Redbox just IPO’d, and it’s out to prove there’s more than meets the kiosk

Redbox, operator of everyone’s favorite DVD kiosks, IPO’d this week, and wants to prove that it can grow beyond DVD rentals.

We’ve all been there — marching out of a 7-Eleven, slurpee in hand, when you see it glowing in the distance: the Redbox kiosk, like a lighthouse in the storm of your Friday night.

The company, a relic of our pre-streaming past, hit the public markets this week in a SPAC deal that raised ~$88m, per Variety.

The move marks a new era for the kiosk king of DVD rentals

Which is timely — according to Nielsen, DVD and Blu-ray player ownership dropped from 90% in 2008 to 67% in 2018 (and only 57% among people ages 18 to 34 — a coveted demographic for advertisers).

While Redbox still operates ~40k kiosks, it’s broadened its offering to better fit modern consumption habits. New developments include:

  • Redbox Entertainment: Its production arm that acquires and releases a variety of genre movies at modest budgets
  • Redbox Free Live TV: An ad-supported channel that launched in February 2020 and has reached 1m monthly active viewers
  • Redbox On Demand: A streaming service that offers free viewing and the ability to rent or buy a list of titles

Together, the new offerings help Redbox work toward its goal of becoming a one-stop shop for entertainment.

But Redbox isn’t dumping its DVD collection quite yet

In December 2020, the firm launched Redbox+, an annual subscription that lets customers rent 12 to 24 DVDs at a time.

CEO Galen Smith says its hybrid approach makes Redbox unique compared to digital-only companies that never actually turn a profit.

Plus, given Gen Z’s budding interest in early 2000s nostalgia, Redbox may have a hidden goldmine waiting in the wings.

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