Wasatch Front, such that when we left Provo back in August you could find one (or multiple) redbox kiosks at nearly every McDonald’s restaurant and Smith’s store around. And both of those businesses are pretty popular all by themselves.

More after the break . . .