What is a Redbox™ Video?

Redbox™ is a company operating automated DVD-rental kiosks throughout the United States. Customers who wish to rent a Redbox™ video can simply walk up to a machine and make a selection, or they may reserve a rental ahead of time using the Redbox™ online site. The company experienced explosive growth in its first five years of operation. When it debuted in 2004, it operated only 12 machines, all in McDonald's® locations; in 2009 it operated over 10,000 machines in McDonald's®, Wal-Mart®, 7-Eleven®, and other restaurants and retail stores.

A customer checks out a Redbox™ video by using the touch screen on the front of the machine. The transaction requires a credit card for customer billing and identification. Optionally, you may supply an email address at which to receive a receipt or other communications from the company. The DVD is returned later at the same machine or at another kiosk location. For each DVD checked out, the company charges one dollar per night. Customers can also buy used DVDs from the machine.

The Redbox™ kiosks' large red boxes were designed and are manufactured by Flextronics®, a Singapore-based company. Each kiosk holds more than 500 DVDs in a rotating internal array. When a customer checks out or returns a Redbox™ video, a robotic mechanism fetches the disc or returns it to the array. The machines are Internet-linked to ensure that the web site has real-time data about each kiosk's inventory.

Three movie studios — 20th Century Fox®, Universal® and Warner Brothers® — have refused to allow Redbox™ to offer rentals of their movies until a month after the DVDs have become available in stores. The studios are reportedly concerned that the low cost of Redbox™ video rentals could eat into DVD sales. Redbox™ has filed lawsuits against the three studios, accusing them of anti-competitive practices. On the other hand, Sony and Paramount have signed deals with Redbox™ to distribute discs directly to the company.

Redbox™ was founded by Mitch Lowe, who was previously involved with video rental services Netflix® and Video Droid. Initially a joint holding of Coinstar® and McDonald's®, Redbox™ is now a wholly-owned subsidiary of Coinstar®, the company best-known for its coin-sorting machines located in grocery stores. The Redbox™ corporate headquarters are located in Oakbrook Terrace, Illinois, a suburb of Chicago.

Like all companies that deal in physical media, Redbox™ has had to field questions about the viability of its business model in a future where electronic media downloads are expected to dominate. Lowe has hinted that Redbox™ may eventually offer digital downloads in addition to physical media. The company has also experimented with Blu-ray™ and video game rentals.