Scott Anthony writes on Innoblog about a new venture launched by McDonald's that provides DVD rental via unmanned kiosks. He wonders why this is significantly better than alternatives (stores, online rental, download).
Link: More Disruption in DVD Rental? - Innoblog.
A colleague pointed out an article in The Boston Globe ("Like Coke machine for DVDs") describing a new way to rent DVDs. The service is provided by a company called Redbox, which is a subsidiary of McDonald's. The concept is simple. Go to a kiosk, swipe your credit card, and receive a DVD. You don't have to be a member and are charged a dollar a day for each day you have the DVD. You can return the DVD to any Redbox kiosk. Color me a bit skeptical about the viability of this approach.
There are a few quite insightful comments on his page, which explain why this is such a powerful model but there's one thing that no one picked up on. Three friends of mine started a company called Cinenow in Singapore that does the same thing as Redbox. They stress two major points about why their model works better than both stores and online rental:
- DVDs at kiosks are available instantly (unlike online) and 24/7 (unlike stores). This was was highlighted in the Innoblog post.
- Their pricing model, which charges customers more the longer they hang onto their DVDs, ensures that customers have an incentive to return the DVD as soon as possible. This means that most DVDs are in stock most of the time. This is the point that no one mentioned on Innoblog and I think it is quite a powerful idea.
Note that Cinenow (don't know about Redbox) doesn't impose absurdly small time limits. I think their minimum rental price is valid for 4-hour rentals, which is more than enough time to rent the DVD, rustle up some popcorn, watch the movie and return it.
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