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Old 07-25-16, 01:08 PM   #1
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Red Box sold to private equity group -- The end is near?

http://deadline.com/2016/07/redbox-o...al-1201792112/

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Apollo Global Management could become the nation’s leading operator of DVD rental kiosks as the result of a $1.6 billion (including debt) agreement announced this morning to buy Outerwall, which owns the struggling Redbox business.

The private equity firm has agreed to pay $52 for each Outerwall share, a 6.6% premium over its closing price on Friday — but 51% more than the trading price on March 14 when Outerwall said that it was considering a sale. The companies expect the deal to close by the end of September.

Outerwall has lost about 42.5% of its market value over the last 12 months as DVD rentals decelerated while consumers flocked to streaming video services. The share price opened up more than 11% today to $52.15, suggesting that some shareholders believe they’ll see more than Apollo’s offer.

The private equity firm has agreed to pay $52 for each Outerwall share, a 6.6% premium over its closing price on Friday — but 51% more than the trading price on March 14 when Outerwall said that it was considering a sale. The companies expect the deal to close by the end of September.

Outerwall has lost about 42.5% of its market value over the last 12 months as DVD rentals decelerated while consumers flocked to streaming video services. The share price opened up more than 11% today to $52.15, suggesting that some shareholders believe they’ll see more than Apollo’s offer.

Looks like the end is near for Red Box. Sad with them potentially ending in the near future, it could officially be the end of DVD and Blu-Ray disc rentals. Everyone will have to get their rentals via streaming/digital rentals.

Netflix's DVD/BD mail rental service has already become irrelevant. And there are very few B&M video stores left in the U.S.

Not surprised that Red Box is struggling. Just an assumption, but it didn't seem like people actually paid for many rentals for all the free codes they were sending out.

Last edited by DJariya; 07-25-16 at 01:14 PM.
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Old 07-25-16, 03:42 PM   #2
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Re: Red Box sold to private equity group -- The end is near?

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...Everyone will have to get their rentals via streaming/digital rentals.
Which has been the ultimate goal of the studios all along. Better control coupled with higher rental fees.
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Old 07-25-16, 03:51 PM   #3
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Re: Red Box sold to private equity group -- The end is near?

Not surprised. I scaled back my rentals a lot - I don't even think I've rented anything from Redbox this year. Digital HD and streaming options are where it's at.
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Old 07-25-16, 04:05 PM   #4
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Re: Red Box sold to private equity group -- The end is near?

Color me not surprised also. Digital & streaming rentals are so much more convenient. Not to mention Redbox as still about 85% standard def DVD & only the top 5 or so movies are even available on Blu. What wants to watch 480p video in 2016?
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Old 07-26-16, 09:17 AM   #5
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Re: Red Box sold to private equity group -- The end is near?

I still can't believe Redbox ever got as big as it did. Apparently people love standing in a line outside of a store in the middle of winter rather than inside a video store, all because it was a buck for a one day rental.
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Old 07-26-16, 11:04 AM   #6
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Re: Red Box sold to private equity group -- The end is near?

Redbox is pretty much the last dying gasp of the physical rental market. It doesn't surprise me that it took off, the price was right for the new movies that Netflix/Amazon wasn't providing. Sucks to see it go, but I admit that's partly my fault as I don't rent very much anymore at all.
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Old 07-26-16, 11:14 AM   #7
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Re: Red Box sold to private equity group -- The end is near?

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I still can't believe Redbox ever got as big as it did. Apparently people love standing in a line outside of a store in the middle of winter rather than inside a video store, all because it was a buck for a one day rental.
They'd also waste less time if they reserved it online instead of standing in line browsing through titles like a moron.
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Old 07-26-16, 11:47 AM   #8
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Re: Red Box sold to private equity group -- The end is near?

The stand-in-line thing with Redbox is pretty dumb, but who's paying $4-6 for streaming rentals? I can hardly ever bring myself to pay that much for a rental when I can buy new discs for the same price, and I don't care so much about seeing things right away anymore. I did rent a lot from Redbox when they had a free code every week- I'd use multiple credit cards and rent 4 at a time, but I've only paid for maybe 2 rentals at the most. (I used to rent a lot from Vudu when they had the daily 99 cent rentals too, but not so much after they stopped that.) In one of the VHS collector documentaries (either Rewind This or Adjust Your Tracking) someone called Redbox "the gloryhole of video stores."
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Old 07-26-16, 12:29 PM   #9
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Re: Red Box sold to private equity group -- The end is near?

I'd miss them, as I imagine I've rented at least 1000 discs over the years. Of course, 950 of them were free, so perhaps I'm part of the problem.
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Old 07-26-16, 12:44 PM   #10
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Re: Red Box sold to private equity group -- The end is near?

I imagine most casual movie viewers don't bother to rent but just wait till they can watch it "free" on Netflix.
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Old 07-26-16, 01:36 PM   #11
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Re: Red Box sold to private equity group -- The end is near?

Streaming video killed this market. Most people are willing to pay a few dollars extra to avoid having to visit the grocery store solely for their movie rental.

The bigger fall-out will be on the used disc market. Sources of cheap, widely available used Blu-rays are disappearing by the day.

Hollywood is laughing to the bank.
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Old 07-26-16, 04:25 PM   #12
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Re: Red Box sold to private equity group -- The end is near?

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Originally Posted by Alan Smithee View Post
The stand-in-line thing with Redbox is pretty dumb, but who's paying $4-6 for streaming rentals? I can hardly ever bring myself to pay that much for a rental when I can buy new discs for the same price, and I don't care so much about seeing things right away anymore. I did rent a lot from Redbox when they had a free code every week- I'd use multiple credit cards and rent 4 at a time, but I've only paid for maybe 2 rentals at the most. (I used to rent a lot from Vudu when they had the daily 99 cent rentals too, but not so much after they stopped that.) In one of the VHS collector documentaries (either Rewind This or Adjust Your Tracking) someone called Redbox "the gloryhole of video stores."

I'll gladly pay $4-$6 for a streaming film if it means not having to go anywhere. Time is money to a guy like me.
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Old 07-26-16, 05:35 PM   #13
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Re: Red Box sold to private equity group -- The end is near?

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I'll gladly pay $4-$6 for a streaming film if it means not having to go anywhere. Time is money to a guy like me.
Not me. As an old retired guy it is no burden to stop on the way out of the grocery to rent a movie and save $5 over streaming the same feature.

Also, I am currently pushing my streaming limit on my ISP and have been there for a week. Bottom line, even streaming only "included with prime shows" I easily exceed my "limit". I'll miss Redbox.
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Old 07-26-16, 05:49 PM   #14
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Re: Red Box sold to private equity group -- The end is near?

I would much rather get discs in the mail from Netflix or at Redbox and save money. $4-$6 for a streaming rental is too high for me. I was going to go rent Sing Street from Redbox in case they start closing soon, but it turns out that they aren't making it available to rent. I'll have to get it from Netflix....
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Old 07-26-16, 09:00 PM   #15
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Re: Red Box sold to private equity group -- The end is near?

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I still can't believe Redbox ever got as big as it did.
Yeah, I'm baffled by their popularity, too.

The selection is absolute shit; some new release movies mixed in with a bunch of junk. And even then, the few times I've wanted to rent something it's been out.
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Old 07-27-16, 03:01 AM   #16
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Re: Red Box sold to private equity group -- The end is near?

While I hate to see another physical media outlet come to a demise, I realize I rent very little... Not even streaming rentals... Between great sales at Hastings (Rip), the local Library, Netflix, and TV network streaming (via Roku) there's little time to pay for a rental..

Plus as others state, what we'd want was always out... And what was there that we'd watch we'd already seen..
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Old 07-27-16, 11:57 AM   #17
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Re: Red Box sold to private equity group -- The end is near?

I rarely had problems with movies being "out", far fewer than the days of regular video stores. On many Tuesdays I was often the first to rent new titles. $5 or so for a streaming rental is too close to the price of a theater ticket, I might as well see something that way if I'm going to spend "real money" on it- or wait for the Blu-Ray to drop to that price and buy it. I doubt Redbox will go away completely, they've already taken out many of their "underperforming" locations. They still seem to be doing OK at stores I've gone to that have them, being that they're the ONLY way to rent discs at a physical location in most areas now.
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Old 07-29-16, 09:02 AM   #18
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Re: Red Box sold to private equity group -- The end is near?

Never used Red Box. Wasn't thrilled with having to bring it back the next day.

I own tons of movies plus I use Netflix. If I feel the need to rent something, two different library systems have lots of DVDs/Blu-rays to checkout. You'll have from 7 to 30 days to return plus they're free.
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Old 07-31-16, 11:23 PM   #19
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Re: Red Box sold to private equity group -- The end is near?

I used it mostly for game rentals that could be blasted through in a day or two; the few new releases they got on release date on Blu-Ray were largely crap I'd never watch. I get all my stuff locally for rent at Movie Madness (they have a library of almost 100k titles).
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Old 08-01-16, 10:34 AM   #20
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Re: Red Box sold to private equity group -- The end is near?

Never used Redbox. I still use Netflix's disc service sporadically. Almost always for new releases. I would not spend more than $1 for a digital rental. Anything more is really ludicrous, IMO. If it was in theatre/VOD same day I do spend more though.
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Old 08-01-16, 11:24 AM   #21
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Re: Red Box sold to private equity group -- The end is near?

Red Box disappeared from the Canadian market almost two years ago. Netflix and demand services were probably the reason.

It's odd in a struggling economy that people still get sucked-in by the convenience of a $4-$6 stream. When "Whatever, it's only five bucks" is said six times a month, that turns into $360 a year. That's a lot of $1.50 Redbox rentals.
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Old 08-01-16, 11:42 AM   #22
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Re: Red Box sold to private equity group -- The end is near?

I just saw on the way into the store last night Red Box Blu-ray rentals are $2 now - maybe they have been for a while? That plus two round trips to the box to pickup and drop off the movie. That's gotta be $2-$4 right there in gas, no? Now you might say some people are going to the store anyway, but I've watched many people pull up, throw the hazards on, do their Red Box business and leave. So they are spending gas money on top of the rental.

Suddenly a digital rental isn't too far off in price difference, it's more convenient and has more selections.

Now personally, I might rent something digitally once every few months. I'm still one of those weirdos who blind buys discs. But if my only choices to see a new movie at home were digital rental or Red Box, it would be digital every time for me.
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Old 08-01-16, 11:52 AM   #23
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Re: Red Box sold to private equity group -- The end is near?

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I just saw on the way into the store last night Red Box Blu-ray rentals are $2 now - maybe they have been for a while? That plus two round trips to the box to pickup and drop off the movie. That's gotta be $2-$4 right there in gas, no? Now you might say some people are going to the store anyway, but I've watched many people pull up, throw the hazards on, do their Red Box business and leave. So they are spending gas money on top of the rental.

Suddenly a digital rental isn't too far off in price difference, it's more convenient and has more selections.

Now personally, I might rent something digitally once every few months. I'm still one of those weirdos who blind buys discs. But if my only choices to see a new movie at home were digital rental or Red Box, it would be digital every time for me.
$2-4 in gas? I don't think people are driving 60 miles just to rent a movie.

In my ~1000 rentals I doubt any were trips just to Redbox, but even if they were, I have about 10 kiosks within 6 miles.

And those hazard light customers were probably people stopping on their way to or from somewhere else.
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Old 08-01-16, 12:38 PM   #24
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Re: Red Box sold to private equity group -- The end is near?

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$2-4 in gas? I don't think people are driving 60 miles just to rent a movie.

In my ~1000 rentals I doubt any were trips just to Redbox, but even if they were, I have about 10 kiosks within 6 miles.
Not everyone has a fuel efficient car or access to cheap gas. Standard gas is still over $2 a gallon where I live. It's reasonable to assume the two round trips could cost at least a gallon of gas. Maybe 2 gallons is excessive but not outside the realm of possibility.

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And those hazard light customers were probably people stopping on their way to or from somewhere else.
The store I would frequent would routinely have 2-3 cars line up with hazards right by the Red Box and people would get in or out of cars after coming or going to the Red Box. And that's not counting the people who would park in normal spots to use it.

I used to grocery shop a lot on Friday and Saturday nights so I think I got to see this more than the average person might. You can doubt it if you like, but this was in a large and densely populated suburb of Chicago. No reason to assume other stores with Red Box didn't have the same activity.
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Old 08-01-16, 12:59 PM   #25
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Re: Red Box sold to private equity group -- The end is near?

That was the nice thing about Redbox was the scale of the operation. I had probably 5 or six convenient locations on my way to/from work so it wasn't a big deal to stop in at the local 7-11 and drop a movie off.

I understand if you take a bus you don't drop off a movie and wait another twenty minutes for the next bus.

Lots of people complained about the selection but I think they offered all the new releases including many relatively obscure titles. It wasn't a place you would want to go for catalogue titles but, then again, you can buy many catalogue titles for $1-$2 at a local pawn shop.
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