Could Netflix’s red DVD envelopes and Redbox’s bright red DVD kiosks someday be part of the same company?
Bill Rouhana, the CEO of Redbox owner Chicken Soup for the Soul Entertainment, sure hopes so.
“I’d like to buy it,” Rouhana said of Netflix’s DVD business in an interview with The Hollywood Reporter Wednesday. “I wish Netflix would sell me that business instead of shutting it down.”
Redbox is already the biggest DVD rental company in the U.S., with a network of some 32,000 red DVD kiosks across the country. Just this week it announced plans to add another 1,500 kiosks at Dollar General stores (Rouhana says the Dollar General kiosks are some of the company’s most profitable).
Netflix on April 18 announced that after 25 years, it would mail out its last DVD in September. While the DVD business kickstarted Netflix’s meteoric rise, in recent years it has been on the decline. In 2022 it had $146 million in revenue, down $40 million from the year prior. Q1 had revenue of $32 million, suggesting a further decline this year.
And Rouhana says he has reached out to Netflix over the years expressing a desire to acquire the DVD business, to no avail.
“I have tried like three or four times to reach out to the corporate development people about it but just got rebuffed each time,” Rouhana says. “So when I saw it being closed, I thought well, maybe they’ll do it now.”
A Netflix source told THR that the company is winding down the business, and not selling it. (As far what happens to those warehouses full of DVDs that fueled Netflix’s red envelope business, those seem to be in limbo for now.)
Even if that is the case, Rouhana says he believes the decision to shutter the service will benefit his company. “This could be a great boon to us because now there’s a whole bunch of people who are going to look for a new place to get their DVDs, and we’re close to 90 percent of them based on where our kiosks are located,” he says.
And, he notes, he does not expect the DVD business to go away anytime soon.
“We believe in it, and we believe it’s going to be around for a while. Like most legacy things, it’s a lot harder to kill them than people say, I believe,” he adds.
In fact, he believes the DVD business is in a position for growth over the next few years, thanks to a larger slate of movies hitting theaters, and a desire from studios to reengage with windowing strategies.
“We programmed our business plan for us to get back to about 30 percent of the 2019 level,” Rouhana says. “I feel that’s pretty conservative, I think we’ll be better than that. But, you know, that’s how we built the business plan that we’ve articulated. So people can decide for themselves whether they think that’s overly optimistic or overly pessimistic.”
But adding Netflix’s red envelopes, and its estimated million or so customers, would be another feather in the cap.
Was I the only one who was amazed to hear the Netflix DVD business was sill going?
I thought it died out years ago.
No - I knew it still existed but scrapped it a few years ago. Honestly, being a disc supporter I probably shouldnt have dumped it but we just werent using it much.
IMO, there is still a disc rental market out there but not sure how large it is. If a new service came out that had sufficient copies of new 4K discs, Id very possibly try them out.
I've been renting DVDs from Netflix since January 2005, as well as Blu-rays starting a few years ago or so. Currently have my most recent rental sitting on my TV stand. Disappointed they will be shutting down that service. It was a nice option to have since there are still plenty of things on DVD that you can't find to stream or rent digitally. I'll have to try and get through the rest of my rental queue before September.
I think I read that Beetlejuice was the first movie they ever shipped. Hopefully they will announce what the last movie shipped is.
IMO, there is still a disc rental market out there but not sure how large it is. If a new service came out that had sufficient copies of new 4K discs, Id very possibly try them out.
2022 North America = $502 million down 16.65% from 2021
Mulling over whether I should put buy $1000 of shares of CSSE. It's dirt cheap right now, but with the planned increase in redbox kiosks, and Netflix leaving the disc business, and this poitential news, I could see it going up again.
Mulling over whether I should put buy $1000 of shares of CSSE. It's dirt cheap right now, but with the planned increase in redbox kiosks, and Netflix leaving the disc business, and this poitential news, I could see it going up again.
CSSE has been closing Redbox kiosks lately. They're also in danger of being delisted from the exchange, so you may have to deal with trading unlisted shares.
Netflix still owns their disc business and it might be smarter for them to convert instead of sell it for pennies to CSSE. CSSE possibly released this presser to pump up their stock.
Or, and hear me out on this one, we let Blockbuster make their epic comeback, and buy the DVD service from Netflix, allowing them to have brick and mortar, AND by-mail services.
CSSE has been closing Redbox kiosks lately. They're also in danger of being delisted from the exchange, so you may have to deal with trading unlisted shares.
Netflix still owns their disc business and it might be smarter for them to convert instead of sell it for pennies to CSSE. CSSE possibly released this presser to pump up their stock.
News did come out the other day that they plan to add 1,500 more kiosks at Family Dollar locations over the next 2 years, for a total of over 5,000 by the end of next year.
I think when Netflix's DVD business does close for good in September, Redbox will likely be the most viable physical rental service available. Obviously that's not a huge market compared to streaming, but still a niche that they may be the most dominant player in going forward.. The stock has dropped quite a bit over the last year, and it probably hasn't bottomed out, but I still see some potential for it to climb back in the future. I'll probably buy a couple shares.
News did come out the other day that they plan to add 1,500 more kiosks at Family Dollar locations over the next 2 years, for a total of over 5,000 by the end of next year.
I think when Netflix's DVD business does close for good in September, Redbox will likely be the most viable physical rental service available. Obviously that's not a huge market compared to streaming, but still a niche that they may be the most dominant player in going forward.. The stock has dropped quite a bit over the last year, and it probably hasn't bottomed out, but I still see some potential for it to climb back in the future. I'll probably buy a couple shares.
2012: 43,500 kiosks
2017: 40,000 kiosks
2023: 32,000 kiosks (according to your link)
I've recently received a kiosk closing email from Redbox because it was my most frequented kiosk, it was within walking distance.
Or, and hear me out on this one, we let Blockbuster make their epic comeback, and buy the DVD service from Netflix, allowing them to have brick and mortar, AND by-mail services.
They couldn't make the store/mail rental combo work 16 years ago, so what's it going to be like the second time around...?
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Redbox Owner Interested In Buying Netflix’s DVD Business
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