It's framed as a competition, but they serve completely different demographics
the supposed competition between the Redbox machine network and Netflix. And it's true that Redbox posted strong numbers last year, while Netflix's numbers dropped.
I live in a rural area, where the Redbox is apparently a lifeline for many families. On a Friday early evening, you will see a line out in front of the Redbox which is stationed on the sidewalk in front of the Walgreens. Meanwhile, the Blockbuster store down the street is a ghost town, and the video rental section of Safeway is abandoned and dusty.
But observing the difference between Redbox and Netflix users, it becomes clear that these two services are worlds apart.
Redbox machines require no commitment, no forethought, very little money, and little in the way of decision making. They offer only about 20 movies, but that's a plus for many people. Redbox is geared towards harried families. Mom goes inside and picks up some last-minute items for the weekend, while dad stays outside and chooses the movie.
The fact that Redbox only offers the 20 most recent movies is your tip-off: this is a movie service for people who don't really care about movies. They just want to watch "a" movie. Whatever is out this week. Whatever is popular. Redbox users are looking for 90 minutes of entertainment for about a dollar, and that is exactly what Redbox machines provide them.
Meanwhile, Netflix requires a commitment, forethought, more money per month (for more movies) and nothing but decision making. Netflix is for people who want to spend hours grooming their queue, choosing what they want to watch this week, researching what they might want to watch next week. Netflix is for people who are passionate about movies and television shows.
To put it another way, Redbox users watch "Two And A Half Men" and "King of Queens." Netflix users watch "Community" and "Firefly" and "Arrested Development." And never the twain shall meet.
Netflix users wouldn't stoop to using a Redbox machine unless their lives literally depended on it. And if you gave your average Redbox user a free year's subscription to Netflix, they probably wouldn't even bother to finish the sign-up process, much less order a movie.
Luckily, there is room in the world for both services to coexist side-by-side. If Redbox has cut into anything, it's the movie rental services at grocery and convenience stores. But given the lackluster support for these services, I'm pretty sure the stores are secretly glad they can soon close those departments forever.